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Office365 - where’s the Margin for MSPs? It’s in Security.

Posted by Rocco Donnino on Wed, Oct 3rd, 2018

Office 365 is in huge demand with over 135 million commercial monthly users and growing. Its adoption amongst small and mid-size businesses continues to grow at a rapid pace largely through trusted advisers like MSPs, resellers and Microsoft CSPs (Cloud Solution Providers)

Today, partners can buy from Microsoft Cloud Service Providers like AppRiver, Intermedia, Pax8, etc. and resell 0365 licenses to their downstream customers on very small margins. For many VARs and MSPs, Office 365 is a solid solution for their customer base. Yes, it allows them to capture new business, but without the ability to make margin, what’s the point?

There is no doubt that 0365 is a great email and productivity application but MSPs can’t build a sustainable business on razor-thin margins. Cloud migrations, backup, and other services can add to the value to an Office 365 offer, however :

  • 73 percent of 2018 MSP 501 listees rated security as their fastest growing service
  • with 55 percent choosing professional services
  • only 52 percent selecting Office 365.

For managed service providers, consultants and resellers, O365 represents an opportunity to help build a profitable practice around selling subscriptions to SMBs. It also helps educate clients in protecting their investment within their IT budget and securing their network through a “defense in depth” approach.

As the onslaught of phishing attacks and ransomware continues, IT budgets are being built with security in mind …even for the small and mid-size enterprise.  This should not be a surprise to anyone, given the regular headlines reporting countless exploits where hackers have undermined an O365 environment. Security is a feature that Microsoft has added to 0365 but for most organizations, this does not meet their security benchmarks. A recent study found that one in three business owners do not have safeguards in place to combat cyber breaches and 60% of small businesses that suffer a breach go out of business within six months.

As email security experts with over 20 years’ experience, we know new malware can penetrate the usual email filtering mechanisms. It has long been the case that older email protection technologies, like analysis reputation and fingerprinting, are no longer effective against the evolution of these threats. Recent research by Osterman identifies that Microsoft’s EOP can detect 100% of all known viruses with updates every 15 minutes. However, the research found it to be less effective against unknown or new malware delivered by email.

MSPS, as trusted advisors, have a huge opportunity to provide a “full suite” of cloud productivity tools (0365, Dynamics, Azure) and cloud security and compliance (email security and web security, DLP, and archiving) to their downstream SMB customers at combined margins of over 75 to 100% without massive increases to their monthly spend.

Small to mid-sized businesses are focused on “keeping the lights on” and growing the business. Microsofts core messages to organizations choosing Office 365 is the achievable cost savings from moving to a  cloud-based solution. Such a move saves the company money and allows IT staff to work on business problems and add more value to the company.  Email and Web Security, as well as compliance, do not need to cost an arm and a leg for those looking to save costs in their IT spend and productivity.

How can MSPs boost margins on 0365 business

MSPs must invest in security as a service and a defense in depth approach to make their 0365-business profitable. The dilemma for partners isn’t whether to offer security for 0365, but how to best deliver a cost effective advanced security platform that can handle todays advanced threats, while keeping IT security budgets in check for their SMB customers.

Today, managed service providers, consultants and resellers have the opportunity to offer customers a very lucrative defense in depth approach to security. With TitanHQ’s Private Cloud Security services - SpamTitan (email security), WebTitan (content filtering) and ArcTitan (email archiving) - MSPs can deliver advanced security alongside O365 subscriptions and make healthy margins, while continuing to keep monthly costs down for their customers.

Office 365 continues to be the leader in the productivity and collaboration space, but for partners selling and managing this service, margins are tight. As partners sell and manage more 0365 mailboxes, they need to find a way to make it profitable.  Offering add-on security is the answer.

Mind the O365 Security Gaps

The real opportunity for MSPs lies in the enhanced services businesses are looking for around Office 365. Offering security in depth service to plug the Office 365 security gaps can help MSPs take their business further. Email is mission critical to organizations and constantly targeted by attackers, as such it has become imperative that businesses have reliable security measures in place. It’s vital MSPs use a reliable third-party security vendor like TitanHQ, who’ve been specializing in email and web security for 25 years. Unlike Microsoft, security is all we do. 

We work daily with over 2000 MSP’s worldwide. We protect your customers from malware, ransomware, phishing, viruses, botnets and other cyber threats. Many of these customers use Office365. Crucially our products were built from the ground up with MSP’s for MSP’s. We save MSP’s support and engineering time by stopping problems at source while also providing ideal products to sell in your technology stack to deliver margin. Get in touch with us today to learn how MSPs like you can boost margins on 0365 business.

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