As the Director of Sales for a Master Managed Service Provider (MSP), I talk to IT solution providers as prospects on a daily basis who are thinking about outsourcing their NOC and Help Desk for their managed services business. There are several reasons why outsourcing this element of the business sounds appealing to an MSP. Finding and retaining quality IT people is hard, building your own internal NOC and Help Desk is expensive, managing head count with growth is extremely difficult to balance, and many MSP business owners want their best talent focusing on higher revenue generating activities like project work, not on tasks like resetting a password. In addition, when an MSP outsources their NOC and Help Desk, they transfer a lot of those internal headaches and challenges to someone else who specializes in managed services, so they do not have to worry about them.
Outsourcing your NOC and Help Desk to a Master MSP is becoming a lot more common for MSPs as both customer demand and competition have increased, but that doesn’t mean outsourcing is right for every managed services business. Summarizing the numerous discussions I have with prospects every day, this week I wanted to share a few reasons why MSPs may NOT want to outsource their NOC and Help Desk to a Master MSP.
To all you control freaks out there, I am talking to you. This is a very common objection we get at Collabrance from MSP prospects. If you want to have a successful partnership with a Master MSP, one of the first things you need to get comfortable with is giving up control (or at least some of it), and trusting the company you partner with to manage customer environments on your behalf. The likelihood of your internal processes matching the internal processes of any Master MSP is almost impossible. In addition, what’s easier and better for your customer? Is it better to train a Master MSP on all of your processes they are not familiar with, or is it better to trust the processes a Master MSP has developed and used with dozens of other MSPs?
A Master MSP’s processes could work as good, if not better, than the processes you have created.
This all ties back to the importance of standardization. If a Master MSP had to adjust their managed services process to fit the needs of every company they partner with, it would result in hundreds of different processes for hundreds of different partners. How would the customer experience be impacted if every time a tech took a phone call they had to follow a different process? This is why good MSPs have a standardization process they follow. They know the more they can control what is in the environment, the better they will be able to serve their managed services customer.
Collabrance is able to resolve around 95% of tickets remotely with an average high customer satisfaction rate of 97%, and a big reason for this is because of standardization and our team having a similar process to follow for each customer. As a business grows it becomes apparent the owner cannot do it all. That is why they delegate and hire accountants to manage the books, lawyers to handle legal affairs, administrative staff to run the office, etc. Business owners need to think the same way when it comes to outsourcing their NOC and Help Desk. If you are not willing to give up control to a Master MSP and trust them to manage this piece of the business for you, then outsourcing may not be a good option for your managed services business.
To clarify, despite Collabrance suggesting that the support experience will be best when Collabrance has control over the monitoring of the network, we are still a white -labeled NOC and Help Desk, and most end users do not know we exist. Our partners still maintain ownership and control of the customer relationship.
This is a big one for many Master MSP’s. How do you feel about your technology stack? Are you adamant it is better than anyone else’s and you won’t change for anything, or are you in the mindset that most technologies are similar, they leapfrog each other on a regular basis, and as long as the technology works, it doesn’t matter what name is on the box? Most of our prospects agree there are hundreds of technologies out there an MSP can use, and it is impossible to have experts and SMEs in every piece of technology. That is why many MSP business owners have a standardized technology stack. Like many other MSP’s, our Master MSP realized several years ago we could not deliver the high-level of service we were committed to providing if we did not standardize our technology, so we standardized. We know the more customers we can get on the Collabrance technology stack, the better we can support them, and the more efficient we will be (thus maintaining a 95% remote resolution rate). However, what we find with most of our MSP prospects is that their technology stack usually does not match ours in all areas.
If an MSP prospect is not willing to adjust their technology stack for clients they want to transition to a Master MSP, a mutually beneficial relationship is more difficult to realize. We know we provide the best experience when customers adhere to our technology stack, and we ask all of our new partners to move to our technology stack for every customer they move to our platform. Can we be flexible with this? Yes we can. We understand there are situations where a customer may have just purchased a new firewall, or upgraded to a new workstation, so we can make exceptions. However, it is worth mentioning that every time we make an exception, it could impact the level of support we are able to deliver to the customer. In addition, one question I always ask my prospective customers is if Collabrance remediates 95% of the customers’ IT issues that come in through the door without ever engaging your team, and your company can enjoy similar or increased profits by using us, does it matter what type of technology stack we use? If the answer is “no,” then a Master MSP can be a great fit. If the answer is “yes,” then a Master MSP may not be a good fit. Note: Some Master MSP’s are more lenient than others when it comes to deciding what types of technologies they will support. However, no standards means no consistency, longer ticket times, more tickets being escalated back to the MSP to work on, etc, and all of this can negatively impact customer satisfaction. Think about it this way, if no standards means you get 30-40% of the tickets escalated back to your company to work on versus 5-10%, what value are you really getting from the Master MSP?
This type of offer is going to be different depending on what type of Master MSP you talk to. Some Master MSP’s prefer to have more “a-la-carte” type options for their customers (like overflow call support, after hours support, 24/7 support, a hired head on retainer, etc.). In addition, some have offers such as NOC services only, backup only, help desk services only, etc.
Collabrance believes we provide the best experience to our partners and their customers when we provide an “all-in” service that includes everything an “IT guy” would do for a company. This type of all-in support includes user support, server support, backup, security/UTM, email, and vendor management.
Can Collabrance support environments that are not “all-in”? Yes, we can and we do. However, we have learned when we do not have “all-in” support, the customer experience is not as good, and there is more risk in that relationship. For example, if we are managing the network environment as we are supposed to but we are not supporting backups and something happens with their backup that is out of our control, we cannot fix it. Similarly if we are only offering help desk support but we are unable to monitor the network, we can’t always tell what could be going on in that environment. When that happens and we cannot fix the issue, the customer is not happy. In addition, what we learn in many situations is even if it was the customer who declined an element of the MSP ‘s technology support offering and something happens related to that type of support that was out of the MSP’s control, the customer will still put the blame on the MSP as their trusted technology advisor. This can put the MSP in a lose-lose situation.
All that said, while we can offer “a-la-carte” options in certain situations, we prefer our partners to always focus on selling the “all-in” model first. If your company is only looking for supplemental or a-la-carte support, Collabrance as your Master MSP probably would not be the best fit for your company.
Similar to the discussion above around the technology stack, we also field a lot of calls from prospects asking about what types of RMM and PSA tools we use and support. Let’s talk about the PSA tool first. Many prospects who come to Collabrance already use a PSA tool, and will continue to use their own PSA tool even after partnering, and that’s okay. Your business has choices when it comes to the PSA tool.
Collabrance uses ConnectWise as our PSA tool that includes a customized ticketing integration. Many Master MSP’s will offer access into their PSA tool so the partner can view all customer information. If a prospect can make this work, they can save the costs of investing in their own PSA tool. If they are using the same PSA tool as the Master MSP (let’s use ConnectWise for example) there are integrations available that can allow multiple ConnectWise systems talk to each other, making the transferring of ticket information back and forth between companies more seamless. Finally, if the PSA tools do not match, there are still ways to communicate tickets between companies. This may sometimes be a more manual process, but nonetheless it can be a workable solution. Make sure when you talk to a Master MSP you understand how their process works with their PSA and what is available to you.
Next let’s talk about the RMM tool for MSPs, which can be more challenging. Most Master MSPs already have an RMM tool they use, and most will require you to have their RMM tool installed in the customer environment in order to partner. This makes sense. These Master MSPs have also made significant investments in their RMM tools, and they have resources on staff who manage and maintain them. In addition, a Master MSP knows if the RMM tool they standardized on (not someone else’s) is installed in a customer environment, they will be able to provide the best support to that end-user IT customer. For example, Collabrance uses N-able/Solarwinds as an RMM tool, and we know when our RMM tool is installed in a customer environment, we can take care of 95% of the IT issues remotely. If our RMM tool is not installed in a customer’s environment, the percentage of tickets we can complete without having to involve the partner is MUCH lower.
A lot of MSP prospects we talk to have already invested in their own RMM tool, and many of them do not want to let it go. This creates a challenge with the MSP, Master MSP relationship. It does not make sense (and in many cases it isn’t even possible) to run multiple RMM tools in a customer environment. If a prospect is willing to move to the Master MSP’s RMM tool, then a Master MSP could be a great fit for your company. If you are not willing to switch your RMM tool (at least for those customers that you plan to move to a Master MSP), then partnering with a Master MSP may not be a good fit. For those of you who need your current RMM tool to stay in place for customer environments you are already managing, that’s okay. There are many examples we have where an MSP will continue to use their own RMM tool for environments they currently manage, and use the Collabrance RMM tool for new customer environments we are managing. I would encourage every MSP business owner considering outsourcing to evaluate if they would need an RMM tool in the future should they decide to partner with a Master MSP. Think about the monthly spend cost for the RMM licenses, and the time that is being invested to maintain the tool. Many times when outsourcing to a Master MSP the expense of an RMM tool for an MSP can be eliminated completely, and the resources who manage the tool today can be redeployed to other duties within in your company. Finally, it’s important to note Master MSP’s who does not require MSPs to use their RMM tool, the customer experience will likely be negatively impacted if they have to use a tool they are not as familiar with.
This one seems obvious, but nonetheless it is worth mentioning. We get a lot of calls from MSP prospects who have either no sales or no technical staff working for their team, and they are looking to a Master MSP to provide those resources.
I think any Master MSP would agree in order to have a mutually beneficial relationship, your business needs to have at least one sales resource and one technical resource.
Most Master MSP’s only support customer environments remotely, so they are unable to go onsite if needed. Some Master MSP’s also offer virtual sales support from an inside sales team, or perhaps even an account manager. However, you, the business owner need to provide the feet on the street resources to drive sales, and perform onsite work when necessary. If your business does not have these resources already in place, it will be extremely difficult to be successful in working with a Master MSP.
We field a lot of calls from business owners in other industries who have been told managed services is a great way to build business valuation, and they want to partner with a company like Collabrance to start selling managed services. They want to make this a part of their offering, but deep down they are not committed to managed services as a core part of their business. If you are a business owner who views managed services as a value add or a flavor of the month, something that someone else is going to build for you, or something you want to “dip your toe in” to see if it works, the likelihood the relationship will not work out is much higher. To be successful in managed services you need to commit the time, resources, and energy required to be successful. If you are not ready or willing to do this, then partnering with a Master MSP is not recommended (and building the business on your own is definitely not recommended).
One thing I have noticed during my years in the IT industry is that pricing is literally all over the board. I have seen "all-in" seat prices ranging anywhere from $30 per user per month to $300+ per user per month. For companies who charge less than $125 per user per month, I usually notice one of two things. One, if they have a true “all-in” offer that includes doing everything the proverbial IT guy would do for a customer, they are making little to no money, and sometimes even losing money. Two, their managed services price per seat is not truly an “all-in” offer, and does not include everything the IT guy would do. For example, onsite support might be extra, backup may not be included, email may not be included, etc.
We tell all of our prospects up front that in order to be profitable they need to plan on charging a minimum "all-in" seat price of $125-$175/month and lead their managed services sale by focusing on the value, not the price. Despite what some prospects will tell us on the phone, data from Service Leadership Inc. shows no matter what area of the country you are in, there are MSP’s selling successfully at these managed services prices and making decent margins. If your MSP does not believe it can sell an "all-in" seat price of at least $125/user/month, we do not recommend partnering with Collabrance as your Master MSP. However, there are other Master MSP’s who have lower cost per user options, but be careful to fully understand what is included in the service, what the remote remediation rate is, and where the support is coming from.
There you have it. I just listed reasons for an MSP not to do business with a Master MSP :)
If you want to learn more about why MSPs should do business with a Master MSP, the Collabrance.com website is full of helpful information. Here are a few blog posts related to a Master MSP partnership:
Hopefully this post helped guide you down the path of deciding whether outsourcing your NOC and Help Desk to a Master MSP is a good fit to grow your managed services company. Regardless of what your decision is, I think we can all agree that managed services is a great business to be in and the best is yet to come!
Jim Hocking is the Director of Strategic Relationships at GreatAmerica Financial Services in the Connected Technology Group. Jim started at GreatAmerica in 2011 and has held multiple sales positions and mentor roles in the Office Equipment Group, the Communications and Data Group and most recently served as the Director of Sales for Collabrance from 2016-2018.