Managed Services `Gold Rush` Underway

The rush to offer managed services is well underway from the perspective of managed services platform reseller Do IT Smarter.

Two years after introducing its "Instant MSP" program, a franchise-like approach that offers aspiring managed services providers training, mentoring and a platform for their services for an initial fee of $1,999, Do IT Smarter has signed more than 160 new MSPs.

Some of these MSPs are VARs who are anxious to add managed services to their business model. And others are companies that are starting from scratch.

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That's how Paul Byrne, president and CEO of ReadyTech, started his business. While his company began as a break/fix-type of operation, the former CFO and director of IT at several different public companies met Do IT Smarter's vice president of sales through a networking group and recognized that his then current business model wasn't very scalable.

"When you grow enough in break/fix that hits you between the eyes, you either have way too much capacity or not enough," he said.

One of the key turning points for Byrne was getting over his personal hatred of help desks.
 
"But if I can have a help desk handling routine things and their success rate is 80 percent, those are calls I don't have to make," he said "Everybody is happier."

And that formula seems to be appealing to more and more VARs.

Do IT Smarter served 50 partners during the first year, 100 during the second, and CEO Don Begg expects that number to double again this year.

"What we can offer resellers is increased speed to market," said Begg. "With managed services we equate it to the Gold Rush days."  Everyone wants to get into the space now, he said, because the retention rate for managed service providers is so high—95 percent.

Do IT Smarter began as a Silverback partner, reselling the Silverback managed services platform to its partners. Since Silverback has been acquired by Dell, Do IT Smarter has added Level Platforms, a move that Begg said was motivated by the differences in the companies' licensing practices. Still, the vast majority of Do IT Smarter's partners use the Silverback platform, and Do IT Smarter is one of Silverback's largest partners.

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Begg said aspiring MSPs can get through the Do IT Smarter's program in as little as two weeks, but Byrne said it took him about 90 days to get the new business model up and running.

One of his favorite Do IT Smarter business tools is a Best Practices Assessment that he can take to customer sites, offering them a "quick top down gap analysis based on their IT environment. I fell in love with that," he said. Byrne estimates his closing rate using that tool is about 80 percent.

Byrne said he spends an hour or two on site with the customer, collecting information that he then turns into a deliverable for the client. Then he can propose remediation.

"The neat thing about the tool is that it's free and painless and requires no commitment from client," he said. "And by how you conduct yourself and the types of questions you ask you establish your professionalism."