Q: I’m really worried about customers switching to Office 365. We’ve already made a huge investment in both our infrastructure and getting our techs up to speed on hosting Exchange servers. I know there is a lot of hype about Office 365, and a bunch of our customers are moving to it. However, I don’t see the benefit for my MSP to provide Office 365 to our customers. The margins seem much smaller than selling more traditional solutions. Is there something I’m missing? Are there reasons why I should offer Office 365 to my SMBs?
You’re not the only MSP that feels this way about providing Office 365 to their customers. However, because so many companies are switching to these services, you don’t want your MSP to get left behind. Providing this service will help you stay competitive, and with more and more services being offered in the cloud, this growing trend isn’t going to away anytime soon.
To answer your question and help you understand the value behind offering Office 365 to your customers, we spoke with some of your MSP peers to get their insight on what they see as positives about Office 365. We also spoke to one of Intronis MSP Solutions’ engineers, André Leblanc, and asked him how MSPs can use add-on services for Office 365 to generate more revenue.
Benefits of switching to Office 365
The specific opportunities Office 365 creates will differ slightly depending on whether you’re a large MSP, a small MSP, or a telco. For instance, if you are a telco, this could give you the opportunity to enter the email market when you might not have had the resources to do so in the past. But the overarching message is that Office 365 is becoming table stakes for managed services. Ryan Rosenkaimer from Alura Business Solutions told us: “Office 365 is a feature everyone expects. It’s just a new service that is easier to offer than the cost upfront to do it yourself.”
Plus, the ease of deployment, lower operational costs, and easier file management have helped many MSPs embrace the new cloud service. Edwin Munoz from Expert Computers said that offering Office 365 has given him more options to offer his clients and that there are “less tickets since users are on the most common version of Office.” This frees up time so you can focus on other important aspects of your business.
Office 365 has also helped some MSPs take their business further. A few of our MSPs even mentioned that a lot of prospective clients are asking about cloud services, and offering this service is a good way to get them in the door. Small businesses that want email trust Microsoft and find it’s an easy way to get full Exchange functionality for their business. Starting the initial conversation about cloud services can win an SMB’s business and give you an opportunity to build a relationship and offer them additional services down the road.
How to make more profit on Office 365 engagements
If you’re concerned about Office 365 margins, bundling it with additional services could be the solution. Providing add-ons to your Office 365 offering can not only help your SMB customers get the services and protection they need, but it can also help you grow your profit margins. We spoke to Andre Leblanc, one of our solutions engineers, and he gave us a few examples of how MSPs can increase their revenue by layering additional services on top of Office 365.
Migration from on-premise servers or hosted Exchange is one of the most difficult pieces of transitioning to Office 365. Although moving from hosted Exchange to Office 365 is a one-time thing, it is an opportunity for MSPs to make additional revenue through consulting or third-party tools.
Security and Compliance
The real opportunity for MSPs lies in the enhanced services that businesses are looking for around Office 365. Especially in this day and age when there are so many different kinds of threats, it has become imperative that businesses have reliable security measures in place. Through Microsoft you can get security, file storage, archiving, and encryption in addition to the basic Office 365 suite—but only at an enterprise-level price. You can add these services à la carte, but each one is an additional charge per service, per user each month, which can get expensive quickly. And, if you have multiple SMBs on Office 365, billing can be tricky.
This is where add-ons start to be profitable for your MSP. Your SMBs probably don’t want to pay enterprise prices for their email, but they do want that level of security. Going to a third-party vendor who has specialized bundles of security features for Office 365 can help reduce the cost, without sacrificing security or compliance. This allows you to offer your customers encryption, advanced threat detection, archiving and more, but at a fraction of the cost, which helps you make a healthy margin.
By offering Office 365 to your customers, not only will you reduce maintenance costs of updating servers, but you can also take advantage of add-ons to increase profit. Plus, the added security you can offer will be an easy sell to SMBs concerned about the growing threats of ransomware and phishing. And in the end, supporting Office 365 is just the smart choice. With more and more services moving to the cloud, you want to make sure your MSP stays competitive—and doesn’t get left behind.
Ask an MSP Expert is a weekly advice column answering common questions from MSPs and IT service providers. It covers topics ranging from pricing and selling to marketing and communications—and everything in between.