Continuum CEO Michael George has a simple three-part message for MSPs: (1) Pick your business model, (2) go deep with your MSP platform provider, and (3) move fast. That concise guidance emerged during a ChannelE2E interview with George shortly after Thoma Bravo confirmed the ConnectWise acquisition earlier this month.
But what exactly does that advice mean? Here's the blow-by-blow:
1. Pick Your Business Model: Here, MSPs must decide whether to (A) run their software & monitoring platforms in-house or (B) outsource such platforms to a trusted partner. Naturally, George prefers option B -- since Continuum offers outsourced services that blanket RMM (remote monitoring and management), BDR (backup & disaster recovery), NOC (network operations center) and SOC (security operations center) services, among other areas of expertise.
2. Go Deep With Your MSP Platform Provider: Here, George is calling on MSPs to consume as many services as possible from their software providers. Sort of like promoting Microsoft Exchange instead of the entire Microsoft 365 cloud suite, MSPs that offer only one product or service to end-customers are leaving cross-sell and upsell opportunities on the table. Also, MSPs that frequently switch from one platform provider to another typically underestimate the hassle, cost and time required for such moves, he asserts.
3. Move Fast: Here, George points to major office equipment companies that are moving into the MSP market. During the Continuum Navigate 2018 conference last fall, for instance, he mentioned Sharp Business Systems as an office equipment veteran that has been acquiring MSPs and grabbing regional market share. Slow-footed MSPs won't be able to keep up, he asserts.
Sharp's Business Expansion: George may have a point. Sharp Business Systems (SBS) now has 15 local SBS branches in 56 locations across the country. The company's latest acquisition involved Saratoga Technologies -- which has reach across Knoxville, Johnson City and Chattanooga, Tennessee, and in Abingdon, Virginia. Only an integrated, outsourced IT services business platform can support such fast expansion, George asserts.
Continuum itself is doubling down on the office equipment partner segment. The company recently hired Xerox and Ricoh veteran John Schweizer as its first VP of office technology -- a key move designed to help the office equipment (OE) market go deeper with managed services.
The Bigger Picture: MSP Economics
Read between the lines, and George is really referring to the economics of being an MSP. Keep everything in-house, he asserts, and you won't be able to compete long-term against Sharp and other fast-moving rivals that are outsourcing their platforms to Continuum.
To drive home that thesis, Continuum often points to a Service Leadership Inc. benchmark report. The report essentially says MSPs that outsource services to the vertically integrated platform provider are generally more profitable than MSPs that keep such services in-house.
What's my view? I've seen MSPs succeed leveraging in-house or outsourced technology platforms. But I certainly can't debate George on all three of his key points. Yes indeed, choose a business model, go deep with your platform provider, and move fast.
