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Third-Party Maintenance Business Strategies for MSPs (Part II: Risk Assessments and Analysis)

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Third-Party Maintenance Business Strategies for MSPs (Part II: Risk Assessments and Analysis)

July 30
00:15 2020

Managed service providers (MSPs) are hyper focused on generating new sources of revenue to generate badly needed cash to survive the current economic environment. In Part 1 of this series on third-party maintenance (TPM), we painted the picture for MSPs to engage in a pandemic pivot and protect their business model “portfolio” by actively promoting TPM services and solutions (and there was also a need to protect your customer’s technology assets/portfolio by extending the useful life of technology assets in a recession).

Risk Assessments

Every week MSPs ask me how to find and secure new technology services opportunities. Assuming we’ve already established that the TPM opportunity is real, right here and right now, let’s talk business development. A long-standing trend over the past decade has been for the MSP to elevate beyond providing simple technician services and expand into adding value with business technology insights and solutions. 

TPM is prime for gaining new clients with technology assessments in the second half of 2020, starting today as a business development exercise. A TPM risk assessment has two components: physical and financial/business. The physical risk assessment is a natural act for MSPs who can use a number of popular tools to scan the network and report back inventory, upgrades, required patching and hardware warranty information. That provides the baseline for the MSP to engage in simple TPM analytics to create a report or dashboard showing the need for continuation warrant coverage via TPM.

BEST PRACTICE: Typically, the MSP would digest the information and share summary highlights with the client. However, I would discourage you from over-sharing the technical assessment information. Clients look to you to take the assessment data and create information that they can digest.

The adage that “which we can measure we can manage” is a direct hit for the MSP seeking to go and grow a new revenue source. Once you have the above analytics, you can now work side-by-side with your client and evaluate which extended warranty via the TPM model is appropriate. There are several players, and each has different distinctive attributes.

Finally, much has been written about whether your risk assessment should be provided complimentary to your potential client or should you charge for this valuable service as an MSP? This is an ongoing debate with viable arguments on both sides of this matter. I suggest you perform a simple search to read some of the analysis by thought leaders and make your own decision.

Risk Analysis

Which leads us to the decision about choosing a TPM service to engage. This is where I’d suggest that you need to think about who you partner with to secure a TPM contract. One potential concern: partnering with a TPM provider that is private equity-backed. Why? They may have direct access to your client information and there’s a possibility that, without proper terms and conditions set in the agreement, the TPM provider could take your client upon renewal or other milestone and eliminate your revenue stream.

Hedge Strategy

There is a simple answer to protect your MSP business portfolio in a TPM scenario: use reputable technology distributors that have proven to be channel friendly, have a long-running business with plenty of referrals and with whom you may already have an existing relationship. Distributors will never directly solicit or steal your client. Case closed!

Harry Brelsford is the founder of SMB Nation, an SMB technology channel community. 

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