Boosting fit-for-future MSPs across Africa

by Hennie Moolman, CEO of Africa Solution Distributor

Boosting fit-for-future MSPs across Africa

The days of traditional resellers are over, and MSPs need to go learn and mean to survive, says ASD

Value Added Distributor Africa Solution Distributor (ASD) has been growing networks of Value Added Resellers and – more recently – Managed Service Providers across the African continent for 15 years. Much has changed in that time, and the 2020s are set to put a great deal more pressure on VARs and MSPs, says ASD MD Hennie Moolman.

“With a background on the reseller side, we launched as a master distributor in 2005, helping resellers to grow. Initially, we had a team of five or six staff focused on supporting resellers in the Pretoria area. But we evolved with changes in the market, and now we have a resellers across 23 countries in Africa,” he says.

The company evolved its solutions suite too – starting with traditional mainframes, then moving to Windows solutions, and now distributes a portfolio of solutions including network and infrastructure monitoring, remote management, asset inventory management, automation and backup and recovery tools.

“One of the key things we do now is to help evolve resellers into MSPs,” says Moolman. “There is just no place in the market anymore for a traditional ‘break and fix’ reseller who starts every month on zero revenue.”

Times have changed, he notes, and only VARs and MSPs who can assure recurring, compound revenue will be able to thrive in future. “The market is competitive, and end customers are very demanding about getting more comprehensive SLAs for the lowest possible price. You might only have a customer for a year or two, and if you can’t keep bringing in new customers, and delivering service excellence at a very competitive price, you won’t be able to survive.”

Becoming an MSP demands significant changes within a reseller, he notes. Not only must sales, finance and marketing models change, but the entire internal operational structure has to change to support more efficient customer support.

Getting lean and mean

“MSPs have to become lean and mean – improving efficiencies and getting a better understanding of the true value of each customer,” Moolman says. This can be challenging for many MSPs, which have grown from traditional reseller roots and may have retained their traditional systems for customer management, support and billing.

“This is one of the biggest issues for many MSPs – they may have multiple solutions and applications for managing the same customers, so internally, they are not all on the same page and they cannot assess the operational costs for servicing the customer, or the value of the customer. They can take weeks to consolidate everything every month for billing purposes, and they may, in fact, be allocating too many resources to service a customer.”

“Very few MSPs know what the true value of customers is. They get invoices from a range of different suppliers, then they have to try to consolidate this data and determine how much it costs to service customers in order to invoice them. You have to be extremely well organised internally, with everything in one place, to determine your operational costs very accurately, right down to the cost per user.”

Moolman says this lack of transparency is a major stumbling block in a highly competitive environment. “Elsewhere in the world, there is a growing trend to vet customers to see if they are actually worth retaining, but in South Africa and across Africa, we tend to onboard all the customers we can, without proper oversight of the cost of servicing them.”

In addition, MSPs have to cut their operational costs to deliver on demands for more services at a lower cost. Consolidation and advanced automation are key to managing services with fewer resources, Moolman says.

Growing into the 2020s

ASD focuses heavily on supporting evolution among resellers, VARs and MSPs, and offers training on challenges they typically face, from how to price and sell managed services through to building a resilient business and training sales staff on solution selling.

Business resilience in this market depends on careful focus on viable markets and highly efficient operations. “If you have SLAs to manage the customer’s key infrastructure and network, it’s a lot harder for the customer to replace you than if you’re just dropping boxes,” Moolman notes. Using automation to improve efficiency helps reduce the costs of delivering services, and thanks to cloud-based platforms, expertise can now be pulled in from anywhere in the world, and manage customer infrastructure remotely, Moolman adds.

On top of improved operational models, sales and marketing are key to success: “To become a successful MSP, you have to take on the role of a trusted advisor. It’s not so much about what technology you’re offering, but whether you can provide the right solution to a pain point, at the right price,” says Moolman. “And your sales teams have to support this by moving from selling products to selling solutions.”

ASD sees scope for ongoing growth across Africa into the2020s, on the back of evolved MSPs with improved operational models. “I don’t think there’s a major growth in the number of end-users, so MSPs seriously need to go leaner and broaden their services and solutions. And ASD is enabling that,” he says.