Lessons from the SMB IT Services market

I've recently returned to the enterprise space of the IT Services industry and thank you for the many emails I've received over the last week, both from customers and colleagues, old and new.

So after 2 years in the SMB market, full of ambitious MSPs hoping to be the next big thing, or aspiring to be different, what lessons can I leave their customers behind? Well in short, it’s tough to find the right MSP.

For most customers, it's a no brainer to get someone to look after their IT but getting the right fit can avoid years of disruption and frustration. So when choosing your MSP, consider the following:

1. Choose the right size MSP for you. This isn’t just dictated by headcount but more by the size of their other customers. What’s their target number of seats, who is their smallest and who is their largest customer? Are they servicing customers across too wide a spectrum? For instance, are they servicing end users at a 30 seat business, as well as providing just 3rd line support to a global business. These require very different delivery models; can they demonstrate how they meet the needs of both customers? What teams they deliver the services, that there is no conflict in priority? Where do you sit in that spectrum?
2. If the only person you meet during the selection process is from sales, be concerned.  Insist on meeting the people who will transition your services, who will deliver them and who will be responsible for them. If you are being pushed to sign off a deal before meeting these people then it suggests they may be lacking the experience or processes to deliver the services smoothly. And always be wary of an MSP that never says ‘No’ or can deliver anything you want to your budget.
3. Get references. It may seem obvious but don’t just ask for one or two, ask for five. A customer focused MSP will be able to produce them without trouble. Insist on site visits. Check out the reference sites; check out the MSP office and the data centre. Again, this is the right time to speak to someone other than the sales team. Test the promises.  Ask for accounts, be comfortable that the commercial model is based on recurring revenue.
4. Never, ever, bundle Managed Service costs in with any form of lease or finance agreement. If you are investing in new infrastructure, which is often the case when a SMB is seeking a new MSP partner, it is often the case that the hardware is financed. Ensure that only the hardware is financed; resist the pressure or temptation to ‘wrap up’ all your costs into one easy payment. You need to maintain the opportunity to scale up or down your Managed Service costs; this cannot be done within a lease or finance agreement. You are giving up you control of the services and should you run into service problems, you have little leverage to resolve them.
5. Check the vendors they support. If you are a HP, Dell, Cisco house, make sure they have the staff qualified to support them. Earning vendor accreditation isn’t easy but make sure you verify the vendor holds the accreditation they claim – and their staff hold the certifications. It’s not unheard of to retain certified staff that don’t actually work for the business and certainly won’t be managing your infrastructure.

Making sure you do due diligence will save you significant time and money, and in the worst case scenarios, maybe your business. It will tell you what belief, maturity and financial stability is of your MSP. Should you find any of these issues, walk away and keep looking.

There are many fantastic providers in the market, with the right beliefs, the right governance and the experience to deliver fantastic services. Sadly there are also those with poor commercial models and lacking the experience to deliver on their promises.  Take your time and choose carefully.