MSP best practices. How to sfaff your MSP with the right type and quantity of technicians for maximum growth and profitability. Examples of several core KPIs used by best in class MSPs. Presented by Kaseya and Redmond Channel Pro magazine. November 2012.
Hyperautomation and AI/ML: A Strategy for Digital Transformation Success.pdf
MSP Best Practice | Staffing for Growth and Core KPIs to Use
1. Staffing MSPs for Growth
Presented by Redmond Channel Partner Magazine
Sponsored by Kaseya
Nov. 6, 2012
2. Participants
Scott Bekker, editor in chief, Redmond
Channel Partner
David Castro, director, marketing, Kaseya
Partners & Service Providers
Howard M. Cohen, columnist, Redmond
Channel Partner, consultant & former MSP
3. Agenda
Rules of Thumb for MSPs – Scott Bekker
Metrics from 12,000 Partners – David Castro
Panel Discussion – Howard Cohen, David
Castro and Scott Bekker
Audience Q&A
4. Rules of Thumb: Big Picture
Central Insight for MSP profitability:
Dedicate the fewest possible hours to support
the most possible recurring revenue contracts.
How do you staff MSP growth? Slowly and
thoughtfully
5. Founding Employees
The Professor (technical genius)
Thurston Howell III (numbers person)
Movie Star (charismatic salesperson)
6. Technical Employees
Customer service people (entry level)
Highly sophisticated engineers
Remote management tools specialists
Emerging: SLA management experts
7. Business to Technical Headcount
Two sales paths for MSPs
Sell through solution providers
Sell to end customers
8. Sell Through Solution Providers
Reduces need for headcount on the business
side
Can be a great way to scale quickly
Must strenuously avoid appearance of
potential channel conflict to succeed
9. Sell to End Customers
Need more marketing and sales employees
right away
Business to technical employee ratio will be
higher
10. When to Think about M&A?
1) Need capital for new hires
2) Need capital to expand into new geographical
markets
3) Need capital to expand into new business
practices
4) Owners’ energy level
11. Endgame: Importance of Growth
When selling an MSP business one metric
matters most. Is it?
Technology and equipment
Employees
Accounts
Recurring revenue contracts
12. About Kaseya
• Enterprise-class IT systems
management for everybody
• Key Facts
– Founded 2000 & privately held, no
debt, no external capital requirements
• Consistent, profitable revenue growth
– 33 offices worldwide in 23 countries
with 450+ employees
• 12,000+ customers
• Millions of assets managed
– 6 patents issued for IT service delivery
processes & remote IT management
processes
• 37 patents pending
– Common Criteria (EAL2+) certified and
FIPS 140-2 security compliant
– ITIL v2 and v3 compatible
14. Service Level KPI: 58% of Kaseya MSPs Improved IT Asset Uptime
by 10 to 20% or More
Less than 5%, 20% More than 20%, 21%
Between 5% and
9%, 22%
Between 10% and
20%, 37%
Source: Survey of 1,098 Kaseya Customers
15. Profitability KPI: 60% of Kaseya MSPs Improved Technician Efficiency by
More than 100% but Only 25% Use Cost Basis in Their Pricing Strategy
IT Asset Management Efficiency Improvement How Pricing Strategy Determined
(per Technician)
Value Based,
More than 15%
300%, 21% CEO, 33%
Less than
100%, 40% Cost Based,
25%
By 200%, 17%
Price Match,
By 100%, 22% 27%
Source: Survey of 823 Kaseya Customers
16. Services Mix KPI: The EARNINGS Generated from Managed Services
And Project Work or Resales Are Quite Different
• MSPs are more profitable than VARs
– MSP typical gross margin is 50-80%
– VAR is 5-10%
• Pure-play MSPs are more profitable than mixed-model MSPs
– Pure play MSP average gross margin is 75%
– Mixed MSP is 55%
• T&M work is 24%
• Project work is 44%
• VAR resale is 8%
Source: Survey of 311 Kaseya Customers
17. Firm Valuation KPI: MSPs are 3x to 10x More Valuable Than
Traditional VARs
KPI / Status Break Fix Reactive Proactive Managed
Average Varies $100/hr $200 to $80/PC
Deal Size $3,000 $275/server
Gross Profit <10% 50% 70% >75%
<50%/tech 50%/tech 70%/tech 90%/tech
Utilization
< 0.2 0.3 1.25 > 2.0
Firm Valuation
Source: Survey of 148 Kaseya Customers (who merged or acquired others), SCORE Assn. (2011), and Service-Leadership Inc. (2011)
18. Panelists
Scott Bekker, editor in chief, Redmond
Channel Partner
David Castro, director, marketing, Kaseya
Partners & Service Providers
Howard M. Cohen, columnist, Redmond
Channel Partner, consultant & former MSP
19. Audience Questions?
More Information from Kaseya:
For a free live product demo
www.kaseya.com/mspdemo
For a free trial
www.kaseya.com/trynow
To speak with us
www.kaseya.com/contactme
/KaseyaFan /company/kaseya @kaseyacorp community.kaseya.com