MSPs Need to Build Value
Managed Service Providers (MSP) are survivors of the reseller purge seen in the early 2000s, or their founders are trying to be careful to avoid the mistakes made in that era. These organizations prevent the sale of one-time solutions and instead focus on monthly recurring revenue. The problem is that many MSPs still follow the familiar reseller model of reselling services instead of “owning” the services they are selling. They are, in essence, agents for a larger services provider who owns the infrastructure.
While MSPs who act as agents have successfully transitioned to a monthly recurring revenue model, there is limited value in their organization. Instead, MSPs need to look at bringing some of these services in house and owning the infrastructure that supports them.