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MSP Marketing | June 25, 2017

MSP Marketing Tip: Don’t Let Hardware Profits Blind You from Selling Cloud Computing!

MSP BusinessDon’t Be a “Johnny-Come-Lately”

MSP marketing has become a means of utilizing hardware, not a means of disseminating it. This is done through several modern innovations. Most notably, the cloud and the Internet of Things (IoT) which are facilitated by it have reinvented the tech landscape. Today, it’s possible to do everything you can with an on-site data center, but for a fraction of the cost through an MSP. Many businesses are getting involved with this because it saves them literally thousands of dollars every year.

Costs Examined

For example, if you’re a small business owner who needs a data center, the cheapest you’re going to get that done for is around $20k annually. Here’s how that works out. Initially, you’re probably going to spend around $10k on equipment. The cheapest server array you can find will likely be more than $5k, but if you’re savvy, you can probably get one for that price. You’ll have the same, or similar, costs for a backup system. Now, included in that $10k sum will likely be shipping and other related equipment costs, like installation. Again, this is a conservative estimate, but it’s doable if the business is savvy enough. Should that be possible, at the very least, the small business will need to maintain both systems, and that means getting an IT person to do it. If that IT person is professional and full-time, it will cost at least $30k a year. If you can get an IT person to just do part-time work, only spending $1,700 a month on that individual, you’re looking at over $20k a year to keep them involved with your operation. Combined with equipment costs, that’s about $30k a year. You’re going to have costs fluctuate and you’re going to need upgrades within three to five years’ time— these things will likely average you out at around $20k a year, conservatively, even in the years you don’t purchase equipment.

Cloud Alternatives

Meanwhile, if you do cloud computing as a solution, even should it cost $1,000 a month, that’s still an annual saving of $8,000. If your MSP marketing isn’t supplying clients the ability to save that much annually, they’re going to look for an MSP that will. Cloud computing is quickly replacing internal server solutions. IoT is making it so data can be continuously gathered on a variety of little devices. That information can be used to streamline operations. This additionally saves businesses thousands— perhaps even millions, depending on their size and scope.

Switching From Hardware

If your MSP makes the majority of its money from large hardware sales, you’re about to see a substantial loss. Hardware is just too expensive today. You want to start making the cloud switch, as far as what you push is concerned. Things may be profitable now, but they won’t be very soon. The best way to get around this is to offer both. If you’re primarily selling hardware now, start offering cloud solutions and combine those with your hardware offerings. Phase the one out and replace it with the other.

MSPs that have experience with this already are going to be ahead of their competition naturally. The earlier an individual adopts the cloud, the more experienced they’ll be in purveying it, which means they’ll be able to source more and better clients. It’s all about getting involved with the cloud now, rather than after it has become status quo. You want to get in as close to the ground floor as is realistically possible. This will increase your testimonials from satisfied clients, and once you get over the cost of the switch, you’ll be able to sell cloud services cheaper than startup competition.

Consolidated Points

In summation, reasons to start offering cloud services to clients include:

• Cheaper tech utility, saving clients money
• Hardware is phasing out
• Getting in early increases your competitiveness
• The quicker you start offering cloud services, the more you’ll make from them

MSP marketing solutions are going to continue to develop, finally, and in order to build on the advances of predecessors, you’re going to need to have innovations available for clients. You can’t do much with IoT if you don’t have basic cloud services. The next technological iteration is coming.

About our Contributor

MSP businessNicholas Fortin is the President and Owner of Nexxen Technologies, which provides IT Support in West Palm Beach. With a wealth of experience in the IT Support and a very real sense of what it takes to run a successful business in Fort Lauderdale, he is the ideal person to help their clients achieve more through a more efficient use of technology.

Nicholas is well versed in the management of computer networks, IT Infrastructure and Operations Services (IOS), as well as in IT services best practices for Boca Raton, due diligence, PCI-DSS, SOX, and HIPAA compliance. Nicholas is justifiably proud of his ability to establish and maintain excellent working relationships, not only with their clients and vendors but with his co-workers too. Their 98% customer retention rate is a source of pride to everyone on the Nexxen Technologies, Inc. team too!

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