Q&A: Recurring revenue wins

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This article appeared in the June, 2009 issue of CRN magazine.

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Q&A: Recurring revenue wins

CRN: Remote control is a better way of supporting your customers. What do you think
Not having to go onsite to fi x basic IT issues is certainly an advantage.

Remote support allows IT service providers to identify and resolve problems remotely, by simply installing a Kaseya agent on their customers' PCs, Macs and mobile devices.

The benefits are obvious: technicians save time by not having to travel to the customer's location, resulting in a better engineer resource allocation and higher profi t margins for the business.

CRN: Do remote support tools allow me to deliver managed services
Basic remote support tools still only provide a reactive way of responding to IT problems, and service providers still operating under the break-fix business model have suffered significant pain due to the depressed economic

climate. Small to medium sized businesses view "fee for service" as a discretionary spend. As a direct result, calls to break-fix operators drop away dramatically and so does their revenue when times get tough.

From the customer's point of view, the break-fix model has the downside of recurring technical problems an cost shocks.

Managed services providers (MSPs) have a fundamentally different business model. MSPs service their  ustomers with Service Level Agreements (SLAs) that secure ongoing monthly revenue streams. Why do clients sign SLAs?

Because managed services delivers much more than just remote support. By pro-actively managing the health of machines and systems, with automated maintenance and remediation procedures, an MSP prevents IT problems from occurring in the first place.

This approach to customer service allows MSPs to dramatically improve customer satisfaction by significantly reducing downtime, and strategic CIO level consulting services are included in the fixed monthly fee. MSPs are then well positioned as the "trusted adviser" to their clients.

CRN: Why choose an integrated managed platform over a stand alone remote support tool
Remote support is the most basic functionality of any managed services platform - it's the tool required to access clients' machines and fix a problem, but it is not proactive and it is diffi cult to charge a fixed monthly fee for this type of service.

Remote support is only a fraction of the core functionality of a fully integrated MSP platform such as Kaseya. Other key features used to deliver high-value services include, audit, patch-management, automated  maintenance, network monitoring, managed anti-virus, online backup, trouble ticketing and network policy enforcement.

There are stand alone tools for all these functions, however the challenge for IT service providers

then lies in the integration of multiple pieces of infrastructure and licensing management with vendors.

CRN: What is more profitable - remote support or managed services
Remote support results in productivity and cost benefi ts, which derive directly from not having to attend to customer issues onsite.

With managed services profit margins are significantly enhanced as income is generated by charging fixed monthly fees and operating costs fall as manual tasks are now automated.

MSPs also have the unique ability to grow their businesses without having to hire additional staff.

CRN: What steps do resellers need to take to move away from a breakfix environment into selling managed services
Resellers need to develop a different mindset and rethink how they operate.

They need to immediately move away from charging on a per hour basis for services to a monthly "device-based" business model with recurring revenues.

As part of this transformation they also need to roll out an integrated managed services platform to improve their internal operating efficiency and communicate with their customers.

CRN: What's the cost of establishing managed services? What's the ROI
Resellers should look for a technology provider who doesn't lock them into a contract.

Instead they should look for software that provides them with a cost-effective monthly payment plan where you actually own the licence at the end of the payment term.

It is also important to have a licensing model that provides them with sufficient surplus capacity so they can offer prospects a free trial of their service offering with little additional cost.

It typically costs less than $10,000 to establish an MSP operation with Kaseya and return on investment is achieved within seven days in some circumstances.

CRN: How is the trend towards mobility and remote working impacting the way you deliver managed services
There's no doubt mobility and remote working have become more popular. A key implication is the agent-based solution.

Only agent-based solutions provide real-time feedback regardless of the device location.

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