The Utility Company has announced the addition of a new partnership level to
its Beyond Managed Services franchise program aimed at attracting existing managed
services providers to the company's business model.
The BMS franchise program offers small
and midsize businesses a turnkey business plan so they can quickly become MSPs,
delivering business services to customers across five areas:
IT, including networking,
desktops, security and storage;
business applications;
telecommunications, including
hosted VOIP (voice over IP);
copier/printer; and
Web hosting/Internet.
Currently, the program offers the BMS
Affiliate level for VARs that want to enter the MSP space, but want an
alternative to other do-it-yourself managed services platforms when migrating
their "break/fix" customers to a services contract, said Mark
Scott, president and founder of The Utility Company. The BMS
Entrepreneur level is for business owners who want to enter the MSP space with
a "business in a box" solution.
With the addition of the BMS Select
designation, Scott said the company is targeting existing MSPs that are
struggling with the business model using other "do-it-yourself" tools.
MSPs using other managed services delivery platforms like Kaseya, Level
Platforms or N-able Technologies, which Scott co-founded before launching The
Utility Company, may be able to provide a customer technical services, he said,
but they often struggle with other aspects of the MSP business.
"Taking the do-it-yourself approach means an MSP has to put all these
different business pieces of the puzzle together to be successful: help desk
software, field technician training, network management software, CRM
[customer relationship management] applications, desktop and security
management software—and that's just the technical side," Scott said. MSPs
also struggle with developing and implementing marketing programs, sales
training and new customer acquisition, he said.
BMS Select, he said, gives existing MSPs
the tools both to handle the sales and marketing challenges and to provide the
front and back office functionality MSPs need by providing 90 percent of an
MSP's services, which they then provide to their customers for a fixed fee.
"This model really frees you up to better service the customers you
have and to go out and acquire new customers," Scott said. The Utility
Company also provides joint sales and marketing support to franchisees as well
as a revenue sharing model.
For an existing MSP, it usually takes between six months and a year to
"roll into" the Utility Company's BMS
Select program, Scott said. The Utility Company first performs a revenue and
services delivery assessment to explore how the MSP is generating its revenue.
Then, it reviews several of the MSP's contracts and performs a profitability
analysis to compare current profitability with expected profitability as a BMS
Select partner, Scott said.
In the franchise model, MSPs must purchase sales territories, he said, with
a typical territory costing about $30,000 and encompassing about 2,500 small
businesses. Existing MSPs can leverage their current territories and customers
to get a "credit" toward the purchase of territories with The Utility
Company, Scott said.
If an MSP is generating $480,000 in yearly revenue before joining the
Utility Company, that MSP receives a 10 percent credit, or about $48,000,
toward the purchase of territories with the Utility Company, Scott said.
Scott said The Utility Company has 48 current franchises, and will add about
100 franchises in 2008, 40 to 50 of which will be existing MSPs that will join
as BMS Select partners. Adding a level for
existing MSPs to convert to The Utility Company's model "really helps us
boost the overall business rather than relying strictly on organic
growth," he said.
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