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4 Tips to Increase Your MSP's Profit Margins

Posted October 17, 2013by Lauren Peyton

Manage Your MSP's Profit Margins

More and more small- and mid-sized IT businesses, with constrained budgets and limited internal expertise, are outsourcing their IT management work to MSPs. Although an increase in market size means more revenue for MSPs, it also means tougher competition in pricing.



However, despite increasing competition and unfavorable market conditions, some MSPs have managed to increase their profit margins and expand their businesses. Below are some tips that can help you increase your bottom line.  

1.  Opt for Infrastructure as a Service (IaaS)
IaaS represents one of the fastest growing markets in cloud-service, and offers important cost benefits to boot. One of the easiest ways to do this is to utilize infrastructure from different IaaS vendors available today. Cloud hosting services can also help you with specific issues, such as dynamic scaling, on-demand infrastructure capacity, metering and cost.

2.  Embrace Automation
Automation can help you work more efficiently than ever, allowing you to offer your customers lower prices without sacrificing quality. Numerous integrated software products exist, such as project and document collaboration, reporting functions, lead and pipeline management, and billing and analytics functions that offer visibility into key metrics. 

3.  Create Value-Added Service Packages
Today, most customers are looking for IT managed services providers who offer a variety of services, ranging from desktop to anti-virus and patch management. A high number of business owners consider outsourcing a number of elements, from remote monitoring to various cloud tasks, such as hosted emails and cloud storage. By diversifying, you can grow both your client base and your bottom line.

4.  Consolidate Your Management
Although profitability is one of the key goals of any organization, reliability is what really makes a business successful. To develop a business your clients can trust, your departments should work together as a team, forming a single entity that provides customers exactly what it promises. Choosing the right vendors determines your success as IT managed service provider.  


All these key points are ready to help MSPs increase their profit margins and become successful in this industry sector.


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