Why Modern MSPs Must Think and Act Like SaaS ISVs: Three Reasons


Does a modern MSP have to think like a SaaS ISV? Modern MSPs are almost never SaaS ISVs!

How does/must a SaaS ISV think?

  1. Gotta nail their value proposition, messaging and target personas and quickly! When you are selling a solution where you will get a few bucks every month in an insanely confusing and competitive market, time is not on your side. The SaaS ISV must be able to not only articulate but also educate the market on the clear value they deliver and very specifically, to whom. The better the SaaS ISV does that, the easier their ability to create a low COC (Cost of Customer Acquisition) sales model and deliver Customer Life Time Value. That’s the only way they’ll be profitable. It’s the same process with a Modern MSP that is selling cloud bundles with their added value managed services.
  1. Gotta price for high value and high margin. The old saying “we’ll make it up in volume” could not be more false today. Unless, of course you’ve built the shiniest new thing in the world, you can’t win the volume game. Your value prop must be able to support a reasonable MRR (Monthly Recurring Revenue) price, in addition to sufficient margins to support the business plan and your COC and COS (Costs of Service) delivery. Putting assumptions into a recurring revenue financial model is simple math. Again, it’s identical to a modern MSP selling cloud bundles with their added value managed services.
  1. Gotta execute on marketing and sales 2.0. Here I go again. The marketing and sales world that got you where you are today simply won’t get you where you want to be tomorrow.

The SaaS ISV needs a strong combination of inbound and extremely targeted outbound marketing and sales. Why? Very simple – the buyer is in control, and mass outbound sales efforts to anyone with a pulse won’t work. On top of that, the mass outbound model is way too costly. It’s not efficient enough and your MRR business won’t support that. – The COC is way too high. Same with a Modern MSP selling cloud bundles with their added value managed services.

Todd Hussey
Todd Hussey is a 20 year tech-startup veteran specializing in the Managed Services Provider and Cloud Solutions Provider businesses. His success includes two IPOs and five acquisitions, growing these businesses from $0-100m+ in 30+ countries. Today, he provides a cloud business readiness SaaS platform and builds content and services for cloud/MSP tech vendors to dramatically improve their channel partner business.