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Build a Better MSP - Blog

3 min read

20% rule of vCIO pricing

By Denes Purnhauser on Jan 26, 2017

Here’s a mystery you all know all too well - pricing your stand-alone vCIO services so you’re not robbing your clients nor yourself...that trepidation when you’re putting together the proposal, or trying to ballpark a figure in a meeting. It’s always been a gamble. There’s a way to find the proper middle ground, following a simple process to help you to close more deals without risking a critical over or underestimation, of your client’s expectation or your services. Here is the formula...

We just call it a 20% rule....

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4 min read

Trending Topics in the MSP 2.0 Peer groups

By Denes Purnhauser on Feb 19, 2016

A few months ago we started sessions of real peer groups, to get people together to discuss real issues, problems and challenges we’re all facing and hopefully to come up with some individual plans that boost the accountability of process execution. From these I’ve compiled a list of topics that are front-of-mind among participants. I can report that the discussions dealt with the problems in a very forward looking manner, with creative solutions and not stuck in status-quo thinking. In my opinion these sessions are giving a unique insight into where the industry is going.

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2 min read

Teams vs individuals for IT management roles

By Denes Purnhauser on Feb 11, 2016

Baby boomers, Gen X, Millenials: the different generations in the workplace set some challenges for IT leaders and service providers as well. Who’s best suited for the vCIO role?

I came across an illuminating infographic in the last week that discusses the different strengths and weaknesses involved in these demographics.

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3 min read

Quick calculation formula for vCIO opportunities

By Denes Purnhauser on Feb 5, 2016

The other day I made some calculation with a client about vCIO services. Fortunately it is very easy to calculate your opportunity in creating a profitable and scalable vCIO service offering.

We’ve simplified things for faster calculation, but it’s good to clearly understand what’s at stake. We see three categories in which we can lose or earn money.

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7 min read

The Fall of the Era of Free IT Advice

By Denes Purnhauser on Jan 21, 2016

Many IT managed services providers (MSPs) and internet telephony service providers (ITPs) are suffering the challenges of charging for IT consultation. The IT industry has taught its customers that we sell big expensive boxed packages that come with free consultation, placing the value in the big boxes and none in the advice. There are no big expensive boxes anymore, but still the advice remains free. However a systemic shift is taking shape finally reversing this conundrum. It is about offering low-cost SaaS applications and solutions with high-grade consultation fees, placing more value in the advice rather than the tool.

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15 min read

7 Requirements for a Scalable vCIO Offering

By Denes Purnhauser on Jan 11, 2016


The MSP 2.0 model is catching fire around the world. Many MSPs have already started to design, sell and deliver vCIO services. Adding $2.000 - $4000 of vCIO monthly recurring revenue (MRR) to a current 40 seat $5000 MSP MRR is now doable but requires some preparation. We’re going to take a look at the requirements (which can be easily overlooked) of the delivery to make sure we make it profitable.
All seven requirements center around a common set of principles: realizable expectations, efficiency in execution, excellent communication, and transparency.

Let's see the requirements one by one:

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1 min read

Transform your MSP sales approach

By Denes Purnhauser on Dec 8, 2015


Branden Baker, President of Integration Technologies from Hawaii is a modern Tom Selleck. He shares a story about the transformation of his sales approach.

His team had not been able to close any MSP deals for more than a year. But he got involved in the vCIO conversation and after only a few weeks he landed his first monster six-figure deal.

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1 min read

MSP Financial Intelligence with Larry Cobrin

By Denes Purnhauser on Nov 27, 2015

Larry Cobrin, CEO/Founder of MSP CFO, has been working on a project to make financials available for IT managed services provider to make better decisions. In my first call with him I knew we needed him to talk about finances! I was fascinated by his insights about clients’ profitability trends, classifying them and taking actions for better profitability.

He shares a lot of hints and tips about different data you need to look into (which are mostly available already in your PSA) for your organization to make better decisions. If you feel you are leaving money on the table check out this interview!

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2 min read

MSP 2.0 Podcast

By Denes Purnhauser on Nov 27, 2015

We have been producing interviews with MSP Thought Leaders and with our clients for more than a year now. We started this as an ad-hoc practice to usher great MSP 2.0 insights into the community. People seem to be enjoying the free interview format without presentation, special offers and other sales tactics.

Now with over 16 interviews we’ve received a ton of feedback and the message we’re getting most often is to make the content available in a podcast format. Many people like listening to these inspiring talks during their commute, or just in the background.

So we have transferred all videos to a Podcast format and it’s available here.

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1 min read

Closing 11 Virtual CIO contracts in 3 weeks

By Denes Purnhauser on Nov 20, 2015

Greg Tanner from Denver is a maverick, no question about it. His “Technology Quarterback™” slogan has become a meme among the MSP 2.0 community. We spoke the other day and I am still speechless. He started crafting this vCIO offering back in June, piece by piece, and started selling it in early October. Since then he’s closed 11 virtual CIO contracts with over 20K MRR! In this video, Greg shares the secrets to these amazing results. Be aware, he has very strong opinions about MSP 2.0. (Even stronger than me - Haha!)

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9 min read

12 mistakes most MSPs make with their Virtual CIO services

By Denes Purnhauser on Nov 19, 2015

The Virtual CIO phenomenon is not new, yet the promises of the role have not been realized across the industry. Some mature MSPs who believe they have a functioning Virtual CIO practice, on closer inspection, still show challenges with delivery, scalability and profitability.

While we could go in depth to identify the root of these problems, instead here we'll highlight the twelve most common mistakes MSPs make with their vCIO. At the end of this article there is a questionnaire where you can measure yourself against other MSPs.

#update - We released this blog a year ago. This is an updated version covering the latest developments. It seems that the MSP 2.0 community was able to solve most of the issues during the last year. These mistakes now can be prevented. It has been a long year, for sure... :-)

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3 min read

10 ways MSPs are leaving money on the table

By Denes Purnhauser on Oct 15, 2015


Keeping up the margins for IT managed services providers is getting harder and harder. The competition is catching up and while needs of the clients keeps growing, the price still seems to be dropping - and many IT companies are making a practice of leaving money on the table. Let's look at 10 things you can fix to prevent losing money every day.

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1 min read

Increase revenue with process related Virtual CIO services

By Denes Purnhauser on Oct 8, 2015

Ryan Williams is a superstar CEO of the ProcessPlan SaaS application. He really knows the MSP arena well, as he is also VP of Business Development for the MSP Nexxtep

I was intrigued to have an interview with him because of my belief that IT companies are specialists in process. Clients need process management experts, but that’s usually seen as a management role, and not a tech discipline. Ryan has changed this with his tool: ProcessPlan is awesome software that can be used for planning and managing processes. It makes the process problems tech problems, so the IT managed services providers can leverage them to sell process related Virtual CIO services to their clients.

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1 min read

Implementation of the Virtual CIO Services with Rich Anderson

By Denes Purnhauser on Sep 17, 2015


Implementing vCIO services can be a challenge. New ways of thinking, new lines of services, pricing and packaging, and service delivery all abound. Rich Anderson, CEO of Imagine IT has been working on this for a couple of months now. I asked him about his experiences, challenges, solutions and results. If you are thinking on implementing Virtual CIO services, or if you have been working on that already, let’s pick his brain. He’ a smart guy and explains everything very clearly with tons of hints and tips. Enjoy!

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6 min read

Starting vCIO projects the right way

By Denes Purnhauser on Sep 11, 2015

Many IT managed services providers see opportunities with their clients that aren’t related to the existing infrastructure. Clients are instead looking for help deciding which CRM they should use; how they should migrate their many Excel spreadsheets to a Process Management application or with something else that needs IT management expertise. You want to help them, of course; you are the trusted advisor, even a dedicated vCIO. The main question is: how do you start a project AND start charging for your project management duties from day one?

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3 min read

Leveraging the IT Quarterly Business Reviews

By Denes Purnhauser on Aug 21, 2015


Many IT managed services providers are doing some type of Quarterly Business Reviews (QBR) and most have trouble delivering it with the right cadence and voice.  It’s too technical and fails to shows business value to the executive team. Introducing QBRs poorly can backfire and land the MSP into a more technical role. Let's take a look at some cool techniques to engage clients with Quarterly Business Reviews.

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1 min read

Calculating the utilization and profitability of a vCIO

By Myles Olson on Aug 20, 2015

How many clients can a vCIO viably service, and what is the utilization rate? How much revenue does a virtual CIO need to generate? What is the W2 goal rate for a vCIO? Many questions like these need to be examined if we want to structure our vCIO services successfully. Let's use the vCIO calculation sheet to figure it out!

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1 min read

How to transition from the server room to the boardroom

By Myles Olson on Jul 29, 2015

This week's question: How do I become a virtual CIO when I'm “just a tech?”  This week Denes and Myles discuss a path to transition to the vCIO role. You may be more comfortable in the server room, but now you're needed in the boardroom.

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1 min read

Preparation for a vCIO budgeting meeting

By Denes Purnhauser on Jul 17, 2015

This week Denes talks about how to manage other vendors during the vCIO budgeting session. This small template can help you manage the discussion.

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3 min read

Defining vCIOs from around the world: Part 4 - United States

By Peter Torbagyi on Jul 17, 2015

After Canada, New Zealand, and Australia, we take a look at vCIOs in the United States.  70% of all registered Virtual CIOs operate in the USA. Because of this dominance the US vCIO trends are often difficult to separate from the international scene. When we talk about US trends, we are talking about the international trends at the same time.

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2 min read

Defining vCIOs from around the world: Part 3 - Australia

By Peter Torbagyi on Jul 10, 2015

As part of our work with companies in the process of implementing virtual CIO services we are interested in the general vCIO movement worldwide. So we’ve created a series of research discussions country by country.

Although the largest vCIO movement is resident in the U.S.A., we also observe distinct trends in other countries where the movement is under way. Having looked now at Canada and New Zealand, let's travel to Australia and see where the vCIOs reside down under.

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2 min read

Defining vCIOs from around the world: Part 2 - New Zealand

By Peter Torbagyi on Jul 2, 2015


As part of our work with companies in the process of implementing vCIO services we are interested in the general virtual CIO movement worldwide. So we’ve created a series of research discussions country by country.

Although the largest virtual CIO movement is driven by the US, we think it’s important to have a global perspective so we try to present trends of other countries where the movement is visible. After Canada, let's travel to New Zealand and see how the kiwi vCIOs live.

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1 min read

How to handle out of scope/specialty requests from clients

By Myles Olson on Jun 25, 2015



This week Denes and Myles discuss how to professionally handle client requests that don’t fall into specific projects or pre-defined services, and some that fall far outside the traditional MSP service repertoire.  What do you do with unconventional questions and requests?  Watch and find out.

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2 min read

Defining vCIOs from around the world: Part 1- Canada

By Peter Torbagyi on Jun 22, 2015

We work with a variety of companies that are implementing vCIO services, and think it’s important to have a perspective on the general vCIO movement worldwide. We have thus created a series of research country by country.

Although the largest vCIO movement is driven by the US, we are starting this series of analysis on our home soil. So let’s see how the Virtual CIO movement is doing in Canada.

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4 min read

The secret to making money for IT consultation

By Denes Purnhauser on Jun 19, 2015

We have been using a very basic management tool called the 10 Point Exercise, where the goal is to channel client issues into a defined consulting "product" rather than just having discussions pro-bono….getting people together to ask specific questions, getting everything out on the table and developing a plan. It’s easy to learn and it turns IT tech guys into business advisors in 20 minutes.  Most importantly though it let them charge for their knowledge instead of giving it away. Let's see how...

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1 min read

Escape the free-advice MSP trap once and for all

By Myles Olson on Jun 19, 2015


Have you ever been asked for IT advice with the expectation that it comes free of charge, and even takes time away from your paying work? Of course you have. The moment it’s discovered that you know about technology you become the go-to guy for reliable “free” advice.
 
Worse, this isn’t limited to friends and family. Your clients are doing it too, and you let them because you’re a kind person who’s passionate about helping people and savvy with technology, and the people asking aren’t consciously trying to steal your time. The problem is once you’ve set this precedent with your clients it becomes difficult to shed the expectation you’ll help for free.
 
You may also be needed to give advice on IT you know works and should be implemented, but aren’t the expert on. How do you charge for advice about something you can’t explain like the engineer who made it? The vCIO 10 point exercise is your solution! Find it here and take part in the video Q&A for more information.
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4 min read

Why do most professionals charge for advice while we MSPs do not?

By Denes Purnhauser on May 25, 2015

Isn't it a bit perplexing that doctors and lawyers can ask for $400 per hour for any and every consultation, but IT service providers are too shy to ask for $200 for their expert advice and often just give it for free? Why is the highest possible value MSPs give to the clients so devalued? Let's investigate this discrepancy and check out a couple quick tips for a solution. We are going to take a cue from Dentists.

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4 min read

Proactive Customer Development: Leverage your QBRs

By Denes Purnhauser on May 5, 2015

Most IT managed services providers are quite proud of how proactive they are, especially in terms of technical services like maintenance, antivirus, warranty, etc. However, if we look at their client's IT savvy, operational maturity, and  IT enablement, this is less true. Here are four easy tips to leverage Quarterly Business Reviews and implement the proactive mindset on a higher level.

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6 min read

The 6 Reasons MSPs Tend to Over-Deliver

By Denes Purnhauser on Apr 22, 2015

One of the most common laments we hear from IT managed services providers is over-delivery of too many different services. They feel they serve their clients more than needed and the services go unused by the clients. Account managers end up doing more IT consulting than they should, demands for IT consultation are unlimited, and the IT company invests time on IT projects that never start. Here we delve into the root of the problems and learn what to do about them!

Clients will start with questions like “What is the best application for this problem? Why are people not productive? How do we manage various IT related vendors?”, etc. However most IT companies do not have the right model for IT consultancy, and try to address those needs without a viable revenue model.

The result of over-delivery is diminished return on service investment. Not only do we do too much but at the same time we set unreasonable expectations with the client. We teach them that we do it for free, or that any request is covered already, and that blocks our ability to implement a profit model, if we even have one.

Let's quickly see the six causes of over-delivery and review a solution.

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5 min read

The 5 Levels of vCIO Operational Maturity

By Denes Purnhauser on Jan 30, 2015


The Operational Maturity segmentation makes a lot of sense when trying to understand where to go with vCIO services and which next possible steps to take.
It demonstrates the current maturity of services in a descriptive way, explains the differences, and provides hints and tips toward the next step.This article demonstrates how to proceed as a virtual CIO with respect to levels of operational maturity.

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2 min read

Build your MSP with the help of virtual CIO services

By Myles Olson on Jan 14, 2015

Colin Knox is a true entrepreneur in the managed services provider industry. He’s been operating a very mature and well-polished boutique managed services provider in Calgary, Canada.

He’s also been recognized by Penton Technology Group in the ‘MSP Mentor 250’ which lists the best of the best managed service provider executives, entrepreneurs, experts, coaches and community leaders.

Colin’s service philosophy involves helping people grow and to that end giving them a chance to learn and develop into virtual CIOs. His business growth focuses on high level services.

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2 min read

What is the one business skill MSP leaders can teach their clients?

By Denes Purnhauser on Dec 23, 2014

Transitioning into the role of trusted advisor can be difficult even to get started. Most MSP leaders are more comfortable discussing technology rather than business. That’s part of the reason we work in IT in the first place. But it’s time to step out of that technology comfort zone.
 
There must be a way “tech” people can engage in business conversations with non-technical prospects and clients. There is vast opportunity for MSP leaders to leverage their natural business acumen and become trusted advisors, in some specific areas.
 
One of these often overlooked areas is how to ship or deliver their products and services in a profitable way. Imagine that?! One of the most important yet overlooked aspects of a business is one that defines profitability.
 
But why is an MSP leader always better here than most of his clients?
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2 min read

Who's The Ideal vCIO Candidate?

By Denes Purnhauser on Dec 3, 2014

Typically there is a certain type of personality that is best suited to the vCIO role.

  • They have some consultative background.
  • Their “down to earth” mentality suits working with small to medium business.
  • They tend to be systematic, process-oriented thinkers.
  • They understand how to put technology solutions into a business solutions context.

Chances are you possess many if not all of these traits. But who else on your team also fits the role? The idea here we’re looking at here is nurturing and developing ideal vCIO candidates to build a hyper-successful MSP in the modern marketplace - something one can't do alone. Let’s take a look at what that will require. 

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5 min read

Trusted Advisor or Technician, Which Pays More?

By Denes Purnhauser on Nov 28, 2014

Most IT managed services providers we work with suffer a fundamental problem: the definition of who they are. The lack of a clearly defined definition of the business can be the biggest obstacle they face to success in the MSP 2.0 environment. The statement "I am a tech" needs to change to "I am a IT consultant." Unfortunately people often underrate themselves because they lack an MBA or they’re uncomfortable with so called “sales.” This limits them and their teams in engaging with more clients and prospects in a meaningful business way.

However, being a business consultant is just a role, a mode of operation, a mindset and the subject can be anything technical. Consulting is a behavior, a set of skills and tools that anybody can learn and implement. We are creating a series about being a consultant so you can harness the power and reframe how your clients see you.

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8 min read

12 mistakes most MSPs make with their vCIO services

By Denes Purnhauser on Nov 20, 2014

The virtual CIO phenomenon is not new, yet the promises of the role have not been realized across the industry. Some mature IT managed services providers who believe they have a functioning vCIO practice, on closer inspection, still show challenges with delivery, scalability and profitability.

While we could go in depth to identify the root of these problems, instead here we'll highlight the twelve most common mistakes MSPs make with their vCIO. At the end of this article there is a questionnaire where you can measure yourself against other IT companies.

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