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5 Ways to Improve Your MSP Service Level Agreement (SLA)

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5 Ways to Improve Your MSP Service Level Agreements (SLAs)

SLAs are the foundation of your MSP business. They are essential to building strong client relationships and must be clear, reasonable and well-constructed.

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Evolution of The Managed IT Services Provider

Posted May 21, 2014by Brandon Garcin

Transforming from the “break/fix” offerings of its humble beginning to a fully-functional IT outsourcing model hasn’t happened overnight.

Since the dawn of man, civilization has relied on MSPs to provide the world with much needed IT support. Ok, so maybe MSPs haven’t been around that long, but they have been around long enough to see their fair share of change. 

In the beginning of managed IT services, providers were little more than glorified hardware and software vendors. They would spend huge sums of money developing custom tools, data centers and command/control centers to deliver services; and while they were effective in the delivery of discrete managed services, these providers required broad sales and marketing efforts to capture accounts, recoup investments and drive down costs.

The channel, which at the time was still engaged in manual break/fix professional services (something breaks, a technician is called in to
fix it), proved to be the answer to many early MSP sales and revenue challenges. Through the channel resale of their services, providers accelerated revenue generation, expanded market presence and maintained viability. One problem remained, however; the channel was, and continues to be, suited for midmarket
and SMB segments – while the price and appropriateness of managed services were best suited for a larger enterprise market.

 

The Advent of RMM Software

Fast-forward to the arrival of commercial, off-the-shelf remote monitoring and management (RMM) tools – these made it possible for small, traditional value added resellers (VARs) to build their own managed IT services infrastructure and practice, eventually creating the MSP segment that exists in the channel today.

This was conceivable because RMM applications allow VARs to deliver maintenance and emergency repair work on servers, storage devices and PCs over the Internet – freeing up valuable time and resources that were previously devoted to solving problems on-site. Additionally, the ability to sell this model on a periodic subscription basis has provided predictable revenue and profitability – something that’s become increasingly elusive in the rapidly-commoditizing world of hardware and software product sales.

While managed services driven by RMM proved to be profitable for transitioning VARs, this model did have one substantial barrier to entry: cost. Many MSPs spent small fortunes building modest service delivery platforms to support their fledgling businesses; some early providers reported spending as much as $1 million developing their infrastructure and network operations center (NOC), and these costs don’t reflect the expenses of hiring, training and supporting expert staff.

  

The Next Generation of RMM

Fortunately, the MSP model today has matured even further, largely due to the increased availability of third-party RMM and NOC offerings. These allow service providers to offload labor and budget-intensive infrastructure and tasking to a trusted, reliable and scalable partner – one that will not only maintain the infrastructure and provide support, but also independently advance technology capabilities.

Put simply, MSPs help their customers focus on their core competencies that produce revenue, while third-party providers free MSPs from cost and labor challenges – allowing them to develop more accounts, bring more devices under management, and increase utilization and revenue potential through expanded and more advanced service offerings. Even simpler; third-party RMM/NOC partnerships help MSPs grow their business without growing expenses.

 

What Does the Future Hold?

So what’s in store for the future of managed IT services? Today, the evolution of the MSP model continues – and many providers are enjoying some impressive results by not only leveraging third-party RMM and NOC tools, but by finding one trusted partner who offers a fully-integrated suite containing both.

Think of it as an MSP for the MSP; beyond benefits like expedited development and time- to-market, service providers working with such a partner have the advantage of round- the-clock expert support across multiple systems, applications and hardware, as well as having an aggregation point where a multitude of applications and systems are continually researched and monitored for updates.

Whether you’re a veteran MSP or are relatively new to the space, the benefits achievable with third-party RMM and NOC cannot be ignored.

Your relationship with an integrated third-party provider can be seamless and measured, allowing you to subscribe only to those services you need; whether it’s performing administrative tasks or resolving challenging technical problems.

The capabilities and support offered by a flexible, expert NOC – from supporting mundane tasks, developing and maintaining staff, and paying the high costs associated with technology innovation – can take the pressure off of your organization, allowing you to focus on what matters most – your clients.

 

This chapter is part of a larger eBook, The Definitive Guide to Managed IT Services
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Brandon Garcin is Continuum's Senior Content Strategist, and is responsible for the creation and execution of a variety of resources designed to win new business and support existing customer accounts. He has authored more than a dozen eBooks which have generated thousands of downloads, and has consulted with hundreds of Continuum partners to help improve their marketing and lead generation efforts through website optimization and content development. Brandon is also the host of The Weekly Byte, a video and audio series produced by Continuum that provides quick, digestible tips and best practices that MSPs can use to help their business succeed.

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