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With technology advancing at a pace faster than any organization can support, managed services are becoming commonplace and the industry is booming. Managed Service Providers (MSPs) offer ongoing outsourced support for a client, whereas professional services usually only complete a single project. Organizations are realizing that there are enormous benefits to working with MSPs, including reducing costs, minimizing staff and training, and quicker adoption of technology which helps businesses become more competitive. According to a 2016 publication from Microsoft, 69% of small and medium businesses hired at least one type of IT MSP in 2016, and MSPs see an average 45% gross profit, much higher than professional services. Being an MSP sounds great, but it is a very competitive market, so how can an MSP stand out from the crowd and be successful?
The best way to do this is through Microsoft’s endorsement of your practice to its customers.
Official endorsements from Microsoft provide a huge boost to companies and this is something I’ve witnessed first hand. And this is possible to achieve for MSPs of all sizes – but how? Unfortunately, there is no straightforward answer, as it takes time and trust to develop that relationship with Microsoft. But it is possible. This blog will give you guidelines for how to become a partner, build your credibility, get noticed, and then get referred by Microsoft. These insider tips come from the eight years that I spent at Microsoft, many of them working with MSPs, along with the two years that I spent with 5nine Software as a Microsoft Partner building cloud solutions used by MSPs. It may require patience and perseverance, but if you follow these steps and it will happen for you.
Become an Official MSP Microsoft Partner
Once you are committed to offering managed services in collaboration with Microsoft, you must become a certified partner. While you are not legally required to do this, Microsoft is unlikely to work with you or refer you without this qualification. The specific requirements will vary by the technology focus (competency) that you choose, which includes app development, cloud platform, data and analytics, business applications, mobility, and productivity. Generally, you have to pay an annual membership fee, show some existing work through case studies or professional references, and multiple members of your team must have relevant Microsoft technical certifications. To achieve Gold status, you usually also have to meet minimum thresholds in sales revenue or cloud consumption. These higher tiers offer additional benefits, such as priority in listings. Once you become an official Microsoft Partner, take advantage of their online training, programs, and other educational opportunities to enhance your partner profile, such as the Cloud Solution Provider program or Azure Expert MSP. Once you are listed on the Microsoft Partner Network website, potential customers can discover your business by browsing for local MSPs within their region.
Build your MSP Credibility to Get Noticed
Now that you’re a Microsoft Partner, you need to build your digital presence, and you should start by including the Microsoft partner badges on your website, decks, emails, and other marketing content. Show your expertise by referencing previous projects and customers, even if they were one-time professional services projects. Ask for permission from these existing clients to use their logos on your content, get a testimonial, author a case study, or even to publish a joint press release announcing the deal. Some customers, particularly those in the public sector or regulated industries, may be hesitant to publicize details about their technology stack. If that customer has a great reputation or brand which will help your business establish its credibility, consider offering them a small discount on the project for their endorsement – it will be worth it in the long run.
While these references will create some great marketing content for your business, you must still host a high-quality website. If your website isn’t modern, does not work well on mobile, has any bugs, or does not reference any prior work, you will not look like a professional IT services company. Take advantage of your staff’s downtime while they are on the bench by having them write unique technical content for your blog. This further establishes your credibility and domain expertise and helps your website with search engine optimization (SEO) to further increase your discoverability online. While many customers will find your business through the Microsoft Partner Network’s website, those that have not worked with Microsoft consultants before may not know this resource. Make sure you create an SEO-optimized website, mentioning any cities, countries, and languages which you support.
Another great way to scale up your MSP business is to make sure that you own the rights to any custom software that you develop for a client. If one customer needs you to build them a tool, service or process workflow to solve a problem, there are likely dozens of other customers facing the same challenge. By being able to repurpose and resell your software/services, you can establish yourself as the recommended MSP for that niche solution, which is one of the best ways to establish a relationship with Microsoft. For example, container services is an area that many MSPs have recently had a lot of success with it. Additionally, selling Azure services has shown to be a great way to be successful and create a closer bond with Microsoft.
Scale your MSP Business through Microsoft
Once you have a healthy business, staff, tools, services and even customized software solutions, you can maximize your revenue by taking advantage of economies of scale. Each additional customer becomes cheaper and your margins will grow. But you still need to get connected with these prospects either through a sales team or by referrals, the latter of which we will focus on.
The first place you should look for referrals is from existing customers. Offer them an incentive for recommending you to their industry peers or partners, such as a discount on their next project or even an affiliate referral fee (just avoid doing this in the public sector). However, the best referral will come from Microsoft itself, when their customers ask them for a local MSP partner.
As a global company, Microsoft has many different legal entities, usually one per country. Microsoft Corporation is the parent company which develops the software and manages the worldwide business. Each country, including the United States, has its own subsidiary which is responsible for regional marketing, business development, sales, and professional services. While Microsoft Corporation centrally manages the MSP program, you actually need to develop a relationship with the local subsidiary, as they provide the consulting support to their local customers. For any projects that the local Microsoft office cannot or does not want to support, they will refer these prospects to their preferred MSP(s). In some cases, the subsidiary may even contract the MSP and its staff as an extension of their own consulting practice. From my experience, this referral process is not democratic – usually, the same few MSPs are recommended every time. This is because the local Microsoft consultants have an existing relationship with the MSP and trust them to deliver high-quality work.
While this process may not be “fair” to new MSPs, it is possible for an organization to become favored if they can deliver great services, have credible referrals, and become a trusted expert in their niche. To get on Microsoft’s radar in your region, make sure you go to local events, especially any meetups or conferences which are organized by the subsidiary. Build a relationship within the subsidiary’s services team so you can understand their programs, goals, and weaknesses to position your practice for future opportunities. Establish your business as the region’s technology expert in your competency by writing blogs or speaking at conferences. Some of the best local content will consider the application of a technology with regards to its impact on local laws or regulations, such as how data management changed across Europe because of the General Data Protection Regulation (GDPR).
These recommendations should provide your MSP business with the guidelines to establish a relationship with Microsoft. Only after you become an official partner can you build your credibility, and then you can scale your business with Microsoft’s endorsement. Once you start contributing to Microsoft’s success, they will be willing to contribute towards your success!
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