Every company needs some form of IT support and expertise. Like electricity and plumbing, IT is often a background concern until something goes wrong. But unlike utilities, IT is constantly changing and introduces the risk of instability. IT breakdowns can cause individual pain and be the source of business process failures. Additionally, having reliable IT is a significant factor in employee satisfaction.. For new employees, a smooth introduction to IT systems and responsive support can set the tone for their overall job satisfaction or frustration with the company.
After providing IT and security services to hundreds of companies for over 20 years, KalioTek has seen many management teams struggle with deciding how to fill this important role. Do they hire a small full-time IT staff or partner with a Managed Service Provider? If they choose to outsource, which provider would serve them best? Our experience has taught us that there is no one-size-fits-all model. Some companies want the lowest cost, some value industry-specific experience, and others need growth planning and specific technical expertise. Scale and presence in different geographies may be a factor. While some view an MSP as a temporary vendor relationship, others see it as a valuable long-term partnership.
There are many different kinds of MSPs to choose from. Selecting one that aligns well with your business model and requirements can make a significant difference in your experience. At KalioTek, we’ve learned that we’re not the right fit for everyone. We refer prospective customers to other providers when appropriate and needed. In this white paper, we propose decision criteria that management teams can consider when selecting the IT partner that’s best for them. We’ve found these criteria valuable in making our own assessments about which customers we’re best positioned to serve.
In our case, venture-funded technology and life sciences companies are the best fit! This focus has led us to develop specialized skills and awareness that our customers find helpful and invaluable. Other MSPs focus on different markets and have developed skills to better serve those areas. For example, a law or financial firm expecting incremental growth over the next three years would have very different requirements than a venture-funded company that must plan to triple in size and is in need of specialized support for scientists or engineers.
In our analysis below, we often refer to requirements from our specific market as examples. However, we have found that these criteria have broad applicability. These decision criteria fall into three major categories: strategic value, technical expertise, and execution model.
Experience in the customer’s specific industry is often an important criterion for selecting an MSP. A customer may not foresee all the future assistance they’ll require, but they expect better care from a partner with consistent experience working with similar companies. They’ll want to select an MPS who focuses on their market and their company’s stage of development.
Examples of expertise/experience that may be relevant are:
Some companies will value strategic leadership for the domains of IT and security and will need to choose a partner that provides this role. For example, while a venture-funded technology company may have tech-savvy staff members, they have neither the time nor the interest in building and managing IT. They want a trustworthy partner who can handle it seamlessly, allowing them to focus solely on their product. Large MSPs often provide transitory account managers as their senior-most contact. Regional generalist MSPs may offer an ongoing senior relationship but typically lack deep industry expertise. MSPs with specific industry focus have the experience to provide more in-depth value to that market.
Companies with this leadership role in house may only need execution capacity from technical performers and may choose an MSP without this strategic consulting role.
A related consideration is how intimate this strategic consultant is with your business. A person with continuous involvement will have different insights than one that drops in periodically for a check-in. In our experience, this role doesn’t need to spend a lot of time and add a lot of expense to the engagement. Their ongoing involvement is valuable. The value of this role lies in knowledge and judgment, rather than capacity.
Each industry has its own unique set of rules and regulations overseen by government agencies or industry governing bodies. Yours may be governed by HIPAA, FDA, PCI, GLBA, FINRA, SOC2 or an alphabet soup of other acronyms. These standards are always evolving, impacting what companies are required and prohibited from doing. They all depend heavily on IT, given the central importance of data privacy, integrity and availability.
Your customers will care about your compliance because you are part of their digital supply chains. Integrating compliance into every aspect of your IT infrastructure can be crucial to winning sales opportunities. Working with a knowledgeable MSP that understands your industry’s specific requirements will make a significant difference.
Your MSP’s experience with your industry’s compliance requirements can save you a lot of time and rework. They should be familiar with the specific IT-related requirements you’ll need to achieve and be capable of assisting you in maintaining it over time.
Some MSPs require customers to adopt their favored technology stack. This can make the MSP’s internal operations more efficient and profitable, while removing the burden of these decisions from their customers’ plates. For example, most providers support Microsoft technologies like Windows and Office 365, but many don’t have expertise to support Mac computers and Google Workspace. MSPs may also provide their networking equipment, endpoint security and other solutions, building the cost into their monthly fee. Adopting MSP-owned solutions can lead to a problem when separating later on (see Orphaned IT Systems below).
Some companies may welcome the adoption of their MSP’s preferred technology stack, not wanting to be involved in selecting specific technologies or solutions. Other more tech-savvy companies typically want to maintain their freedom to decide on IT and security solutions and have the MSP support their choices.
See also “Reseller or Consultant?” below.
If you separate from your MSP in the future, you’ll be faced with the immediate project of replacing any equipment and systems owned by them but implemented in your infrastructure. This can be an unexpected source of disruption and cost at an inconvenient time for the business. Being clear on this in advance will help you plan for any transitions downstream.
Companies that anticipate strong growth should have direct vendor relationships and separate the sources of technology from the support function. The MSP can be a facilitator but not a middleman.
If you anticipate needing projects to enhance and expand your IT and Security capabilities, exploring the MSPs technology skills and project model are important. Some MSPs offer only support services without providing project implementation consulting. Meaning, you would need to source project resources elsewhere. Others have project consultants who may be completely separate from their support team and unfamiliar with your business. Ideally, project consultants will already be well-acquainted with your business and IT infrastructure, maintaining strong coordination with your IT leader and support team – part of the same virtual team. This will yield more efficient projects with fewer unanticipated problems.
Some project skill sets that are frequently required:
A common complaint we often hear from prospective customers about their previous MSP is the lack of reliable responses to daily issues and requests. Everyday IT support is where the rubber meets the road. Good planning and technologies are of no use if you can’t get support when you need it.
Many MSPs offer a “best effort” approach to user support, either with no SLA or no process to monitor and correct SLA failures. They may provide fixed performer capacity only, with no other promise. This leaves your employees uncertain about response times and completion of requests. They can get stuck in their work and unable to meet their commitments until their issues are resolved.
Having a strong SLA with promised response times, from someone who can solve their problem, is a reasonable expectation. SLA metrics should be tracked and reviewed monthly. SLAs for completion are also reasonable for some predictable requests. For example, timely IT onboarding and computer preparation for new employees, including remote people, is critical and must never be missed. Likewise, offboarding terminations are extremely time-sensitive and important for regulatory compliance.
When considering the purchase of computer hardware and licensing IT/Security solutions, does it make sense to buy them through your MSP or directly from the product vendors? Most MSPs resell some products because they are the only sales channel supported by certain vendors. But for ongoing commodity purchases, such as PCs, different models can make sense for different kinds of customers.
Product Reseller Model – Companies with few technology purchases can appreciate the convenience of a single source- the MSP- for all their technology needs. They accept the products offered by the MSP and don’t mind paying a margin for this service. However, this model can limit choices and may trigger a concern about whether the products are in the company’s best interest or are just the products the MSP is representing.
Advisor/Consultant Model – Companies expecting to grow typically want to control their product sourcing in house. They know they will eventually need to manage computer assets and licenses, so they put these processes in place from the beginning. A separation of roles between the product recommender and the vendor may also be preferred. They’ll want to know that recommendations are truly based on their best interests and not the MSP’s sales agenda. MSPs with an advisory model focus on adding value as consultants. They bring their expertise to product choices while building trust that they will always prioritize the customer’s best interests.
Continuity of your IT team is crucial because your IT stability is directly tied to the stability of your IT team. When an IT performer leaves a small IT team, a significant amount of knowledge leaves with them. By offering a virtual team consisting of multiple people with different fractional roles and skills, along with mature processes and toolsets, an MSP can build institutional knowledge of your infrastructure and processes that survives any turnover. This provides a stable foundation for emerging and mid-size companies over time. Inquiring about how an MSP addresses this concern can help you evaluate the fit for your company.
Some MSPs offer onsite support and others don’t. Even if you don’t need it initially, it’s useful to know if this is an option for future needs.
Some MSPs operate only remotely, usually from a centralized location where resources are low cost. They don’t offer on-site support. This can work for stable customers with limited change, and it may cost less. One trade-off to consider is that some support tasks are much more difficult to do remotely, requiring much more time and effort from the end-user as they interact with remote support. This can be costly and frustrating for the employee. Another downside is that projects to build new IT capabilities may be much more difficult to complete remotely and could require a separate team.
Other MSPs operate regionally and can provide on-site support as a component of their services. This can take the form of dedicated individual performers who work daily at the customer site, though likely not full time. For emerging and midsize customers, this is likely a single person. Another model is to provide a virtual team where more than one performer shares the onsite responsibilities. This provides coverage for the performer’s PTO and a knowledge hedge against turnover.
Most MSPs will want you to sign a one to three-year service contract. This can work fine for stable companies, and the provider may offer a discount for longer contracts. Other MSPs offer a more flexible month-to-month contract model. We’ve found that emerging venture-funded companies prefer to maintain flexibility and not be locked into an extended contract because of their highly dynamic and unpredictable life cycles. This model places the MSP’s focus on producing value every month.
In addition to the contract term, other factors that impact the monthly fee should be flexible. You don’t want to be locked into a monthly fee that no longer fits your needs. Many MSPs have a simple per-head charge that rises or falls with the changing employee headcount. This can work well when the major cost is basic user support. However, companies with a simple IT infrastructure may be paying too much as headcount grows while those with more complex IT may be paying too little to get effective support. Separate monthly charges for IT users, infrastructure systems, and supported applications can be a more granular and accurate method of aligning with your MSP on changing needs and calculating appropriate costs.
MSPs are not all alike. Their specific market experiences have taken them in different directions, developing processes, business models, and technical expertise appropriate to their customers. Most executives responsible for selecting an MSP do so infrequently. They may lack the knowledge to ask the right questions and assign the appropriate weights to each criterion.
After providing MSP services for over 20 years to a diverse set of customers and evolving to focus on venture-funded life science and technology companies, we’ve learned that the distinctions above can help both MSPs and their prospective customers choose the right fit for a mutually beneficial partnership over time.
For more information about KalioTek services please contact us on our website, via info@kaliotek.com, or 408-550-8007.
KalioTek’s mission is to partner with venture-funded technology and life sciences organizations to provide access to a wide range of IT and security expertise in a flexible, affordable model. Since 2002 our team of IT and security professionals has served hundreds of companies in these markets. Our tech-savvy client base requires that we stay on top of IT and security technologies as they evolve and understand the solutions appropriate for emerging and mid-sized companies.