How to become a successful Microsoft Cloud Service Provider

There’s more to running a cloud service provider (CSP) business than simply offering an excellent service. Chances are, in time, you will want to grow and scale. However, for many, this is intimidating. Where do you start? How can you create sustainable profit?

Even the most progressive CSPs face challenges; they haven’t just built a high-quality customer base out of thin air. The complexity of the CSP business model means it takes time, strategic planning, and resources to enable growth, but it’s worth doing.

The global cloud computing market size is expected to grow to US$623.3 billion by 2023. It’s never been more important to stand out from your peers. You don’t want to become stagnant while others act on the opportunity.

Alongside market growth, Microsoft CSPs and Managed Services Providers (MSPs) face new growth challenges. For example, increasing revenue in an already mature market can be an uphill climb. When services are well-defined and business relationships are longstanding, it might seem impossible to squeeze extra dollars from your customers. Secondly, building strong operational processes to match the pace of growth is a must to ensure profitability. In prospering times, it’s easy to take your eye off the bottom line until it’s too late.

If you’re a Microsoft CSP wondering why others are growing so much faster than you, you’re in luck. Here’s some insight into their strategy.

Three things successful CSPs do differently…

1. Cross and upsell services

The bulk of customer value for B2B business is obtained after the initial sale. Yes, you heard right, ‘after’. CSPs with excellent customer relationships are at an advantage. They know their clients are comfortable with the support they offer. They also know what they need to improve their IT experience. This is the starting point to CSP success.

These businesses can make a large percentage of their profits through cross and upselling value-added services. After all, the cost of upselling to current customers is lower than acquiring new business. Successful CSPs will then use the margin earned from upselling cloud services to cover their business costs and more.

Adopting this approach can help to increase your revenue. Furthermore, if you offer a steady stream of value-add to your clients, you’ll know that your business will have a consistent monthly recurring revenue (MRR.) This will help with your growth strategy as you can accurately forecast costs and expenses over a long period of time.

2. Optimize technology and systems

We regularly hear MSPs say they are overwhelmed by the number of tools they have, with many using multiple solutions to:

• Manage user environments
• Report and monitor infrastructure
• Assign licenses and subscriptions
• Control endpoint management
• Connect with external applications
• Manage spreadsheets and IT assets

Invariably, it’s an inefficient way of working. Not only does it cost MSPs’ their time, but it’s also a huge financial drain for organizations, especially as often companies don’t use their solution’s full potential.

Your tech-stack sets the pace at which your team operates. Many successful CSPs have downsized or consolidated technologies to help with their growth goals and financial outgoings. Not only will they save money, but their processes will be more efficient.

Less is more. Keep this in mind for your CSP growth plan or you could be at risk of losing business to more nimble players in the industry. When assessing costs, find one automation tool that covers all your operational and customer needs.

3. Use skilled staff for skilled work

Staffing can be a juggling act. How do you keep overheads down and create a team that can cope with increased demand and customer satisfaction?

The people you employ reflect the capabilities of your CSP business. So, you need to get it right. There are ways to increase workforce visibility and save costs at the same time.

Clever CSPs have realized that without the right managed service tools, valuable talent will waste time on everyday work. They lean on automation to manage the daily grind and get their specialists to focus on more complex client needs. With automation in play, they may not even need engineers for a five-day working week.

For example, they can save money by getting security experts do work for specific clients on a shorter working week. They can even hire contractors and part-time flexible employees to keep overheads down, and reduce labour costs by outsourcing manual work overseas

You may think you should invest in extra staff in-house to keep up with growth demands. However, this may not be the case. When looking at your talent setup, ask yourself:

• Do you have the right specialists to service your growth areas?
• Is your tech team adding value or are they too busy managing admin tasks?
• Could you upskill talent and save on onboarding costs?
• Would you consider an offshore help desk team to reduce overheads?

Automation is key to successful Microsoft CSP growth.

Many of today’s top Microsoft CSPs have left the heavy lifting to automation. They have more time to focus on growth and are well-prepared in their approach to decreasing costs and increasing revenue. These are the businesses that will likely be the ones to stand out in the future $623.3 billion market.

What are you waiting for? Jump on the growth bandwagon and start enjoying a bigger share of the pie. N‑able’s Cloud User Hub ushers in a new era of control for Microsoft CSPs, making it easier to automate the management of all of your Microsoft tenants, users, and licenses from a single hub. Click here to find out more.

Laura Moise is Sr. Product Marketing Manager at N‑able