With more than a decade passing since IT service companies first started offering MSP services; it comes as a bit of a shock to find that many providers still derive most of their revenue from the traditional break/fix business model. In fact, even companies referring to themselves exclusively as MSPs may be dedicating 50% or less of their business to providing managed services.
If this sounds like your business, you can take comfort knowing that you aren’t alone. Providers operating with a mix of “pay-when-it-breaks” service along with flat-fee managed service, argue that the break/fix style is still an important part of their business model. They claim that it drives cash flow while reducing business risk from clients with difficult IT environments. Certainly the large invoices generated from reactively swooping in to fix a client’s IT issue once it has escalated to a full scale crisis is an attraction that can be hard to resist.
However, this “reactive” method for stewarding clients’ IT systems has its downside. First, it pits you against your client. Your clients want fewer problems and quick resolutions. But if you only address problems once they happen, the path to resolution usually take longer and often produces more damage than if you were using preventative measures with the latest in IT management tools. Unfortunately, if you decide not to adopt the latest IT management tools, whether free ones like offered on the Comodo One platform or paid ones, you may be leaving your business vulnerable to replacement by more progressive competitors.
In addition, this approach builds a ‘feast or famine’ aspect to your business. When you are busy, it means your customers are having problems. If your customers are stable, it means your business is starving. It’s a win-lose scenario. Since your clients are aware of this conflict, your relationship with them is destined for regular conflict.
Instead, focusing all your energy to providing flat-fee managed services sets you up for a win-win relationship with your clients. Freeware IT management tools such as Comodo’s RMM tool can help you control costs as you transition legacy break/fix clients to the MSP model. It can also provide the automation functions you need to take on more clients without adding more personnel.
In addition, offering value-added services such as antivirus, endpoint security management and other network security products can help you build margins and assure your clients that you have their best interests at heart.
In summary, moving away from a break/fix business model will only serve to make your business more stable. New technologies will open new opportunities for savvy MSP’s who have learned to take advantage of them, control their costs and implement better efficiencies in their IT management practices. Adhering to the old break/fix business model surely will be the death of those that cannot or will not make the transition.