2020 was a year that will go down in history as a difficult one for most of us, but in the MSP world, there were some silver linings, according to a survey we conducted in February. As it was an unprecedented year, we’ve seen many changes in the MSP market, with some MSP’s finding opportunities for growth. The biggest driving factors for this growth have been remote work and increased adoption of Microsoft 365 tools.

Here’s a summary of the positive discoveries from  our MSP survey:

• 60% of MSPs increased cross-selling 3rd party apps to manage Microsoft 365
• 87% of MSPs growing their Microsoft Office 365 business thanks to the pandemic.
• 2 in 3 MSPs found that Microsoft 365 helped them and their clients work better remotely

The most interesting discovery we’ve found is that 87% of the 325 Managed Service Providers (MSPs) surveyed told us that they saw increased Microsoft Office 365 business last year. See the sources of this extra revenue below:

Sources of increased revenue in 2020 for MSP’s

We conducted the survey between February and March to gauge the effect of COVID-19, and the subsequent shifts of employees increasingly working from home, on MSPs’ Microsoft Office 365 business.

But before we dive in any deeper into the data – a bit about you guys. Who answered our survey? Most of our respondents are located in North America (47.7%), Europe (46.5%) and Australia (3.7%). The vast majority of the people who answered have been in business for a significant amount of time, with nearly three out of every four (72.6%) having been in business for over 11 years. Talk about staying on top of your game. The fact that a similar percentage (75.4%) has 10 employees or fewer, might be a contributor to the success of these MSPs.

Here are more interesting discoveries from our survey:

Do you offer your clients email security services?

As a substantial chunk of the workforce of many companies moved to work remotely from different home offices, the need for email security increased, and the vast majority of MSP’s surveyed jumped on the occasion to offer email security services to their clients.

Microsoft 365 is a great platform to earn more recurring revenue. Do you do any of the following for your clients on Microsoft 365?

The majority of MSP’s have found new opportunities for revenue growth from Microsoft 365. Offering solutions for email security was the most frequently quoted source of recurring revenue, followed by offering help with email inbox management and training.

The increase in remote working gave my business more support volumes

More implementation means more work to support them, right? Well, according to the respondents, it does, but perhaps not as overwhelmingly as you’d think. 67.1% have said they either agree or strongly agree that support volumes have increased, while 27.4% declare that the volume of requests hasn’t changed that much.

70% of MSPs reported increased revenue from remote working

As organizations scrambled to move their teams to remote working, and as some industries were being decimated by the recession that came along with the pandemic, there were other sectors that just shifted gears to ensure business continuity for all, thriving through the chaos. Our industry was clearly one of them – in fact, 70% of MSPs said that they saw an increase in business when their clients shifted to working remotely.

Remote work impact on MSP revenue

This might sound obvious to most, but other industries that should have seen their budgets remain the same went the other way, such as the 52% of UK companies who said that they were reducing marketing budgets.

MSPs working with Microsoft Office 365 were paramount in facilitating this shift to remote working, in fact over half of the MSPs who answered our survey (55%) said that they saw an increase in implementation business for Microsoft Office 365.

MSPs increased their business with the help of Microsoft Office 365

Two thirds of MSPs surveyed felt that Microsoft 365 helped them (and their clients) transition smoothly from office-based working to remote working, and they largely agreed that this transition gave them increased business opportunities, matching the findings of our survey last year, in which 76.6% of respondents had predicted that remote working would be the biggest generator of revenue during the pandemic.

Impact of Microsoft 365 on remote work

Overall MSPs agreed that remote working made it easier for them to upsell extra solutions to their clients. Support volumes increased, too. Over two thirds of respondents told us that they had increased support volumes over the course of the pandemic.

Overall the survey showed quite a rosy picture for MSPs. Over the course of 2020 MSPs implemented more Microsoft 365 solutions than ever before, with clients flocking to collaboration tools like Teams, OneDrive and SharePoint (Cloud).

Most popular tools deployed by MSPs

Revenue streams around Microsoft 365

We also tried to understand some of the ways in which MSPs can generate recurring revenue from Microsoft 356 deployments. This is the holy grail of most businesses, so we’re hoping that you can take a look and get inspired by what you see. 91% of the people who answered the survey told us that they offer email security solutions.

Email security solutions are also used by two thirds of MSPs to generate recurring revenue, whereas around half of MSPs who answered told us that they earn recurring revenue on email inbox management. Some other services that you could think about offering your clients should include training services, process automation, setting up databases and help with specific tools, such as programming in Excel and project management in Planner.

Increased revenue opportunities from third-party tools

MSPs also saw increased revenue opportunities from the availability of third-party tools to manage their clients’ Microsoft Office 365 deployments, such as Altaro’s Office 365 Backup for MSPs.

These tools help both MSPs and their clients to have increased peace of mind, and it is clear that businesses are seeing the value in them: 85% of MSPs use secondary tools to enhance clients’ 365 setup, and 84% of MSPs who chose to go with third-party email security solutions also set up third-party backup solutions for their clients, showing that the opportunities for cross-selling these two services is very high.

How MSP’s manage Microsoft 365

Microsoft and MSPs throughout the pandemic

We also surveyed MSPs about how they felt that Microsoft reacted to their increased needs during the pandemic. The general sentiment was neutral. MSPs felt that their relationship with Microsoft didn’t really change last year, which is actually just what a brand would want to hear, as it shows consistency. MSPs were, by and large, satisfied with the support quality and response times they received from Microsoft, too.

Full data access to MSP Survey Results

If you’re interested, you can see the full data here.

The post 70% of MSPs saw increased revenue as companies work from home appeared first on Altaro DOJO | MSP.

I don’t know about you, but what an absolute blur of the year 2020 has been. I mean, don’t get me wrong, it was a dumpster fire of a year, but it’s hard to believe it’s nearly over all the same! That said, I’ve always found it works well to reflect back on the year we’ve had, come the end of December, and make some resolutions and goals for the coming year. This applies to service providers as well! Not only does this help you focus on what went well and what didn’t, but it helps you focus on improving your business as a whole.

Having been involved in the MSP space in some way/shape/form since 2002, as a customer, as an MSP, a CSP, a software vendor, technical engineering, marketing, pre-sales, and account management, I finally feel qualified to make this list. I’ve seen a lot of things that work well and many that don’t. To top that off, if you’ve been in the MSP space for any length of time, you know that the one constant in our industry is change, and change you must! Your success depends on it!

Not all of the recommendations that I’m about to share will apply to your particular case. However, you should pause and reflect on each one and ask if it SHOULD apply to you. Finally, if you’ve got a recommendation that you’d like to share, feel free to do so in the comments section at the end of this post. Service Providers are a tremendous community, and I’ve been impressed over the years when it comes to the mind-share and assistance that the community provides to its members.

That all said, let’s get started with our list!

1. Start Moving Towards a CSP Model (If you haven’t already)

Everything we hear in the industry today is cloud this, cloud that, put this thing in the cloud, sync that thing over there to the cloud…etc…etc. It’s a running joke that many are sick of hearing about “the cloud,” but there is a level of truth to all the talk. Gartner predicts that:

By 2024, more than 45% of IT spending on system infrastructure, infrastructure software, application software, and business process outsourcing will shift from traditional solutions to the cloud.

Think about that….  in a few years, nearly HALF of IT spend will have shifted towards cloud technologies. Let’s say you’re still primarily an on-prem focused shop. Let’s be conservative and ask the following question. Could your business survive if 40% of your customer base decided to go elsewhere for technologies/services that you’re unable to provide? The older on-prem and break-fix model just doesn’t scale well in the long run, and cloud adoption continues to rise faster than most old-school MSPs are able to bring on new on-prem business to back-fill.

Businesses of all shapes and sizes are getting sick of large capital expenditures. They are becoming more accustomed to the pay-as-you-go model and flexibility that cloud services provide. As such many are turning to Cloud Solution Providers to enable those services and digital transformation within their organizations, and trust me when I say you WANT to be part of that transformation. Many organizations are struggling with the new speed of innovation in the cloud, and being positioned as a leading CSP can allow you to be the thought leader those companies need and trust to help them moving forward.

How do you start making this switch? We actually did a webinar on this topic specifically earlier in the year, in case you’re interested.

For additional reading on the subject, consider the following:

• Introduction to the Microsoft Cloud Solution Provider Program 
• How to Establish Close Partner Relations with Microsoft
• 5 Ways the CSP Model Tears up the MSP Sales Rulebook

2. Invest in Your Employees

This goes without saying for most, but I’ve seen many service providers that struggle with this over the years. With the speed of change in the industry today, the only way you’re going to continue to be the key player in your space is to invest heavily in your most important asset, your staff. The technologies and innovations that we’re seeing come out in the cloud space today are so different and transformative that it’s difficult to just “figure them out.” Investing some of your hard-earned dollars into your engineering team can go a long way towards making sure that:

1. You’re properly utilizing these new cloud technologies as intended
2. You have the knowledge needed to address the vast array of use-cases you’re likely to run into in your market
3. Be seen as a thought leader in the cloud space in your market
4. Maximize the digital transformation of your customers
5. Been seen as the continued trustworthy technology partner to those you service

Good places to start would include the Azure Administrator and Microsoft 365 Administrator Certification paths. Additionally, we did a webinar much earlier in the year that talked about Microsoft Azure Certifications and how to go about prepping in case you’re interested.

3. Review Your Core Agreements and Contracts

I know, this is just the thing everyone wants to do…..  read contracts and legal documents. But in certain situations, you may be glad you did. With recent news regarding SolarWinds, which may have affected some of you, it serves as a good reminder to always be thinking about ways you can protect yourself in your contracts and master services agreements. Things you want to consider adding for this coming year:

1. Additional Liability Protection through your MSA
2. Signed waivers for those organizations that ignore security advice
3. Partnering with an insurance firm to help you and your customers be financially covered in breach situations
4. Review of supported industry regulations and whether there should be mention of them in your agreements.
5. Additional protections for dropping services in lack-of-payment or hostile-client situations

All that said, it’s worth noting that I am NOT a lawyer. While I can make some recommendations based on experience, that does NOT replace the advice and direction of a board-certified lawyer that specializes in the managed services space. I’d advise you to think about the above recommendations, and if you want to act on or have questions about any of them to reach out to your legal counsel for further action.

4. Drop the Terrible Clients

This is always a weird one for me, but it’s so important. I URGE you to drop the “bad clients.” You know the ones I’m talking about. I know it’s difficult to turn away any business, especially in the COVID economy, but the rest of your service delivery will thank you for it. Going in line with item number 5 from the core agreements section above, the ability to drop a bad client is so important. Bad clients may:

1. Not pay bills on time
2. Complain about work done
3. Treat your staff poorly
4. Not see IT as a priority
5. Prevent you from properly supporting other clients
6. Create poor profit-margins

If you need further examples, I’ve found that this is a recurring theme on the MSP Subreddit, and you’ll posts about this very topic on nearly a daily basis. So, if you’re wondering if you’re the only person dealing with this situation, you’re not. Rip the band-aid off and move on with life. Your bottom line will eventually thank you for it, as will your staff.

5. Focus on Monthly Recurring Revenue

Quick one here, but I’ve found that many organizations don’t put enough focus on this. Monthly Recurring Revenue (MRR) is king. MRR is cash that you just get every month regardless of how much business you do. It makes things cashflow easier, and it allows you to better weather those slower months. A good starting point for generating some MRR is becoming a CSP and reselling M365 licensing. You’ll find that not only does that drive a lot of new project work, but the CSP licensing will also help make the client “sticky” as well.

6. Start Selling Security Services

Security was an exploding segment of the market, to begin with. COVID-19 has actually made it even more of a concern for the coming year. The long and the short of it is this, increased digitization and work-from-home has opened up new avenues for attackers to exploit. That said, your customers will be looking to you to help them combat these issues. I’m not advocating you attempt to become an MSSP overnight. Still, If you’re struggling with where to start, I would suggest starting by enabling MFA with Conditional Access for all your customers that are currently using Azure Active Directory. MFA is likely the number 1 thing most of your clients can do to help improve their security posture.

Additionally, if you have a customer with a lot of third-party OAuth apps that are authenticating to M365 services, I would conduct an audit of those. We’ve seen a recent uptick in the number of breaches that are occurring as a result of OAuth apps in M365. We covered this issue in great detail in our recent webinar on Azure AD and M365 Security.

7. Start Content-Based Marketing Targeting Your Ideal Client

We all want to be seen as thought experts in our industry, and that’s doubly true for most MSPs. The more you’re seen as a thought leader, the more trust that earns you in terms of potential clients. It’s tough to build that monthly recurring revenue portfolio I talked about earlier if you don’t have new prospects coming through the door. Additionally, the more time you spend chasing new prospects, the less time you’re billing. If your marketing is of the caliber that you just have prospects matching your ideal client walking in the door, you’ve hit the gold mine!

Many MSPs don’t know where to start with content-based marketing. It’s easy to go find some marketing company that provides pre-canned content for you to slap your brand on, but prospects are smarter than that. They can smell a post written by a marketing person from a mile away, so I would suggest looking to your engineer staff as a start point. Sure many of them aren’t authors by trade, but many of them have knowledge and expertise to share. Leveraging that knowledge to help show your customers that your team knows what they’re talking about will go a long way towards bringing in new business. Even if your marketing efforts don’t get conversions right away, the additional touch-points via a CRM or mailing list will help keep your brand top-of-mind for when they have an IT need or are looking to change providers.

Finally, when it comes to marketing, try to avoid these common pitfalls as well!

Wrap-Up

I know it’s been a difficult year for many organizations, and while it may seem difficult to effect change within your MSP when the world is in the state it’s in. However, I would argue that this is just the time to really dig in and make those needed changes. Your business will thank you for it, your clients will thank you for it, and your employees will thank you for it, so get to it!

Thanks for staying with us and being a part of our MSP community for another year! We really enjoy creating content for you, and always love to hear from you!. If you have any thoughts on any of the items I’ve included in this list, or if you have some items that you don’t see on the list, be sure to let us know in the comments section below!

Thanks for reading!

The post 7 Business Resolutions for Service Providers in the New Year appeared first on Altaro DOJO | MSP.

It is pretty much a constant that the cloud changes all things. It has completely transformed entire industries since its inception years ago. However, as is so often on technical blogs (such as this one) we get mired into the weeds about how the cloud changes the technical side of the equation, and we stop there. Today I want to discuss the cloud from a slightly different angle. In this article, I’ll be talking about how the cloud (and the CSP Model) changes things for sales teams.

Let’s dive right in.

1. Recurring Cloud Services Revenue vs Large Hardware Projects

For years large hardware projects were the bread and butter of many an MSP. Even a simple “two hosts and a SAN” hardware project could easily net a budding MSP 6 figures in invoiceable revenue. When you factor in 20% – 25% in hardware margin, and ideally 40% in margin on labour, many MSPs did VERY well for themselves in regular hardware project work. Factor in the fact that years ago it was customary to do a hardware refresh every 3 to 5 years and an MSP could very well sustain themselves on this practice for some time given a deep enough customer base.

Today, that story has changed. The cloud has transformed the ecosystem in such a way that many more organizations are able to get by without the need for highly available clusters on-prem due to cloud technologies and ever more cost-effective replication technologies. Wherein a customer would have previously spent $100k+ on hardware every 3 to 5 years, those same companies are now only spending a fraction of that. Pair that with tighter hardware margins, and what may have previously been a staple of your monthly income is now a footnote on your monthly ledger.

Sure, you could likely try to renegotiate hardware margin with your suppliers, but I’ve found in the past it’s a constant uphill battle with non-consistent returns for that level of effort.

While switching to MRR (Monthly Recurring Revenue) focused cloud services may not net you overly larger profit margins, you can provide more volume with the same staffing typically, and there are many opportunities for bundling services on top of that. In the CSP space, you can generally expect a 15% – 20% margin on monthly cloud services. You can typically addon management and optimization services on top of that for an extra 5 to 10 points. That said, even if you did nothing else for the client that month (unlikely), you’re still guaranteed that amount month over month.

It’s tough to lose in that situation, and many MSPs quickly realize the power behind offering monthly cloud services as a result.

2. Changes in Commission Structure

With the above said, the change from regular on-prem hardware projects can often bring a shift to commission structure as well. As many traditional sales folks from the “on-prem project work side” of the house will be used to the large lump sum commissions, the shift the CSP model brings in commission may be something of a shock. The recurring revenue to cloud model provides more of a slow build in commission as opposed to larger lump sum commission payouts. Changing this mentality in your sales-staff could be a struggle.

For example, let’s say Bob, a sales executive from the MSP XYZ corp. sells $130k in hardware and services to a company and receives 8% commission on that sale. Bob would get $10,400 in commission. 3 years later that same customer decides they’re going to move many of those same services into the cloud and will only need a single host onsite. The new single host comes out to $25k with another $2400/month being added in cloud services. Bob gets the same 8% commission on this sale. The first month Bob gets $2192 in commission with an additional $192 month over month afterwards, totalling $9104 over the same 36 month period.

The second option seems like a lot less on the surface. However, consider this. After the initial sales cycle, the month over month work needed to manage that customer spend should decrease. Large capital projects take a lot of time to scope, lots of client communication and a lot of up-front verification work. Cloud services don’t typically require that level of scrutiny (due to cloud flexibility) and as a result, Bob will be able to take on more customers over time.

That said, be sure to do a commission exercise with your sales staff once you start committing to the CSP model.

3. New Sales Should Look to Provide ONLY What is Needed

The first sales model example above dangles the large lump sum commission in front of the account manager. Pair that with the fact that when companies are buying lump sum IT gear (and projects) that are designed to be spread out over 3 to 5 years it made sense to address the immediate IT needs of the business and those needs that were likely to come up within that time frame as well if possible. This led to potential situations where a solution was being sold and implemented that may have not been a 100% fit for the need.

The beauty of the cloud is that it’s to both the client and the CSPs benefit to only consume and use what is absolutely needed. This is largely due to the flexibility of the cloud. Not only does it save the client money, but it also helps you be seen as the trusted advisor to your client in that you’re looking out for their best interests AND their wallet.

4. Initial Sales Cycle Can Be Longer

This item is really a temporary item that I could see going away at some point due to more and more companies adopting cloud services as time goes on. The point here is many organizations that have not yet adopted some sort of cloud service are not familiar with how it works. There is a learning curve not only with the consumption of the service but also with the billing, operation, and the maintenance….etc…etc. It’s very much a whole new world for the client in every way/shape/form and as such making the sale and managing the process are likely to take much more time.

As such, when you start looking at pivoting to a more cloud-first approach, be sure to take this fact into account with your planning and initial turn around times.

5. Rate of Change and Micro-Improvements

We kind of covered this one a bit organically, but in case you’re not reading through each bullet point in its entirety, it’s worth mentioning again because it does contribute to the mental (and operational) shift you need to make with your sales team when pushing more cloud services. It’s no secret that cloud services have increased the rate of adoption of new technologies. Due to this, while the initial sales cycle may be longer, subsequent cycles could be MUCH shorter. Reason being the cloud lends itself well to micro-improvements for your client base and this helps spur the adoption of rapidly changing features and functions.

Also worth mentioning is that once your customers are on the operational expenditure model that the cloud provides instead of larger lump sum purchases, they’re more likely to have those more frequent conversations about additional services and improvements in their toolset. Because of this, your sales staff needs to be ready to provide more regular touchpoints and ongoing communication with your clients as opposed to monthly or quarterly touchpoints.

Additional Resources

This is a pretty extensive topic, and we could discuss additional points for quite some time. However, to go any further would likely start entering whitepaper and eBook territory. If you’re interested in more information around this topic, we recently hosted a webinar about how to pivot from being a traditional MSP to a Cloud Solution Provider instead. That webinar can be found below.

Wrap-Up

What about you? Have you made the switch from traditional MSP services to the CSP approach? Did you struggle to get your sales team through some of these changes? Were there struggles not listed above that you found yourself dealing with? Let us know in the comments section below! We’d love to hear!

Thanks for reading!

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In a previous post, I covered the term CSP (Cloud Solution Provider), and what the differences are between a CSP and an MSP. Since then the question of continuing to offer on-premises services has come up a few times with readers and others in the community. Many seem to be wondering, especially given the current situation with COVID-19 and all. I’d like to address this question specifically in today’s blog post.

Before we being, if this is something you’re serious about, watch our on-demand webinar to find out How to Transform your Aging MSP into a Lean CSP Machine.

Should You Make the Move to Cloud-Based Solutions?

If you’ve read many of my blog posts on this site and the other Altaro blogs you’re likely prepared for one of my favorite answers. That is, “It depends”. On-premises requirements vary based on the organization you are providing services for. A small-10 user realtor agency, who only uses document-related apps has far different requirements than a 400-user manufacturer that has a multitude of applications ranging from machine controls to engineering software, such as CAD. However, where possible cloud-based solutions should be strongly considered if not preferred in most situations.

It is your job as the CSP to determine what level of cloud is appropriate for your customer.

That said, the short answer to the question about ditching on-premises servers amounts to this. Most of your customers will likely require some sort of hybrid cloud deployment.

Hybrid Cloud and the CSP

The truth is that very few organizations can go 100% cloud. Don’t get me wrong. That percentage is increasing as time goes on, but right now there are still many use-cases that require an on-premises footprint. For example:

• Highly GPU Intensive Workloads
• Latency Sensitive Applications
• Complex Monitoring Needs
• Poor Connectivity
• Disconnected (No External Connectivity) Scenarios
• Recent Large Capital Investment in On-Prem Infrastructure
• Low Customer Comfort with the Cloud

A good CSP will continue to leverage on-prem (only where it makes sense) and pair that with what works well in the cloud, such as:

• Backup and DR
• Email
• File Storage
• Web Apps
• Office Applications
• Collaboration Software
• More!

Good CSPs provide exceptional value in knowing where on-prem and the public cloud intersect, and they can apply solutions for both with a high degree of skill to fill all the technology needs of a business.

Are there CSPs out there that ONLY do cloud? Sure. However, you’ll likely find that many of those CSPs operate in an industry vertical that organically lends itself well to running cloud-native. Other verticals aren’t so simple. Manufacturing for example often employs complex machine control and supply chain software that doesn’t lend itself well to running in the cloud (yet). This is not to mention engineering and parts-design software that doesn’t work well in cloud scenarios in most cases either.

Another good example is healthcare. There are many functions within a hospital that cannot be off-sited to the cloud either to regulatory reasons, or a given function is so critical to patient care (often life and death), that they can’t risk even the slightest connectivity outage.

Where and How you can Move to Cloud-Based Solutions

My call to action for all new and existing CSPs considering the core question of this article is this: Lead with cloud on all things, but don’t jam a square peg in a round hole. Remember, a good solution provider installs the solution that is right for the business.

Finally, if you’d like to learn more about CSPs and how to transition to the CSP model, watch our free webinar

Wrap-Up

What are your thoughts? Have you been trying to lead with cloud and struggling? Are your customers hesitant to invest in the cloud? Let us know in the comments below!

Thanks for reading!

The post Is it Time you Ditched On-Premises Services Completely? appeared first on Altaro DOJO | MSP.

The technology industry is rife with acronyms, so many readers have likely become numb to new ones hitting the market. However, there has been one acronym that has been seeing much more use these last few years, especially in the service provider space, and the acronym I’m talking about is, of course, CSP. The term CSP has been associated with the industry’s group of service providers and those that are not in the know often wonder why it’s become so prevalent. In this article, we discuss what a CSP is and what services they deliver.

What is a CSP?

In official Microsoft terms, CSP stands for Cloud Solution Provider. This is NOT to be confused with Cloud Service Provider (more on that soon).

A Cloud Solution Provider is what I would term an evolved MSP that has matured into offering flexible, scalable cloud solutions such as Microsoft’s Azure technologies and the Microsoft 365 stack. Other cloud technologies may be offered as a value-add to supplement these offerings, but the core services provided reside in one of these two areas.

If you want to learn more about how to become a CSP or how to transition from an MSP to a CSP, watch our free webinar How to Transform your Aging MSP into a Lean CSP Machine.

Note: You may see the industry term Cloud Service Provider as well, technically-speaking this term is used to describe those organizations that provide and develop cloud-based services such as Amazon, Microsoft, Google….etc. however, it is also been used incorrectly to describe a cloud-based MSP.

What are the Benefits of Being a CSP?

The term CSP is often is associated with a modern-day IT services organization, and many businesses looking to secure those types of services are on the lookout for organizations with the CSP terminology associated with them. Outside of that many of Microsoft’s ongoing partner and channel efforts are being realigned with the CSP nomenclature, so if a partnership with Microsoft has been important to your MSP in the past, switching to the CSP program has never been more important.

Benefits of being in the CSP program include:

• 15% – 20% margin (typically) on recurring MS cloud and office services (may vary based on region and other factors)
• Access to Microsoft Partner resources (support, account management, marketing…etc)
• Backend incentives and opportunities based on current Microsoft defined goals
• Industry recognition
• And more

A lot of providers will look at that margin and say…. that’s awfully low and not worth my time. While yes, that is true, and it is a relatively low margin, however, Microsoft builds their services for partners in such a way that it’s easy to bundle in value-added services on top of it. This could be an additional third-party application you provide that compliments the Microsoft service or special knowledge and expertise you have in-house that forms part of a package that brings the total up to a more appealing margin.

Remember despite industry misconception, the cloud is not easy or simple. Many new CSPs fail to put an adequate value on the knowledge they have and work they put into managing solutions on behalf of their customer base. If you provide value in managing these solutions for your customers, make sure you’re getting paid for it. Again, the service is designed to be bundled with other partner services, so don’t simply rely on the 15% to 20%.

In short, partners can use the Microsoft CSP program to provide the power of the Microsoft Cloud to customers while also providing unique in-house skills and value-add on top of it.

How Do I Become a Microsoft Cloud Solution Provider

The process is actually fairly simple:

• You must first join the Microsoft Partner Network
• Enroll in the CSP Program
• Connect with an Indirect Provider for Additional Assistance

Can a Traditional MSP Become a CSP?

With the tools provided by the CSP program, your organization will be equipped to deal with the modern-day technology challenges facing the world today. On top of that, you’ll be able to easily bundle you special and unique services on top of that to bring true value to your customers. Becoming a CSP is relatively straight-forward and Microsoft is keen to help where they can, however, converting from a traditional MSP and navigating both the practical and business concerns can be tricky.

As I’ve worked in both a traditional MSP and currently for a fast-growing CSP, I have recorded a webinar on the topic: How to Transform your Aging MSP into a Lean CSP Machine. The content is focused specifically on this issue but also covers the CSP model more generally and why now is perfect time to take the leap.

What about you? Any concerns or questions in joining this program? Have you joined the program and had success? Difficulties? Watch the webinar or let me know your questions or experiences in the comments section below!

The post What is a CSP? appeared first on Altaro DOJO | MSP.

COVID-19 has caused unprecedented effects on the modern world. Entire national economies are being rewritten to account for the losses in business and lives, with some industries being affected more than others. We have been asked by many of our partners for advice on how MSPs can respond but the best way to understand the situation is to gather data from those affected. So we set up a survey for MSPs to give their feedback so we can learn from each other and help steady the boat through these tough times.

COVID-19 Survey for MSPs

The main aim of the survey is to determine what impact the Covid-19 pandemic has had on the managed services sector, how have MSPs responded; and what is the outlook for the industry. 13 key questions were asked to a wide range of MSPs on how their business, profits, operations, and staff have been affected by the pandemic and associated lockdown measures. The participating MSPs comprise a fully international sample but the majority from the US and Europe.

The State of MSPs During COVID-19 – Survey Full Results

Infographic

The post The Impact of COVID-19 on MSPs Revealed 📊 Infographic appeared first on Altaro DOJO | MSP.

In this article, we’re going to be talking about how creative management and Imagination can help you effectively lead your team to victory. We’ll start with why these traits are important in leadership, and then get into some tips and an example of how it’s helped me personally in the past.

But first, a quote.

“Imagination is more important than knowledge.”

–Albert Einstein

How Imagination Applies to Leading an MSP

“That’s it!” I thought to myself. “That’s what was missing!”

I heard a speaker last night. He certainly had knowledge of a difficult subject, but something was missing. Instead of just sharing the information on slides in a PowerPoint presentation, he could have done a better job connecting the dots. He could have read his audience better. And he just seemed unused to thinking on his feet, even though he has been in his business for many, many years.

I found out later that he knew, personally, a member of the audience…someone whose response to his message was unpredictable…and that made him nervous. But the speaker was knowledgeable, so what was the problem? What feedback could I give him? The speaker lacked imagination. He lacked the imagination that would have aided him in making his presentation more fluid. Imagination might have helped him read his audience and tailor at least his speech, if not his topic, to them.

This is often true of managers, as well; managers who set the culture of their business areas or departments, which then have an impact on the company culture. It isn’t enough for managers to have industry knowledge. In fact, I’ve made a living from often not having industry knowledge. What do I do when that’s missing? I listen. And I use my imagination.

I listen to the industry experts; those who are doing the actual work. Those closest to the customers. Those managing the finances. Those drumming up the business. I listen to what is said and not said. I listen to what is said in public and what is said when fewer are listening. I listen to connect the dots. I listen to fill in the blanks. Then, I use the knowledge I’ve gained – and my imagination – to put together a plan of action. I revisit the subject matter experts at each layer of the industry to share this plan; to check it for accuracy and feasibility. And together we imagine it working. This technique not only requires imagination but flexibility.

Some Tips for Leading with Imagination

The level of need, knowledge, experience, behavior and guidance will inevitable change by day, team member and by project.

• [Rick Conlow and Doug Watsabaugh]

1. Manage accordingly.
2. Learn to improvise without sacrificing quality.
   1. Remember the project management triangle: Budget, Quality, Timeline. It’s a triangle. When one line moves, another line MUST ALSO MOVE.
3. Learn to navigate the unpredictable in ways that instill confidence in your thinking.
4. Go with the flow to adapt to your followers’ needs WITHOUT forfeiting the things that matter.

A Real-Life Example Where Imagination Won

I’m not always successful right off the bat, and that’s humbling. I had an assignment where the needs of the “C-suite” (CEO, CFO, etc.) were laid out for me (as is typical of my assignments), but when I met with the IT Director (to whom I was assigned to support), he told me I was wrong. I understood our job was to stabilize the current environment of the core business application, which was customized and therefore different at each of the plants where it had been implemented. We were to complete the conversion of the most recent company location and bring up the application for a location that was not yet using it. In China, which adds to the difficulty. To accomplish this, we were to stand up a 2^nd instance of the application and keep it as close to out-of-the-box as possible, standardizing the operations of all locations to maximize efficiency. The IT Director had different plans.

I managed the project as required by the C-suite, which created direct conflict not only with the IT Director (which you already guessed would happen) but also with his entire staff. (I kept the C-suite informed of all that transpired by meeting with them weekly at a recurring meeting; spontaneously as needed; I had their full support.)

Unfortunately, the weekly meetings with the IT staff deteriorated quickly into weekly opportunities to question my plans, to question my abilities, to question the CEO’s vision, motives, and more. The biggest problem, as far as they were concerned, is that I didn’t have a concrete plan I could articulate to them and guarantee I would follow. But neither did they. And they had not been successful on their own in their attempts to move forward, which is why I was hired to help. I had a general idea of how to proceed, based on previous successes and the information gathered thus far, but I had a lot to learn (a lot of questions to ask; a lot of listening to do) so I knew the plan would evolve as the project developed and as the stakeholders emerged, but I couldn’t promise them a roadmap to follow – I didn’t know what detours awaited. They were truly uncomfortable with flexibility. And imagination? All they could imagine was losing their jobs, which they were repeatedly assured was not the plan.

Will you be the leader that refuses to make adjustments accordingly? Or will you be the one leading the pack through the unprecedented territory? Will you expect every member of your team to be on the same page as you at all times and become frustrated when one falls short? Or will you willingly and cooperatively work to understand the unique needs of each team member, so that you can effectively and collaboratively reach your goals together? Is it about you or is it about your team members? [Rick Conlow and Doug Watsabaugh]

I walked the floor of the building I worked in. I talked to people at the other locations. We included stakeholders from the other sites – including China – on our project team. Staff from yet other locations came to HQ to meet their counterparts face to face. I had to hound some members of the project team to complete their assignments. Others not only took on additional responsibilities but recruited their colleagues to assist. We tested. And tested some more. We moved the Go Live date twice. Flexibility was key. And teamwork was key.

In the end, the project was a success. Along the way, one IT staff member left voluntarily to take a job in another state. The remaining staff blamed me; however, never in my career has someone moved to another state to get away from me! And, as you may have already concluded, the IT Director was encouraged to look for another job and was replaced by someone better suited to the corporate culture and vision. The network administrator went rogue and had to be fired. But the most vocal, most emotional, most combative member of the IT staff told me at the end…

“I don’t know how you did it, but it works, and we couldn’t have done it without you. I’m not sure I could have accomplished what you did.”

She stayed with the company.

Wrap Up

Imagination is more important than knowledge. For knowledge is limited, whereas imagination embraces the entire world, stimulating progress, giving birth to evolution.

Albert Einstein’s imagination conjured up what later became knowledge. Today we call that “forward-thinking.” Where is the focus in your corporate culture? On industry knowledge? Or on imagination?

While this may be a different topic than we normally address on this blog, the option for having an open mind and having the imagination of looking at things differently will ultimately help you in running your MSP.

What about you? What situations have you been in where imagination has helped you overcome a customer issue? Let us know in the comments section below!

The post How Creative Management Can Transform Your MSP appeared first on Altaro DOJO | MSP.

Here’s a question I often ask myself…. I’m not an engineer. Why, then, am I a successful manager of engineers?

1. First, I know what I don’t know, and I trust them as subject matter experts.
2. Second, I trust but verify. While I may not be trained as an engineer, I have years of experience listening to engineers, managing IT for a variety of industries, managing complex IT projects, and managing IT engineers. Therefore, I’ve developed ways to partner my knowledge with theirs. This is key when it comes to leading engineers

In a nutshell, you don’t necessarily need to have the same level of technical expertise of people you manage to be an effective manager and leader. But in this article, I’ll explain what you do need to know.

How to Lead at a Technical Level – An Example

Let’s talk through this on the basis of an example, that of a new project. Below are some considerations and a working process as you lead your team through a technical process.

Where does a project conversation begin? With the customer’s needs, of course, and a solution recommended by a salesperson or an engineer (depending on your business structure). Next, a subject matter expert, aka, an engineer, needs to verify the solution and fill in any missing pieces. The steps I would suggest and are below.

1. Review lessons learned on previous projects. Maintain a database of projects by industry, operating system, application, and more, or a collection of project plans – including closure documents – to use as a reference. Project plans, meeting agendas and minutes, and timesheets should tell us where we met, went over, or were under budget. Change Orders should inform us of additional questions to ask and potential hurdles that may need to be overcome. This is required reading. Should someone declare “that won’t happen with this project,” they must be able to tell the team why. That answer may spark yet another angle that must be explored.
2. Ask the engineer to draw the solution. Ensure there is a line item on the project plan for every step and an hours budget to complete each. The hours budget should not be limited to completing the work; include prep (creating new or updating existing documentation of current environment, backing up current configurations, OS or application upgrades, for example), completion of the work – including after-hours cutovers if required by the customer – and then creating or updating environment documentation.
3. Ensure the project plans of newer engineers are reviewed by seasoned veterans. Even if the veteran hasn’t completed this exact project (rarely, if ever, are two IT projects the same), their field experience will prove valuable, either in the form of suggestions or in simple verification that “it” will work.
4. There is more than one way to complete every task. Encourage dialogue. That we all think differently is the best way to ensure we’ve approached the project from every angle we can conceive, individually and collectively.
5. If you haven’t done so, already, begin to document successful, standardized installations. These, used alongside your project library, will provide you with the framework for not only this project, but your next one, as well. Continue the dialogue around this standard with each engineer who builds this environment, modifying as operating systems and applications change, and as new lessons are learned. These standardized installations should include a suggested budget for each phase. Spending the time documenting this knowledge, now, will make your future planning more efficient and your projects more accurate, increasing not just customer satisfaction but the satisfaction of your engineers and your company, as well.

How to Lead an MSP Team at an Inter-Personal Level

While the above is a good example, it’s more procedural and process-driven, right? It’s likely stuff that you’re doing already (or should be doing already). Thus far, I’ve outlined only how to communicate with engineers on a technical level. But how do you communicate with engineers as people? This is where MSP leadership becomes an art and less of a process.

To start, It’s important that you believe your team comes to work each and every day desiring to be successful.

• Ensure you are meeting with them on a recurring basis both as a group and as individuals. I find success meeting with my team monthly during the lunch period, providing their lunch (and giving them the opportunity to decide the food.) Sometimes I have an Agenda (corporate updates, rumors to clarify, goals to set, input needed), and sometimes we simply talk about what is on their minds. Yes, we take notes (but no one has ever asked to see them.) I encourage free, respectful dialogue. Planned in advance, most of the time, the billable work can be scheduled around these meetings, ensuring the entire team can attend, in person, together. This is important because it is rare that IT teams are sitting at their desks all at the same time with opportunity to work as teammates.
• Working at an MSP is stressful work. Multiple client demands, more work than time to complete it, unexpected outages…all of these can weigh heavily on engineers. If an engineer feels there is no one to share the responsibility, it can lead to burnout. If the engineer knows s/he has a team to rely on if/when needed, job satisfaction (and, therefore, retention) is higher.
• At each meeting, I ask them to share something they’ve recently learned. And even though they are salaried, I respect their right to a duty-free break and encourage them to take an hour for themselves before or after our lunch meeting.
• I schedule quarterly conversations with individual members of my team. (More about this follows.) by meeting with them individually and as a team, I am able to discern the difference between an individual concern and a concern shared by the team. This helps me know where I need to focus my efforts in supervising and supporting engineers.

By now, you are asking yourself, “when am I supposed to fit in all of these meetings?” You already are. But the time you are spending is probably reactive, rather than proactive. I work hard to schedule and plan the conversations with my staff, rather than make the time for conversations that must happen because something went wrong. Here’s how.

Running Effective Meetings with Your Team

Team (lunch) meetings – Pick a day of the week likely to have the least impact on billable time. Pick a week of the month. Send a meeting invitation to your team, including a conference room and any administrative staff necessary to make this a success, for a recurring meeting, 12 months at a time. Mark your calendar 3 months ahead of the last meeting to re-evaluate your day of the week and week of the month and create (and share) the new recurring meeting (or continue as is, extending the end of the recurring meeting.) Create, for yourself, a recurring calendar item a few days before each meeting to order lunch, call for Agenda items, and create the first draft of the Agenda. Create a recurring calendar item immediately preceding the meeting to finalize the Agenda, set up the room and manage the lunch delivery.

Meeting with individuals – On the first day for a new hire, I schedule a follow up within the first week; another follow up after a two-week span; another follow up three weeks later; then monthly for the first 6 months. After that, the individual meetings are quarterly, falling in line with their hiring date. These are easy to calendar in advance. If something has to change, the engineer needs to reschedule with me (or me with the engineer). Don’t let the unknown prevent you from scheduling. Get it on the books now, and you won’t overlook it. Current staff are scheduled to meet with me for their evaluation the month of their hire. They are also scheduled to meet with me quarterly. Create a spreadsheet with the name and date of hire. Document the corresponding dates by quarter. Send meeting invitations. When this is a habit, the meetings become pretty short, as a rule.

This is the agenda I’ve used and would suggest. These questions are embedded in my meeting invitation, so the engineer comes to the meeting prepared.

1. Do you LOVE your job?
   1. If yes, what specifically do you love?
   2. If no, what prevents you from loving your job?
2. What are 3 things you are proud of having accomplished since our last one-on-one? (Keep in mind this should never be longer than a 90-day window if you’ve followed my directions, above.)
3. What do you need from me to succeed?
4. What do you need to do to succeed?
5. What has it been like (again, looking at the last 90 days) to be supervised and supported by me? (Because my job as the lead Project Manager took me out of the office often for months at a time, this question was super important to me as it allowed me to adjust my ‘level’ and style of management as needed for the engineer or for the team.)
6. What do you wish <I usually insert the name of our CEO, here> knew? [If I sense dissension in the ranks with a VP, or a sales guy, or another member of our company, it is that name I insert here.]

I don’t require engineers to love their job, nor do I require them to appreciate me as their manager. I don’t record these meetings. The only notes I take are those items I need to guide myself to improve or continue, should there be something in my management toolbox the engineer finds beneficial. But this open dialogue works. It makes it easier for me to supervise and support, as few things sneak up on me and take me by surprise. I feel informed – not an easy task those months I spend only 1 day/week in the office. And we feel connected, which means retention is high. Should an engineer decide to leave, I tell them I will support them in their staying, and I will support when they choose to leave the company, but they must make a fully informed choice, either way. If I’ve done it right, that is exactly what happens.

Final Thoughts

A bonus of this method of supervision and support is I find engineers become comfortable dropping in my office as needed, because they think of me as a collaborator, not just as their boss. And they know there are times I will just listen. When an employee asks if I have a minute or simply appears in my office, and it appears there is something on his/her mind, I ask if they are here to vent or if they need help solving a problem. Their answer dictates how I listen. When an employee comes in to vent, s/he is looking for my courage and reassurance. If s/he is looking for help in solving a problem, I need to respond using my skillset and experience.

Is my system infallible? Not by a long shot. I’m pretty good at reading people but when I’m wrong, I’m really, terribly wrong. It hurts to be blind-sided. But I learn. And I don’t quit trying. Neither should you.

What about you? Have you tried some of these management styles? Do you attempt something different? We’d love to hear! Let us know in the comments section below!

Looking for some more leadership articles? Our article on industry certifications is a great one when it comes to working with your engineers on what to study on!

Thanks for reading!

The post How to Lead a Top Class MSP Engineering Team appeared first on Altaro DOJO | MSP.

In this article, we’re going to be talking about what’s in a Master Services Agreement (MSA), and what you should include when building one for your MSP. This will serve as a nice form of reference when building your own, or when making sure your existing MSA is sufficient. Let’s take a look!

The Bottom line: Building your master services agreement is the foundation of a strong defensive strategy for an MSP and a way to share with your customers how you conduct business.

Offense (revenue generation) can generate a lead, but a solid defense protects your lead and can even score points for you. Upon being convinced that you, as a Managed Services Provider (“MSP”), should have a Master Services Agreement, you should begin by outlining your strategy and making it consistent with the culture you are trying to create with your prospective clients. Understand that this will likely be the first document that you enter into with your prospective client. As a result, it is important that the document reflects the culture and mission of your organization and the relationship you are creating with your client. Although it is not intended to be a marketing piece for your company, it certainly will speak volumes about how you approach your relationships, from a client’s perspective.

Master Services Agreement Background

As explained in my previous article, a Master Services Agreement (“MSA”) is “an agreement between at least two parties (normally just two parties) dealing with the terms and conditions that will apply to future transactions between the parties. It is likely used when the parties contemplate more than one service or offering between them.” It is, essentially, an umbrella over the entire relationship and is to be applied to all services or offerings to the client. These services or offerings are generally adopted by an addendum or Statement of Work. Understanding this structure – MSA first followed by a Statement of Work or Addendum- is necessary when determining the business approach you will use when constructing your MSA.

There is not just one MSA template that will work for all MSPs. Be wary of adopting an “off the shelf” template that embodies all terms that anyone could conceive of. Templates rarely reflect the culture of your company or of the relationship that you wish to perpetuate with your clients.

For example, some MSPs want to make sure that all clients are on the same MSA and refuse to negotiate any terms. Others are willing to negotiate a few terms with their clients, and still, other MSPs are fully willing to negotiate most terms with their clients.

If you are an MSP that is unwilling to negotiate terms, you will want to have an MSA that addresses the most basic of terms and which will likely not lead to any disagreements with your prospective clients. As a result, your MSA will likely not be as comprehensive as it could (or perhaps should) be. It will likely be necessary to bolster your Statement of Work or Addendum with language that is negotiable in order to fully address your defense. This may create an impression with the client that the MSP competes based upon the quality of their services, leaving the details and specifications of each engagement in the Statement of Work.

To the other extreme, if you are an MSP that wants to have the first document govern the relationship primarily and only have skeletal Statement of Works or Addendum, it is likely that you will have a more comprehensive MSA to start with. The client is more likely to perceive you as more client-oriented since you are setting comprehensive guidelines at the onset, and you are listening to their desired contractual modifications.

Some MSPs will insist on the comprehensive MSA with little to no modifications with their clients. With this “take it or leave it” approach, the client is more likely to perceive this MSP as competing on price.

As a result, at the onset, you have to determine the impression that you want to create with your prospective clients and existing clients. Once you have determined which approach you want to adopt, you next have to create a list of the terms that you want to include in the umbrella agreement. Depending upon your business strategy (see above), this may be a comprehensive list of all terms that could possibly be addressed, or it may be a shortlist of basic “must-have” terms.

Critical Terms that Should Be in Your Master Services Agreement

While largely a matter of my opinion, I think the most critical terms include:

• Cybersecurity
• Client Obligations
• Confidentiality
• Indemnification
• Limitation of Liability
• Disclaimer of Warranties
• Assignment
• Venue Selection
• Term and Termination

Cybersecurity

In today’s ever-changing technology environment, it is absolutely critical to address cybersecurity in the relationship between the MSP and the client. It is naïve to believe that any attempt to exclude security of information from services will be upheld by a court. Courts sometimes ignore language in contracts that the court deems as unfair, using many different common law legal doctrines. A party’s recourse is to appeal, which is expensive, and appellate courts are reluctant to reverse the trial court’s decisions. It is far better to address cybersecurity efforts of the MSP in the MSA and have an acknowledgment by the client that the efforts are limited to the services being offered and that there is no guarantee that there will not be an actual breach of the security measures or precautions implemented by the MSP for the client. The MSA should focus on the efforts to prevent the breach of security rather than purporting to prevent all breaches of security. While the cybersecurity issue should also be included in relevant Statements of Work, in today’s environment, this issue should also be broadly addressed in the MSA.

Client Obligations

Client obligations address the MSP’s expectations of the client. For instance, I believe it is critical that the client is required to cooperate, including providing the MSP with liberal physical and virtual access to their system and environment so that the MSP can perform its obligations. I also believe it is critical that they provide you with one point person to take direction from so that the MSP is not having to address multiple and sometimes conflicting directions from different client representatives.

Confidentiality

There is certain to be access to confidential information during the course of the relationship. In fact, it is likely that each party will supply some confidential or proprietary information to the other. This should be addressed in the MSA as the information will likely be supplied in advance of the Statement of Work or Addendum being completed. For those adopting a minimalist approach to the MSA, they may want to start with a blanket non-disclosure agreement so as to declutter the MSA.

Indemnification

Indemnification means to stand in the shoes of another party for a wrong that you have committed. I believe it is important that the client protect the MSP from the client’s wrongdoing. The client should have to defend and pay for its own transgressions, even when a third party implicates the MSP.

Limitation of Liability

The limitation of liability provision addresses the total liability exposure that an MSP will have in the relationship. While tempting to limit liability to $1, such aggressive positions will likely not be upheld. Additionally, most MSPs have insurance coverage applicable to certain claims, like negligence. It is far more reasonable to allow the client to pursue the insurance coverage that you have procured and paid for rather than trying to explain to a court why the MSP procured insurance coverage beyond the limits of liability and thereby contemplating that the limitation of liability would not be enforced by the court.

Disclaimer of Warranties

Clients may argue that the promotional literature or negotiations between the parties constitute warranties. Courts try to give meaning to the understandings and expectations of the parties to the contract. As a result, it is critical to disclaim any of these potential warranties.

Assignment

If the MSP is to have real value in the subscription services being provided to its clients, it needs to have the ability to unquestionably assign the contract. Without an assignment provision in favor of the MSP, an exit for the owners of the MSP is significantly more complicated and may entail the suitor acquiring consents from every client in order to realize full value for the MSP. To protect the value of the business, the MSP should be able to point to language in the MSA, allowing it to assign its rights and obligations. The absence of an assignment clause generally means that the contract is assignable but, when trying to protect the value of your business, why allow a buyer to discount (whether justifiable or not) for failure to have an assignment provision?

Venue Selection

Venue selection and governing law deal with the selection of the state laws which will apply to the relationship and the in which jurisdiction disputes will be litigated in. Be wary of selecting states and venues that are not close to home as there is increased expense and uncertainty associated with such litigation.

Term and Termination

“Term” deals with the duration of the MSA. MSPs should strive to have the MSA be in force as long as any services are being rendered and for a period thereafter. If you have a date-certain end to the term of the MSA, you will be forced to renegotiate the terms of the MSA at the conclusion of the term. This may lead to undesirable modifications that would not have been requested or proposed if the MSA was indefinite or tied to the provision of services.

Termination deals with when the parties can conclude the relationship and how the parties will treat each other, and their information, when services are no longer being provided. For example, if the client fails to pay, the MSP will want to be able to point to language in the MSA dealing with how the services will cease.

Important Terms that Could Be in Your Master Services Agreement

Again, this is a matter of my opinion, but I think a relatively comprehensive MSA should also address these additional terms:

• Payment
• Non-Solicitation or Hire of MSP Employees and Liquidated Damages
• Limitation of Remedy
• Waiver

Payment

Payment timing and terms are important to the operation of the MSP’s business. If the payment issue is not addressed in the MSA, the MSP is left with negotiating these terms in the Statement of Work.

Non-Solicitation or Hire of MSP Employees and Liquidated Damages

The MSP’s most valuable asset is likely the technical team that it employs. Tens of thousands of dollars are invested in securing and training these individuals. If a client determines that it is less expensive to employ a technician than to continue with the MSP, it will likely try to hire your technician away from you. Having a provision prohibiting this practice is likely, in my opinion, not going to be enforced by a court. It is far better to anticipate that this practice may occur and define the value of the training with a provision requiring the client to pay the MSP when it hires employees of the MSP.

Limitation of Remedy

A limitation of remedy clause sets forth the requirements that a Client must take prior to engaging in efforts to mitigate alleged breaches by the MSP. Without such a clause, the client can simply retain outside expertise to cure supposed breaches by the MSP and send the bill to the MSP (or deducting it from the amounts owing). Requiring the client to follow steps prior to seeking assistance from others ensures that the MSP is provided with notice of the issue and an opportunity to cure it within a defined time period.

Waiver

Addressing what constitutes a waiver of rights under a contract is about as important of a term as any of the critical terms. The failure to address waiver may lead to the application of legal doctrines with unintended results. For example, if your termination clause provides for a cessation of MSP services if the client has failed to pay within 15 days of the date the payment is due, it is possible for the court to conclude that the provision of services on day 16 is a voluntary assumption of the new duties and the contract does not apply to the services following day 15. As a result, the subsequent cessation of services on day 30 (presuming the MSP does a “good deed” by providing more time) may be punished by the court determining that there was a complete waiver of the cessation.

Other Terms that Could Be in Your Master Services Agreement

There are a few other potentially important terms to consider:

Force Majeure

The force majeure clause sometimes referred to as acts of God, deals with unpredictable circumstance. Examples of these events would include weather anomalies, power outages, strikes, declaration of war. When these events occur, parties are relieved of certain obligations.

Cyber Ransoms

Cyber ransoms are a growing phenomenon, and it is prudent to consider who is going to pay and what level of insurance will be required by each party. Having it detailed in the MSA will provide additional defensive strength for your business.

Severability

What happens if one clause in the contract is deemed to be unenforceable for some reason? The severability clause gives the remainder of the contract full force and effect. The failure to have a severability clause may invalidate the entire contract if one provision is found to be void or unenforceable.

Others

There are many other terms to consider, like payment of taxes, independent contractor status, other insurance requirements, and more. Having a tight and well-planned strategy for your MSA and relevant SOWs/Addendums is absolutely necessary to establish a solid defensive strategy. The days of cutting and pasting from MSAs that you find online or from other providers is the equivalent of constructing a building on sand. Have a solid foundation and protect the equity within your business by having a complete defensive strategy in place, which necessarily entails an MSA tailored to your business.

Looking for other leadership-focused MSP articles?

5 Reasons Why Top Engineers Quit MSPs (and How to Keep Them)

MSP Insider: How to Establish Close Relations with Microsoft

Top 6 Most Important IT Certifications for Your Engineers

The post How to Create Your First Master Services Agreement appeared first on Altaro DOJO | MSP.

Hello everyone! Today we’re talking about a subject that has garnered many an article and many a discussion over the last several years. That is the questions of whether Hyper-V or VMware is better for your MSP toolbox. Many of you may already have a winner in mind, and that’s fine, I only ask that you keep an open mind. Additionally, you should note that I write this article with the assumption that in both cases you would have technicians that are fully trained and understand each product. It wouldn’t be a fair comparison if you compared a veteran Hyper-V engineer’s deployment vs a novice VMware Admin’s deployment. So, as we talk about both technologies below, engineering know-how will enter into the discussion very little.

Without further delay let’s start by looking at features!

Features

Features have become a part of the VMware vs. Hyper-V debate that has become much more difficult to cover in the past couple of years. This isn’t because one is far better than the other in this area. It’s the opposite! Feature parity between the two is basically a wash these days. For example, both have:

• Enterprise Networking.
• Hybrid Cloud Options.
• 3rd Party Integrations.
• Hyperconverged Options.
• Automation Capabilities
• Containerization Capabilities

Additionally, looking at what both vendors call configuration maximums (the largest amount of resource utilization/assignment the hypervisor/vms can handle) it’s apparent that each vendor’s maximum is so high, only the mega-corporations of the world risk running up to those limits as shown below.

Hyper-V Host Maximums for Example

VMware Host Maximums

As you can see, both options scale-out to ridiculous heights, with both having the ability to serve up just about any virtualization need your customers could come across.

If you’re interested in looking further into these config maximums you can find the Hyper-V Maximums discussed here, and the vSphere ones here.

This hasn’t settled our debate, so let’s move onto the next section Manageability

Manageability

The manageability story for this comparison is a bit murkier than the features section above. Each vendor has a different management story and a slightly different way of doing things. If I had to break it down as quickly as possible with a short answer, I would say this:

With a fully trained team, management of either product is effective for MSPs. However, vSphere is more forgiving for junior engineers and those that may not be familiar with virtualization. I say this with Hyper-V being my hypervisor of choice and due to the following:

In vSphere, you have a single pane of glass tool for managing the entire solution; the vSphere Client. You connect to the vSphere client on a stand-alone host or a vCenter instance and the management experience is largely the same. With Hyper-V, you will use one of several possible tools, including:

• Hyper-V Manager
• System Center Virtual Machine Manager
• PowerShell
• 3rd Party Management Tool
• Azure Front-End (If using Azure Stack)

While these different tools are highly effective, they are all used in different deployment types, and different scales, and it can lead to confusion and frustration for new IT Pros. That difference aside, both of these products are well suited for MSP management. Both have integrations with MSP RMM and reporting platforms, and both can be used in automation scenarios via PowerShell and PowerCLI.

Likely the determining factor here is going to be what your engineering team is comfortable with. If you’re automating as many functions as you can (and you should be) the numerous management tools for Hyper-V is likely a non-issue. So, from an MSP perspective comparing these two tools, we’re still at an even stretch after this section.

Let’s talk about pricing and cost next.

Pricing and Cost

It’s this stage of the discussion where I start to lean towards Hyper-V. From a pure engineering perspective (no talk of sales or margins involved) Hyper-V wins this section hands-down. And I would argue it’s due to one simple fact. With Windows Server licensing you are given virtualization rights to run 2 VMs with a standard edition and the ability to run unlimited VMs with datacenter edition on a licensed piece of hardware. This is regardless of the hypervisor type. This requirement is the same whether you’re running Hyper-V or vSphere, and this is where the determining factor comes from.

The vast majority of your customers are going be running Windows Server. That’s just a fact. If you want to run Windows Server on top of vSphere you still have to buy those Windows Server licenses, and guess what? That Windows Server license comes with Hyper-V and all you need to run a small to a mid-sized cluster already. So, it comes down to a simple question. Why would you pay for the extra licensing for vSphere when you already get what you need for most use-cases with the purchase of Windows Server licenses that you must buy anyway?

For a standard business (Engineering know-how aside) the answer is simple. For an MSP, a little less so. For the aspiring MSP the decision to choose vSphere over Hyper-V comes down to three extra factors. 1 of which I personally don’t like.

1. Adding in vSphere to the deal adds extra profit margin for the MSP
2. vSphere is already the defined virtualization solution in the MSPs toolbox.
3. Chosen Hybrid Cloud Option.

I will concede that all MSPs have a mandate to make money. That’s how the business continues to grow and function and everyone needs to put food on the table at the end of the day. I do, however, have an issue with selling a product (in this case vSphere) for the sole purpose of adding to my profit margin. If that’s the ONLY reason I’m choosing vSphere as an MSP, my customers should look elsewhere because it increases the cost on them for the sole goal of lining my own pocket. You’d be surprised how many times I’ve seen this.

If this describes you, I would argue that when it comes to cost specifically (all other factors aside) doing a given project with Hyper-V will allow you to come in at a lower price point. Sure not as much margin, but long-term customer trust goes a long way.

As for item 2 on the list above, it’s never too late to change your toolset. If this is the sole resistance to changing your core virtualization choice, then I would suggest putting together a proof of concept and going from there.

Item 3 is fairly simple as well. It’s no secret that Hyper-V has native integrations with Azure, and that VMware is closely aligned with AWS. If you have an affinity for one of those public clouds over the other, that may well influence your decision as well.

NOTE: Looking for info on pricing cloud services?

Is Hyper-V or VMware Better for MSPs?

So, we’ve looked at a few different things as part of this discussion, and I’ve found in my travels that these are the three most important areas for MSPs. Ready for the winner?

My answer to which one is better? Surprise! It comes down to which one fits in your company culture better. Are you a historically Microsoft-centric shop and want to use Azure? Then go with Hyper-V? Are you a fan of AWS? Then you likely want to go with VMware. Are you looking for on-prem only and want the lowest cost for your customers? Choose Hyper-V. But please, for the sake of your customers, don’t be the MSP that chooses VMware just to get a little extra margin.

Whatever choice you make, train up your engineers and integrate it into your MSP stack and your chosen solution will serve you well. Both are fantastic and mature products with large companies behind them ready to help if needed.

What do you think? Agree with my assessment? Don’t agree with it? Let me know in the comments section below!

Looking forward to your discussion!

The post Hyper-V vs. VMware – What is Best for Your MSP? appeared first on Altaro DOJO | MSP.