Mo’ Clients, Mo’ Costs: Stop Being a Victim of your own Success in the IT Industry

The latest from Gartner shows that global spending in the IT industry is projected to reach $3.74 trillion this year, up 0.6% since 2018. John-David Lovelock, Gartner’s Research VP has warned that IT companies need to be prepared in case general economic uncertainty, trade wars and tariffs or global changes such as Brexit lead to another recession.

“Technology general managers and product managers should plan out product mix and operational models that will optimally position product portfolios in a downturn should one occur” he commented in a recent press release about these figures.
For many companies, this is easier said than done. If you’re offering business service solutions or IT software or hardware, it can feel impossible to scale upwards without adding more costs to your monthly outgoings. In fact, the more successful you are, the more money it’s going to cost you to keep up the momentum. Let’s look at some ways to lighten the load.

Moving to the Cloud

The growth that Gartner predict for this year is almost entirely down to the move from on-premises infrastructure to public clouds like AWS or Azure. “Cloud-first and even cloud-only, is replacing the defensive no-cloud stance that once dominated large providers in recent years.” Cloud migration is therefore an important space for MSPs to be filling. As cloud computing becomes more complex, technology like microservices and containers have businesses looking to outsource expertise and advice. Increasingly, MSPs are likely to see clients embracing DevOps or DevSecOps Agile practices, which will have SMBs looking to outsource services to providers who can quickly and seamlessly fill gaps in their operations. Even better, without the initial cost of on-premises hardware, and ongoing maintenance being handled by the cloud providers, more of your retainer should be making it to profit.

Changing your Pricing Model

Most IT service solutions charge by device, which means that if you cover an 100 person company, the costs are going to rack up pretty fast. This can stunt an MSPs growth, encouraging them to stick to smaller clients who are one- or two-man bands. Atera is known for turning this traditional pricing model on its head, making the MSP business work for even small companies starting out. Rather than charge by device, Atera charge by technician. This means that you have a transparent monthly cost for each technician, and no added fees no matter how many devices or agent you install. You can also say goodbye to onboarding fees and make sure that you’re remaining competitive in the industry by eliminating hidden costs that take a chunk out of your profits each month.

Embracing All-In-One Solutions

Avoiding the costs racking up can be difficult when your clients expect a full-service solution. Whether it’s partnerships with other vendors to fill the gaps in your own offering, buying third-party services for your clients, or adding new hardware or software solutions to your arsenal – it can get both pricey and complicated pretty fast. All-in-one should mean just that, everything you need under one roof. Integrated PSA and RMM are a good start, providing the back end technical support with the front-end customer service in one console. Complement this with Remote Access, Security, Backup, Monitoring and Billing, and you’re starting to see where we’re coming from. One solution that does everything you need = one monthly cost that doesn’t fluctuate and you can trust to offer everything your client is expecting.

Keep an Eye on Your Margins

The truth is, if you feel like your income is growing while your profits are shrinking, you aren’t alone. In fact, since 2016, revenue has risen 42%, while profit margins are down 30%. This is a frustrating reality that we’re trying to fix. By providing an all-in-one cloud-based solution with an innovative pricing model, you can keep your costs low, offer your clients streamlined and affordable services, and see the benefits of your own success reflected on your pay checks at the end of each month.