MSP State of the Union 2012 | Global Pricing Benchmark Survey and Results


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Global pricing survey and results. How does your MSP pricing model compare with your peers around the world? Presented with MSP University. Nov 2012.

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MSP State of the Union 2012 | Global Pricing Benchmark Survey and Results

  1. 1. How Does Your MSP Pricing Model Compare With Your Peers? State of the Union [2012] 10 Observations from an Industry Leader Kaseya [David Castro]
  2. 2. Erick Simpson Erick SimpsonVice President & CIO, SPC International Vice President & CIOMr. Simpson is a recognized IT and Managed Services SPC InternationalAuthor, Speaker and Trainer, and contributor to www.spc-intl.comnumerous industry publications and events. Author of"The Guide to a Successful Managed Services Practice",the definitive book on Managed Services, and the follow- • Over 20 years experience in the ITups in MSP University’s Managed Services Series “The industryBest I.T. Sales & Marketing BOOK EVER!” and “The Best • Microsoft MCP, SBSCI.T. Service Delivery BOOK EVER!”, as well as his newestbook “The Best NOC and Service Desk Operations BOOK • Author, Speaker and TrainerEVER!”, Erick has also co-authored the HTG publication“Peer Power – Powerful Ideas for Partners from Peers”. • Built Call Centers and Service Desks forEricks prior experience includes overseeing the design, Fortune 1000 Organizationsdevelopment and implementation of Enterprise-levelHelp Desks and Call Centers for Fortune 1000organizations.
  3. 3. David Castro David CastroDirector, Partner and Service Provider MarketingKaseya Director, Partner and Service ProviderMr. Castro drives the Kaseya partner and service Marketing, Kaseyaprovider go-to-market strategy and leads all marketing www.Kaseya.comfunctions, including market analysis, marketingcommunications, demand generation, and customer • More than 15 years channel experiencerelationship management. He has more than 15 years ofsoftware, hardware, and services management • High-tech veteran of Tech Data, Skywayexperience in various commercial markets, including Software and Redvector.comfinance, healthcare, education, and government. He is a • Kaseya 3 yearshigh-tech veteran of Tech Data, Skyway Software, and a former management consultant atArthur Andersen and Blasland, Bouck & Lee. Castrograduated from The Wharton School at the University ofPennsylvania with a M.B.A. in Finance and InformationManagement.
  4. 4. About Kaseya• Enterprise-class IT systems management for everybody• Founded 2000 & privately held, no debt, no external capital requirements – Consistent, profitable revenue growth• 33 offices worldwide in 23 countries with 450+ employees – 12,000+ customers – Millions of assets managed• 6 patents issued for IT service delivery processes & remote IT management processes – 37 patents pending• Common Criteria (EAL2+) certified and FIPS 140-2 security compliant• ITIL v2 and v3 compatible
  5. 5. Why MSPs Choose Kaseya• A single Kaseya user can proactively manage 1,000s of automated IT systems and network tasks in the same amount of time required by a team of technicians using other techniques• It’s the industry’s only patented single-server-single-agent architecture; MSPs get enterprise-class capability that is easy to use and easy to afford• With 60+% of top MSPs worldwide using Kaseya, they get access to the most robust community available• And with so many ISVs plugging in to Kaseya via a seamless integration process, they get an easy way to leverage their existing strategic technology partnerships
  6. 6. Our 10 Core Observations on MSP Pricing in 2012
  7. 7. The survey & methodology• Annual survey of worldwide user base (Q4 2012)• Sample size 3,500• Maximum response rate 22%• Responses from 29 countries• Prices converted to $USD at FX rates as of 11/14/12• MSP users with 10 to 30,000 devices under management• MSP users/demographics include – Break-fix, monitoring only, pure-play MSP, and power-user MSP – Owners, managers, administrators, technicians• Simple statistical analysis (median and 1s)
  8. 8. Observation 1:Most MSPs evolve beyond break-fix, yet still use suboptimal pricing strategy Service Offering Mix How Pricing Strategy (weighted by response) Determined Break Fix, Value 14% Based, 15% CEO, 33% Cost Based, 25% Managed Price Services, Match, 86% 27%Source: Survey of 758 Kaseya Customers
  9. 9. Observation 2:The predominant pricing model is – still – bundled services Other, 1% Value Based, 15% Per Device, 31% Tiered/Bundled, 53%Source: Survey of 611 Kaseya Customers
  10. 10. Observation 3:Geography still drives block hour prices and per-device prices Per Block Hour Per Desktop Per Server Per Mobile Low $24 $27 $103 $10 Median 89 52 167 16 High 121 86 255 25 Variance (1σ) 14 6 39 3Source: Survey of 473 Kaseya Customers
  11. 11. Observation 4:The average monthly contract for 67% of global MSPs is $1,001 to $2,500 $2501 to $5000, 9% More than $5000, 12% Less than $1000, 12% $1001 to $2500, 67%Source: Survey of 401 Kaseya Customers
  12. 12. Observation 5:Two out of three MSPs derive more than 50% of sales via managed services Less than 25%, 11% More than 75%, 31% 25% to 50%, 22% 51% to 75%, 36%Source: Survey of 454 Kaseya Customers
  13. 13. Observation 6:Specialty services still are only offered – and delivered – by a few MSPs Responses Advanced monitoring / data availability services 11% Advanced security / threat protection services 19% Advanced backup / business continuity services 18% Advanced asset management / product lifecycle services 4% Advanced mobile management / worker mobility services 8% Vertical industry services or compliance services 10%Source: Survey of 302 Kaseya Customers
  14. 14. Observation 7:World class MSPs outperform their peers across most dimensions • Revenue growth rate is 1.5 to 2x higher • Service delivery quality score is 1 to 2 points better – Measured on simple satisfaction scale of 1 to 10 • Client retention rate is 10 to 25 points higher • And…Source: Survey of 311 Kaseya Customers
  15. 15. Observation 8:World class MSPs are significantly more valuable than their peers Gross Profit Peer World-Class 1st Quartile Managed Service Block HourSource: Survey of 418 Kaseya Customers
  16. 16. Observation 9:Four out of 5 MSPs are holding firm on pricing – or increasing prices – in 2013 Price decrease, 20% Price increase, 25% No price change, 55%Source: Survey of 633 Kaseya Customers
  17. 17. Observation 10:In conclusion, there is PLENTY of global opportunity STILL out there • Value based pricing delivers higher gross profits for the firm • Specialized services provide new revenue for the firm • Client centric services – priced according to client value perceptions - ensure higher service delivery quality and higher client retention • Better client retention and higher firm profits increase employee morale and decrease technician turnover
  18. 18. Get Started With Kaseya!• For a free live product demo• For a free trial Get your “pre-release” 2012• To speak with us report via email: Respond within 24 hours Include “2012 MSP Survey” in the subject line/KaseyaFan /company/kaseya @kaseyacorp