Beyond Managed Services - For the Existing SMB Service Business

The Master Reseller Model for Existing Businesses
"I already have a business...why would I become a master reseller?", you might ask.
The answer is simple: Time and money. By investing in a "business-in-a-box" designed to plug into your existing business, you will save the time and expense (and heartache) or trying to build a managed IT service solution yourself.

In 2000, managed services was introduced to the small and medium-sized business (SMB) solution provider community and has since seen increasing adoption as a means to increase profitability, revenue, cashflow and ultimately business value. As easy as this statement is to make, achieving on the promises of managed services has been much more elusive.

Today, much of what has been recently discussed as new to managed services by the various vendors, consultants and now even distributors is in fact variations of the old, “Do-it-Yourself” programs that have been in practice for several years. Even the latest trend of providing better means to consume MSP technology, like software-as-a-service, basically reduces the impacts of failure, but does nothing to increase the probability of success.

A critical oversight by many small solution providers (under $2M in revenue) embarking on managed services is the realization that this represents a start-up business initiative. How many times have you heard a technician state they can build a NOC or salesperson say they can sell managed services? If it was only that easy!

First, they need to understand that the average rate of start-up business success is less then 20%, which would be a reasonable estimate of the MSP market today. Secondly the fact that the SMB market (5-100 users) is the most difficult segment to target; requiring a sophisticated business plan, particularly in light of the emerging utility service model to address technology over-spending and under-utilization by businesses today.

One new alternative for solution providers is the Master Reseller model from The Utility Company.

What are some of the key components of the Master Reseller model for managed services versus the traditional view of IT service franchises by the channel?

Branding – Critically important to the channel, the Master Reseller model provides the best of both worlds with both business brands co-existing. This is not unlike how solution providers have been traditionally associated with a key vendor’s brand.
Territory – Exclusive market with all marketing and sales activities (local and national) driven to the territory owner eliminating any channel conflict.
Complete business system – Includes complete front and back-office support for sales, marketing, administration, network operations center, helpdesk and service management with 80-90% of the service catalog delivered remotely.
Marketability – Being part of a national service organization with standardized business practices, economies of scale and brand results in the provider’s business becoming more valuable and marketable.
Practice areas – The breadth and depth of services allow solution providers to move beyond technology operations into emerging areas such as communications and business management – the “next” key areas of growth in managed services.
Vertical channels – Provides a means for other SMB service organizations, such as copier/printer dealers, telecommunications resellers, even accounting firms, to break into managed services.