Q: Our MSP has always focused on small businesses in the area. As we continue to grow as a company, we’re looking to cast a wider net and move into the midsized-business market. How can we successfully make this transition, and what are some things we should consider beforehand?
Making the transition from small businesses to medium-sized businesses can be difficult if you don’t have enough resources to dedicate to the account. However, there is a tremendous opportunity for MSPs to step into this space.
With limited technical talent available in the market, more midsized businesses are looking to outsource their IT department to MSPs and reduce their in-house IT infrastructure. In Deloitte’s 2016 Survey of Middle Market Companies, the data shows that midsized businesses are no longer playing catch up with technology solutions. Instead, they’re looking for solutions that can save them time and strengthen their business overall.
To find out what solutions mid-sized businesses are looking for and for advice on how to position your MSP more effectively, we spoke to Richard Rimmer. Richard is the EMEA Marketing Manager at Intronis MSP Solutions, and he has recognized the IT service provider gap in the midsized marketplace—and the tremendous opportunity this creates.
Where the opportunity is
Truth is, there’s a gap in the managed service market. Yes, there are MSPs out there that focus solely on the midsized market, but there aren’t enough. Most IT providers focus more on small businesses instead. By definition, a midsize business annually makes more than $50 million but less than a billion dollars—giving them more wiggle room when it comes to their IT budgets. Successfully transitioning into this space can pose a challenge initially when you’re scaling your efforts, but successfully doing so can help take your business to the next level.
To really position your IT business for success, it’s essential to know how the midsized market views technology. One great resource is Deloitte’s annual Middle Market Survey, which dives into new technology trends and focuses on midsized companies. One interesting finding from the August 2016 survey is that 83 percent of respondents devote at least 40 percent of their IT budgets to implementation of new time-saving solutions, rather than spending money on maintenance of their current systems.
Where do your IT services fall when it comes to implementing new time-saving solutions? Are you constantly working on upkeep and maintenance for clients, or are you helping them with projects like cloud integration and adoption? According to the survey, the biggest differentiator in the middle market is dependent on technology and the productivity gains businesses can make by implementing that technology. So, CIOs and CEOs are really looking for an MSP that can help them not only with day-to-day operations, but with making a strategic investment in the solutions they’re implementing.
Basic technology needs for small businesses and medium-sized businesses are essentially the same. Backup and security are two relevant themes across both categories. The top three data privacy and security concerns in the midsized market according to the Deloitte study are phishing (48.6 percent), employee-introduced risk (46.8 percent), and migration to the cloud (41.6 percent). You’re probably seeing a similar trend amongst your smaller clients as well.
One interesting finding from the Deloitte study was that 58 percent of companies are encrypting their sensitive information, an uptick from 44 percent the previous year. This indicates that midsized businesses are looking for robust security solutions that can help them keep sensitive data safe in case it falls into the wrong hands. Data breaches are expensive, and according to the Ponenom Institute the average cost of a breach is 3.8 million —that’s a sizable amount of money for any business to lose, no matter how big or small they are.
Challenges you may encounter
Often, when you’re selling IT services to small businesses you’re only selling to the owners. You’re targeting them and, more importantly, ensuring your messaging speaks to them. In comparison, when you’re targeting a midsized company you need to tailor your messaging to fit a broader audience. There are more people to sell to and different considerations that factor into the final decision—which can ultimately drag out the sales process a little longer.
When it comes to outsourcing IT and support for a midsized customer, you need to keep in mind that you won’t always be replacing the current IT solution. Often, they’re looking for an additional layer of support that can add value to the organization. Remember that you’re there to save them time, money, and hopefully a headache when it comes to their IT issues and day-to-day activities.
The key to winning a midsized business when it comes to IT services is convincing them you can support their technology goals and needs. When you’re having conversations with them, highlight your understanding of the business needs of the market and what the pain points they’re experiencing—and how you can help. It’s about painting that picture and getting that message right. Doing so can help you win their business and ultimately help you grow your MSP.