When to choose an IT Contractor over a Managed Service Provider (MSP)

I listened to a webinar by Nigel Moore, founder of the Tech Tribe. He says the first rule of marketing your Managed Service Provider is to only market to people who are already sold on the MSP business model. Go after the low hanging fruit, he urges; don’t waste time trying to convince someone that the IT Contractor is inferior.

I’m still trying to wrap my head around that idea. We’ve kept clients for 10 years that other companies aggressively marketed to; how is the IT Contractor model inferior?

MSPs have two catchy arguments:

1. Any business model that relies on things breaking to bill hours is a bad business model.
2. Something that is serviced regularly will have less problems and cause less downtime.

These are convincing arguments, and I instinctively wanted to change our business model. I started calling NRVPC a ‘break-fix’ shop and dreamed of scaling the company one hundred-fold. I could even start taking on clients of 1000+ users, I thought, with the powers of automation!

It was time to start rewriting some contracts. I examined one of our healthcare clients to see how the MSP business model would be able to meet their needs. We manage their phone system with call queues and ring groups, vaccine refrigerators and freezers that require Department of Health audits, security cameras, Square payment terminals, and multiple locations with key fob access. We are not just resetting passwords – we are managing multiple complicated systems that require human intellect.

What to do when the MSP model doesn’t fit

The MSP model doesn’t work for all clients, such as this one. I can’t charge a flat fee for something with so many moving parts, and there’s no way to automate most of the job requirements. I can foresee repeated discussions about what systems are covered as they add and subtract systems. They are a great client, and the work is challenging and interesting.

My recommendation to a business owner wondering if they want an MSP or an IT contractor to handle their technology services is this: If you want your business to run on a specific set of provided tools, an MSP is your best bet. However, if you have multiple systems that can’t be automated and you need help administering them, hire in-house or get an IT contractor.

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