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Every technology company should be building and selling managed service offerings – this is the foundation of financial stability (whether traditional management, SaaS, Cloud, etc. ).  It’s the equivalent of software license renewal.

If you are in sales, and your company is smart, you are being asked to sell these services.  If you are hitting the wall on this, remember, all managed services are sold like security solutions.  They are in fact, security – some form of confidentiality, integrity, or availability.  As an example, server monitoring is done to ensure uptime and response time which are availability, backups are done to ensure recovery/availability and integrity,… and the list goes on.

So stop talking about ROI, operational efficiency, or price, and start focusing on critical assets and looking for asset owners who are liable for functions that depend on the confidentiality of that data asset.  Then determine what risks exist, what level of risk is acceptable, and what managed services could be used to maintain an acceptable level of risk.  This is the key to selling managed services, and brings with it the foundation of financial stability.

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How are resellers showing an ROI on managed services deals in order to sell them?  (If you are in channels, I’d be interested in hearing what you are seeing from your partners as well).  Here are some observations along with a White Paper I have written on using assessments to accelerate sales cycles by providing justification to the buyer through risk.

WHITE PAPER: (click and download the Assessment document)

  1. Differentiation and closing the deal seems to have little bearing on the platform; Nable, Zenith, LPI, Kaseya,…some are  better than others technically, but none are great.  The differentiation seems to be in the offering and services provided locally more than the platform.  The better implementations are largely customized and target only small and mid-market opportunities.  After that it’s custom or OEM’d.
  2. Companies that try to show an ROI simply invite an audit of past service calls.  This leads to long sales cycles.
  3. The initial offering may look promising, however once the reseller’s current customer base has been exhausted, sales plateau.  New customers are needed…but hard to find.
  4. Small businesses won’t sign up for monitoring unless the seller can show some kind of justification.  Often they can not.
  5. Reporting is poor among most platforms – the client doesn’t receive much value here.  Trying to creating quarterly value is often a struggle leading to resellers putting their SE’s on site to demonstrate value.  This is done without an accurate counting of the opportunity cost, and is often the thing that makes the monthly contract unprofitable (something generally hidden in the financials.)

Personally I have found that assessments work as deal accelerators (when they focus on risk analysis) – we’ve done them in every sized account; some complementary, others for a fee.  The deal is closed when justified by demonstrating a high likelihood of loss.  What are you seeing?  I’d love to hear your comments on this and the white paper!  If it’s helpful, feel free to pass it on.

© David Stelzl, 2010

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Whether it\’s LPI, Zenith, Nable, or one of the many platforms available out there, it\’s really your technical knowhow and your ability to lower the impact and likelihood issues your client may face.  Yesterday was just one more example of total incompetence with the big players.  Heading out on a four day trip, I opened up my laptop in the airport in hopes of getting some work done between flights.  All of the sudden my wireless broadband card will not connect.

Verizon tests my connection and says everything is ok on their side and then actually takes a proactive step and gets Dell on the line (something I never expected).  Then after the usual computer troubleshooting 101 drills, the Dell tech decides we need to reinstall my entire system from the disks sent with the laptop.  That\’s right, not reinstall the driver for this wireless card, but actually rebuild the entire system.  I\’ve already told him I am sitting in the airport, but he actually asks if I have the disks and can save my data to a thumb drive!  How hard is it to beat this kind of competition?

Managed services is a misunderstood term with too many disparate definitions; at the same time, it’s an essential part of financial stability.  I was speaking with one of my coaching clients yesterday who, two years ago had zero dollars in recurring revenue, and now has about 2 million annually with a 40% margin.  Try to get that in hardware, or better yet consistently realize it in services over a year (including bench time).   

Based on excellent feedback from our March teleseminar, I have scheduled a phone conference specifically on Building and Selling managed services.  This will be geared to small and mid-sized resellers/solution providers who are serious about growing managed services in some form.  So whether you’ve already built it and just want to see sales take off, or you’ve been working on it and just don’t have the program working, this will provide specific steps to take in order to move forward.  Sign up here: http://www.stelzl.us/subscribe_teleseminar.asp – we’ll start at 11:30 East Coast time just like last week, and there will be an MP3 available a few days after the session.