We spend a lot of time talking with IT consultants and Managed Service Providers (MSPs) and one thing is for certain — there is a massive movement towards expanding from break/fix services to ongoing monthly support.

The reasons are compelling and easy to understand:

• The MSP can provide more value than the traditional value added reseller (VAR) and often develops stronger relationships with the customer

• It’s easier to sell additional services and products if you are the “go-to-IT-guy”

• Best practices can be packaged and monetized across multiple clients

• Providing monthly services on a retained basis provides greater visibility into the future cash flow for the MSP and better aligns revenue with costs

• Everyone else is doing it.

It’s important to point out that there are plenty of VARs making good money by selling products like Cisco and delivering quality integration and other consulting services.

Now, so how many MSPs are there? And what is the total number of VARs? Here we have the benefit of a recent post by Joe Panettieri from MSPMentor.net.

He makes the following case:

• There are between 80,000 and 120,000 VARs/solutions providers

• Roughly 10 percent of those companies — 8,000 to 12,000 — have moved into the managed services market

• Roughly 10 percent of those aspiring and estabished MSPs — or roughly 800 to 1,200 companies — are wildly successful managed service providers.

He believes that only about 1 percent of all North American VARs are truly thriving and generating explosive growth as MSPs.

I think that it depends on how you define “thriving.” We spoke with a VAR today with 80 small and mid-sized businesses that was doing just fine. The owner is moving more of his business towards an MSP model and signed up for Paglo.

He has a few thousand nodes to manage and had been looking at the traditional enterprise software MSP vendors. He thought that the quote that he received for $12,000 to get started was outrageous. So did we. Not to mention that he would have to deploy servers everywhere.

So, if you are making the transition, we applaud you and welcome you to get started with Paglo and our Partner Impact Program.

We are happy to share the risk with you as there are no set up fees. And because the Paglo service is IT Management SaaS (aka on-demand IT Management) there is no hardware to deploy — at your client’s site or yours. And pricing starts at $1 device per month.

Give us a call as we would be happy to talk about how we are seeing other VARs make the transition to an MSP and thrive.