Article | May 21, 2019

How MSPs Can Build Recurring Revenue

Source: Datto Inc.

By Chris Brunau, Datto


MSP leaders often spent a good part of their careers working as a VAR and in the systems integration business, where revenue often comes in large but sporadic doses. Transitioning to a recurring-revenue MSP model can be tough for these people since monthly services income can feel more like a trickle than a fire hose—and it can create pretty painful cash-flow challenges.

But the market is changing. SaaS and other cloud services offer customers a low-cost approach to technology implementation. So it’s important for MSPs to capitalize on this trend, rather than fighting it. Here are some tips for making the recurring revenue model work:

  • Re-Think All IT as a Service: Customers don’t want to get bogged down in the ownership of servers, networks, disk arrays, databases, software, websites, authentication systems, or even end-user devices. Instead, they want to gain specific business capabilities that incidentally require these underlying components. So figure out ways you can provide customers with capabilities on a pay-to-play basis. Data, application logic, and actionable analytics are ultimately what make the world go around—not ownership of CPUs or flash drives.