Food for Thought

Interesting times in the MSP industry. If you’re paying attention it seems that the MSP industry these days is more about the mismanaged MSP vendors than the MSP companies that make up their rapidly disgruntled client base. I had a conversation earlier today that inspired this post so I hope you enjoy it.

Hey buddy, I’ll trade you this half eaten sandwich for your MSP platform

You know we’re in hard times when the guy giving up the sandwich is getting a bad deal! How could these companies possibly be worth so little and have so few prospects that they are crumbled down and scraped down to the bare guts of the client list – and not just with one company!

The answer is ridiculously simple: They are lying.

“We believe that the best times are ahead and that this move was in the best interest of _____ and the new company some great plans for it and nothing will change.”

Then within a month later all the key personnel is gone, all the people who have formed relationships with service providers over the years are either gone or fired and the most senior guy you recognize on the roster is an MSP failure / would-be-expert-speaker working as a part time contractor?

Truth hurts. But it hurts more when it’s wrapped in deception hoping people won’t figure out the bullshit story. Yes, you can pay a MSP news site to pretend to be “checking on the status of the investment” while it’s employees move into the building and put up their sign, you can parade new management and pretend like lots of new stuff is going on but they can be as tight lipped as they want to be about what is going on but when all the management and key personnel is gone everyone can tell what’s going on.

I’ve blogged about this before, it is not a true representation of what is going on in the industry. This is just what happens with Venture Capital and investors. Investors and VC don’t care about the software, about the client or about the solution beyond the dollars and cents. They aren’t buying a solution to make your (clients) life easier, they are buying it to make it more profitable. You don’t become more profitable the more complete the solution becomes or with better reports – you become more profitable when more @#% is pushed down your throat hard enough that your wallet pops out of your pocket. That’s the reality.

It’s not that the MSPs are doomed..

It’s that the investors backing these vapor businesses are hungry for profits and they have no problem at all sending them down the meat grinder. Everyone is happy on the way up, nobody likes the splatter on the floor when things head south.

If you really want to piss off a bunch of people..

Buy an RMM company, roll it up with another solution (whatever is popular and hardware-centric, let’s say a BDR business) and give the damn thing away for free.

No catches, no requirements, just here you go “a gift from us to you, please check out all this other wonderful stuff we do”

It works. Shockey Monkey almost singlehandedly launched our cloud initiatives and got ExchangeDefender to a level I never could have afforded through traditional marketing and trade shows. And because other PSAs didn’t want to play ball, it built up an audience of thousands of MSPs, some that moved to Shockey Monkey Pro and will likely never consider a more comprehensive solution. Not part of the agenda, more a collateral damage – but the tide lifted all the other stuff we did almost simultaneously.

Here is the thing about the RMMs – many MSPs already are and many more will soon be looking for another place to go. It’s not the MSPs that got mismanaged – their vendors were. And those MSPs will need a solution they can build their business up on and not worry when it’s going to be subject of the next takeover, IPO or other cost-cutting initiative.

One of the things I love about Google is how well their services play together. But Google also has no heart when it comes to cutting even profitable things – they are quick to kill things that don’t make material change – they are the anti-Microsoft in a way, they don’t let stuff bleed. While that’s awesome from a business management perspective, if you love Google Reader, Latitude… or more closely – your RMM, backup, antispam, hosting, BDR, security, monitoring, quoting, etc tool… it’s going to sting. If you go with something smaller, you’re dealing with a tool that may not be very well integrated. If you’re going with something bigger that is a part of a bigger solution then you risk your product simply being marginalized or maintained less and less as the company cannot justify the R&D if it cannot turn up more bodies for their product.

So here are some questions for MSPs to consider:

1. Does mismanagement of the MSP vendors translate into mismanagement of the MSP? Namely, just because your vendors are struggling does it mean that you are doing less and less MSP business or that you have less competition out there because the barriers to entry are higher?

2. Should you focus on finding a new RMM platform because Rome is burning… or should you focus on documenting your business better so that when more of your vendors jump the shark replacement is less painful?

3. If you can’t answer #1 and #2, don’t worry. You can still be an MSP Coach.