Global pricing survey and results. How does your MSP pricing model compare with your peers around the world? Presented with MSP University. Nov 2012.

1. How Does Your MSP Pricing Model
Compare With Your Peers?
State of the Union [2012]
10 Observations from an Industry Leader
Kaseya [David Castro]

2. Erick Simpson Erick
Simpson
Vice President & CIO, SPC International
Vice President & CIO
Mr. Simpson is a recognized IT and Managed Services SPC International
Author, Speaker and Trainer, and contributor to www.spc-intl.com
numerous industry publications and events. Author of
"The Guide to a Successful Managed Services Practice",
the definitive book on Managed Services, and the follow- • Over 20 years experience in the IT
ups in MSP University’s Managed Services Series “The industry
Best I.T. Sales & Marketing BOOK EVER!” and “The Best
• Microsoft MCP, SBSC
I.T. Service Delivery BOOK EVER!”, as well as his newest
book “The Best NOC and Service Desk Operations BOOK • Author, Speaker and Trainer
EVER!”, Erick has also co-authored the HTG publication
“Peer Power – Powerful Ideas for Partners from Peers”.
• Built Call Centers and Service Desks for
Erick's prior experience includes overseeing the design, Fortune 1000 Organizations
development and implementation of Enterprise-level
Help Desks and Call Centers for Fortune 1000
organizations.

3. David Castro David
Castro
Director, Partner and Service Provider Marketing
Kaseya Director, Partner and
Service Provider
Mr. Castro drives the Kaseya partner and service Marketing, Kaseya
provider go-to-market strategy and leads all marketing www.Kaseya.com
functions, including market analysis, marketing
communications, demand generation, and customer • More than 15 years channel experience
relationship management. He has more than 15 years of
software, hardware, and services management
• High-tech veteran of Tech Data, Skyway
experience in various commercial markets, including Software and Redvector.com
finance, healthcare, education, and government. He is a • Kaseya 3 years
high-tech veteran of Tech Data, Skyway Software, and
RedVector.com and a former management consultant at
Arthur Andersen and Blasland, Bouck & Lee. Castro
graduated from The Wharton School at the University of
Pennsylvania with a M.B.A. in Finance and Information
Management.

4. About Kaseya
• Enterprise-class IT systems management for
everybody
• 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

5. Why MSPs Choose Kaseya
• A single Kaseya user can proactively manage 1,000s of
automated IT systems and network tasks in the same
amount of time required by a team of technicians using
other techniques
• It’s the industry’s only patented single-server-single-agent
architecture; MSPs get enterprise-class capability that is
easy to use and easy to afford
• With 60+% of top MSPs worldwide using Kaseya, they get
access to the most robust community available
• And with so many ISVs plugging in to Kaseya via a
seamless integration process, they get an easy way to
leverage their existing strategic technology partnerships

6. Our 10 Core Observations on MSP Pricing in 2012

7. The survey & methodology
• Annual survey of worldwide user base (Q4 2012)
• Sample size 3,500
• Maximum response rate 22%
• Responses from 29 countries
• Prices converted to $USD at FX rates as of 11/14/12
• MSP users with 10 to 30,000 devices under management
• MSP users/demographics include
– Break-fix, monitoring only, pure-play MSP, and power-user MSP
– Owners, managers, administrators, technicians
• Simple statistical analysis (median and 1s)

8. Observation 1:
Most MSPs evolve beyond break-fix, yet still use suboptimal pricing strategy
Service Offering Mix How Pricing Strategy
(weighted by response) Determined
Break Fix, Value
14% Based,
15%
CEO, 33%
Cost
Based,
25%
Managed
Price
Services,
Match,
86%
27%
Source: Survey of 758 Kaseya Customers

9. Observation 2:
The predominant pricing model is – still – bundled services
Other, 1%
Value Based, 15%
Per Device, 31%
Tiered/Bundled, 53%
Source: Survey of 611 Kaseya Customers

10. Observation 3:
Geography still drives block hour prices and per-device prices
Per Block Hour Per Desktop Per Server Per Mobile
Low $24 $27 $103 $10
Median 89 52 167 16
High 121 86 255 25
Variance (1σ) 14 6 39 3
Source: Survey of 473 Kaseya Customers

11. Observation 4:
The average monthly contract for 67% of global MSPs is $1,001 to $2,500
$2501 to $5000, 9%
More than $5000,
12%
Less than $1000,
12%
$1001 to $2500, 67%
Source: Survey of 401 Kaseya Customers

12. Observation 5:
Two out of three MSPs derive more than 50% of sales via managed services
Less than 25%, 11%
More than 75%, 31%
25% to 50%, 22%
51% to 75%, 36%
Source: Survey of 454 Kaseya Customers

13. Observation 6:
Specialty services still are only offered – and delivered – by a few MSPs
Responses
Advanced monitoring / data availability services 11%
Advanced security / threat protection services 19%
Advanced backup / business continuity services 18%
Advanced asset management / product lifecycle services 4%
Advanced mobile management / worker mobility services 8%
Vertical industry services or compliance services 10%
Source: Survey of 302 Kaseya Customers

14. Observation 7:
World class MSPs outperform their peers across most dimensions
• Revenue growth rate is 1.5 to 2x higher
• Service delivery quality score is 1 to 2 points better
– Measured on simple satisfaction scale of 1 to 10
• Client retention rate is 10 to 25 points higher
• And…
Source: Survey of 311 Kaseya Customers

15. Observation 8:
World class MSPs are significantly more valuable than their peers
Gross Profit
Peer World-Class 1st Quartile
Managed Service Block Hour
Source: Survey of 418 Kaseya Customers

16. Observation 9:
Four out of 5 MSPs are holding firm on pricing – or increasing prices – in 2013
Price decrease, 20%
Price increase, 25%
No price change,
55%
Source: Survey of 633 Kaseya Customers

17. Observation 10:
In conclusion, there is PLENTY of global opportunity STILL out there
• Value based pricing delivers higher gross
profits for the firm
• Specialized services provide new
revenue for the firm
• Client centric services – priced
according to client value perceptions -
ensure higher service delivery quality
and higher client retention
• Better client retention and higher firm
profits increase employee morale and
decrease technician turnover

18. Get Started With Kaseya!
• For a free live product demo
www.kaseya.com/mspdemo
• For a free trial
www.kaseya.com/trynow
Get your “pre-release” 2012
• To speak with us report via email:
www.kaseya.com/contactme david.castro@kaseya.com
Respond within 24 hours
Include “2012 MSP Survey” in
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