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A Critical Decision in Building a Successful Managed Services Business

How to build a managed services business?

Finding clients that match your managed service provider growth and direction is of paramount importance for its long-term success. Care should be taken in selecting each potential client and assessing them individually to ensure that their business model aligns with that of your MSP’s.

Transparency is of utmost importance here; ensure all metrics and numbers are disclosed honestly without falsifying figures to affect customer perceptions.

Here are some tactic you can adopt to build a successful managed services business.

A Critical Decision

Starting up a managed services business or transitioning from IT service provider can be very difficult, but here are a few key decisions that will have an immediate impact on its success. Successful managed service businesses focus on delivering value for clients by first understanding their needs, pain points and desired outcomes – this starts by understanding clients’ individual requirements.

Once you understand your target market, you can develop a portfolio of managed service provider that meets their needs. Additional revenue-generating services could include cloud services, data backup and recovery solutions and business continuity planning. In order to add even greater value for clients investing in systems from you, provide training on using them effectively to make the most out of their investments.

Taking Pricing decision correctly is essential. Your rates must cover costs and make a profit while not turning away potential customers who might otherwise pay you. Furthermore, stay current on technology developments so you can provide customers with more streamlined and efficient service.

Finally, it’s crucial to keep in mind that in managed service providers, reliability and consistency take precedence over flashy services. Building a business model that prioritizes these qualities will ensure continued success within your industry and earn your client’s trust and support in the long run. 

Building a Strong Foundation

Establishing a successful managed services business begins with creating an outline for its operations and documentation of procedures. This allows your team to refer back to existing procedures more easily, decreasing risks of mistakes, allowing them to focus more fully on meeting client expectations. Furthermore, building relationships with peers and industry vendors promotes a sense of community while potentially helping you negotiate discounts for clients at lower costs.

As new technology becomes available, it is vital that Managed Services Outsourcing businesses quickly implement it into their offerings to ensure clients always benefit from receiving the latest and greatest technologies that you manage for them. Doing this also prevents you from falling behind your competitors and missing potential market-share gains opportunities.

Maintain quality customer service by being responsive to customers and offering timely resolutions to any issues that may arise, in order to keep clients happy and engaged – the cornerstone of long-term business success.

Technology Stack and Tools

Acquiring the appropriate technology stack and tools is critical for running a managed services business successfully. When selecting the software that’s best suited for your company and team, be sure that its compatible with each other, or else there is a waste of time trying to make things work together which reduces productivity while increasing costs. 

First step to selecting an effective tech stack: comprehending client needs and desired outcomes. Doing this will enable you to develop a services portfolio that is both cost-effective and profitable. Once you understand client requirements, you can begin crafting strategies that set your managed services business apart from its competition.

When building a managed services business, you must be able to swiftly address customer issues or concerns. You can do this by creating an escalation protocol, creating a knowledge base, and offering customer support through multiple channels. 

Furthermore, use customer feedback as a tool for continuous service improvement while staying ahead of the competition while building and upholding an excellent reputation in your industry.

Client Relationship Management

Successful managed services companies possess a thorough knowledge of their customers’ goals and pain points, enabling them to design a service offering that truly fulfills customer requirements and surpasses expectations. It also means being able to communicate clearly and effectively with clients.

As the initial step of client relationship management, ensuring you have an appropriate team and processes in place to address client inquiries is of vital importance in maintaining positive working relationships and reducing outages or issues that could damage your reputation.

MSPs often find it beneficial to establish an internal team dedicated to client operations, with its primary responsibilities including client concerns, billing and contract issues as well as building ongoing relationships with senior executives within client organizations and providing value.

One key component of client operations is keeping up with emerging technology. New innovations can create opportunities to upsell or cross-sell services to existing customers and enhance overall customer experiences, but MSPs must ensure they find a balance between adopting innovative solutions and maintaining existing services as much as possible.

Marketing and Sales Strategies

Many small and top managed service providers operate in marketing denial. Although they recognize the necessity of investing in sales and marketing to expand, there often exists a disconnect between knowledge and action being taken.

To address this challenge, MSPs must set and document measurable goals for every aspect of their business, such as sales growth, marketing performance, delivery performance, finance management and client services management. Doing this will keep them on track while also focusing on revenue-generating activities.

As part of their business model, MSPs must establish an appropriate marketing and sales system. For instance, an MSP offering traditional managed services should integrate data analytics or cybersecurity practices to enhance upsell opportunities and generate additional recurring revenues streams. Conversely, those using solely Professional Service Automation services could add cloud migration or IT documentation services as value-added offerings in order to enhance their service offering and maximize the potential value proposition of their offering.

MSP in Sales And Marketing Processes

MSPs must establish a sales compensation plan that motivates their executives to drive sales and retain clients, such as base salary plus commission. Or they could structure it so they’re rewarded based on specific metrics like signing new clients or renewing existing contracts. MSPs could also use technology-enabled tools like PSA systems to automate the sales and marketing processes, freeing up resources for more revenue-generating activities.

MSPs should endeavor to meet with prospective clients directly as often as possible, in order to show a commitment to building trust while simultaneously identifying any red flags in their decision-making process. Furthermore, meeting face-to-face provides MSPs with an opportunity to better understand client challenges while offering solutions aligned with their goals and priorities.

Case Studies: Learning from Successful Managed Services Businesses

Managed services businesses (MSPs) provide a range of IT services to their clients, including infrastructure management, application support, and security. 

Some specific examples of successful managed services businesses:

  1. Datto: Datto is a cloud-based MSP that provides a range of IT services to small and medium-sized businesses (SMBs). The company has been growing rapidly in recent years, and it is now one of the largest MSPs in the world. Datto’s success can be attributed to its focus on SMBs, its strong relationships with vendors, and its commitment to providing excellent customer service.
  2. ConnectWise: ConnectWise is a top managed service providers of business management software for MSPs. This software helps MSPs automate tasks, track their progress, and manage their finances. 
  3. SolarWinds: SolarWinds is a provider of IT infrastructure management software. This helps MSPs monitor, manage, and troubleshoot their clients’ IT infrastructure. 

Future Trends and Adaptation

The managed services industry is constantly evolving, driven by technological advancements, changing customer demands, and emerging market trends. To stay ahead of the curve and achieve long-term success, managed services businesses (MSPs) need to adapt their strategies and embrace new opportunities. 

Key future trends and adaptation strategies for MSPs:

  1. Cloud-Native Infrastructure and Services: Cloud adoption is skyrocketing, and MSPs need to be equipped to manage and support cloud-based IT environments. This involves developing expertise in cloud platforms, such as AWS, Azure, and Google Cloud Platform, and offering cloud migration, management, and optimization services.
  2. Security as a Service (SaaS) and Cybersecurity Expertise: Cybersecurity threats are becoming increasingly sophisticated, and businesses are increasingly turning to MSPs for expert security services. MSPs should focus on developing a strong cybersecurity portfolio, offering services like vulnerability assessments, penetration testing, incident response, and managed security solutions.
  3. Artificial Intelligence (AI) and Machine Learning (ML) Integration: AI and ML are transforming IT operations, and MSPs can leverage these technologies to automate tasks, improve efficiency, and provide proactive support. 
  4. Data-Driven Insights and Analytics: Data is becoming increasingly valuable for businesses, and MSPs can provide valuable data insights and analytics to their clients. This involves collecting and analyzing data from client IT systems to identify performance bottlenecks, predict potential outages, and optimize resource utilization.


Many managed service provider companies have achieved success by following the strategies outlined above. By focusing on a niche, developing strong relationships with vendors, investing in training and development, using technology to automate tasks, and focusing on customer service, MSPs can position themselves for long-term success.

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