Tuesday, October 09, 2007

MSP's Listen Up: 5 Issues To Consider When Choosing Your Platform!

Choosing a platform is going be one of the most important decisions you'll ever make as an MSP and shouldn't be taken lightly. Much like any other Enterprise IT class of software, the MSP platform is a complex beast, with multiple layers of functionality and levels of process integration. It'll become obvious that some Vendors are more capable than others, but unfortunately there are scarce impartial resources available both on and offline to help you make this decision.
Detailing out a comprehensive guide to choosing a platform is way beyond the scope of this post, but I thought I'd quickly jot down some real issues I had to consider when we chose Kaseya to run our KitRx product – an MSP offering that specifically targets the needs of small business with less than a 50 nodes.

Issue One – Vendor Attention to Detail:

Most of the salespeople that contacted me after my initial enquiry tried in vain to explain in any convincing way, why their product was technically capable under all conditions. All, except the hatchet team from N-Able, were at least able to convince me that their product could possibly work in a perfect world, but only Justin at Kaseya took the time to show me what would happen when the shit-hit-the-fan.

Luckily for me, he had actually worked at an MSP in a past life and had a unique view into how it all worked or didn't work. The reason I single out N-Able is because after placing their first call four days before the end of their sales QTR, they (unbelievably) barely spent any time describing the features of the product. A tag team of Tom and Jerry (not their real names although I actually would have rather dealt with Tom and Jerry) then spent the next four days harassing me or anyone else they could get a hold of in the organization, in a wholly unprofessional attempt to "close" us at any cost. At one point three people left a total of seven messages in one day. I literally had to threaten a Blackwater style execution to ward them off. Anyway, just please make sure your Vendor can explain how their system functions when your customers dog chews the router to shreds. The lesson here is to provide a specific technical framework of issues for the vendor to address and a code of conduct.

Issue Two - How do I get out if I need to - without getting buried?

Although you may feel compelled to present yourself as a highly successful business owner that has more resources than Larry Page and Sergey Brin combined - DON'T 'cause (Um) you DON'T.

Most successful Enterprise software salespeople are experts at using any detail you may inadvertently provide them about your business against you. Be sure to keep any company confidential information especially the number of customers and annual revenue to yourself. The reason I bring this up is that MSP platform vendors lock you into term based sales agreement that are based upon the number of purchased licenses - used or unused. Their goal is to sell you a lot more licenses than you need by convincing you that by paying for them now - they'll be cheaper in the long term. Granted that makes sense to a point, but moving to the MSP model is fraught with unknowns and you could get completely hosed. You end up deferring large payments to a future time possibly causing a scenario in which you could be overpaying for years - a fact that will eat into your profits or even potentially put you out of business. These guys are not fucking around so be careful.

So to reiterate - Providing any ammunition to this machine gun will hurt you!

Once you have decided on the number of licenses you will need, make sure you fully understand what you're in for and project a negative scenario on how you will get out of the agreement without going broke!

Issue Three - Price:

So Sergey, you've got $20 Billion in the bank but guess what! The Bank manager seems to have lost your deposit for a half Billion or so. Therefore, notwithstanding that bustard’s direct attempt at undermining your fiscal stature, the truth remains that we all have to consider price when making any decision. One thing that never ceases to blow my gaud of my shoulders is that MSP platform Vendors will expect you to spend well in excess of your annual sales revenue for their software. They do this with a straight face especially now that they believe you hobnob with the Googles - unbelievable. Be aware that price is NOT the reason to make a purchase. Cheap is bad - value is good but I'll let you figure this out yourself.

Issue Four - Flexibility:

When you build your framework for technical resilience and make damn sure you consider key criteria - Flexibility. Software Product Management is a technical discipline created specifically for geniuses who are capable of bridging marketing and in-the-trenches know how - a dangerous combination for us folks. In the case of MSP platforms, developing a full enough feature set out of the box which can cover all the requirements for managing I.T in multiple organizations is impossible. I'm not kidding when I say this - it is impossible and dare to argue this point with me at your peril! No don't worry I'm a softy :-) Anyway, most MSP Product Managers do a great job at covering the necessary sales points when created features and releases, but only a very select few have the forethought to build in enough flexibility to make these features work outside of a perfect demo like scenario.

Case in point - Creating Monitor and Alerts Sets are highly complex and consist of understanding which specific Services and Events the system should watch for in order for it to generate an effective alert and/or an adequate response to a particular problem. You don't have to be a statistical genius to understand how many combinations are possible - many thousands of initial possibilities which will change for each individual system configuration - combining to become an unimaginable number. Therefore, to mitigate this issue the platform must have the ability to extract live information from a particular system - For example which Services are running and allow you to use an open scripting platform to architect a response. Without this you might as well buy GoToMyPC and resell it as your MSP Platform of choice. Kaseya kills it as a scripting platform but on the flip side you'd better know your shit to get the full benefit.

Issue Five - Process Integration

In all seriousness, as you grow this will become the bone of your contention unless you address it now. MSP Platforms fall short of providing proper scheduling, CRM and financial/billing integration. They do this because it's really not their job. If you are planning on staying small, keeping your processes simple make sense. But if you are considering fast growth be sure to ask about what partnering solutions your platform vendor offers which could assist you in closing the Service/Sales loop efficiently.


Anonymous said...

Well done article, as an industry supplier I had a few more thoughts worth consideration.

(Issue1) When comparing platform providers don’t let your internal geek satisfaction for “cool tools” get confused with what is necessary to manage your target market. “Bells & Whistles” can come at a heavy price and should be justified based on the competitive advantage they provide in your target marketplace.

(Issue 2&3) Consider suppliers that have a true “ Pay As You Go” plan. These suppliers are forced to perform from day one and can minimize your up front startup cost thus freeing up cash flow for revenue generating activities. If your platform provider won’t do a “ Pay As You Go”” approach try and negotiate resale rights for unused licenses (remember anything is negotiable). As more suppliers offer “ Pay As You Go” or Subscription pricing models the software sellers will be forced into more flexible pricing and license arrangements

(Issue 5) Make sure you understand your MSP Platform's roadmap so you can anticipate future process needs. Also make sure your MSP Platform's roadmap addresses ways for you to both reduce operational costs AND generate new managed services revenues.