90 Minds Community

One of the most surprising things to me as we started getting involved in the Microsoft channel last year is how many consulting firms are making a living moving companies from Office on prem to Office 365 (cloud). There is a ton of business going on here. Microsoft has a winner on their hands. http://www.seattletimes.com/business/microsoft/microsoft-office-365-most-used-web-business-app-report-says/

@PeterWolf - the other thing I've seen recently is where IT companies are doing the desktop virtualization. One of our clients recently went this route and the company providing the service, spun up two virtual servers to host Sage 300 and SQL at no additional cost to them. I guess the monthly revenue for the desktop virtualization more than offset the additional server hosting.

I think most ERP VARS who got out of the IT services business will regret it. IT services appear to have the most potential for generating recurring revenues and since customers cannot easily go ""pay as you go"" without risk - there's a much lower potential for customers to want to go off plan.

I don't fully agree @WayneSchulz . Think of the many years of making minimal margins on hardware/MS software products. Many were NOT making a profit. And how do you know what MS partner margins are on cloud products? I'm guessing not extravagant. A MS partner I know says it is still not profitable. Sure, to MS it is, as it will be to Sage maybe at some point??

I'm speaking more about the IT people who have put the customer onto a recurring monthly fee to support and maintain their networks. I would say that easy 1/2 to 3/4 of my customers have some outside consultant who I believe they pay a recurring support fee to. This fee covers daily management. When there's a server upgrade they treat that as a separate project.

MSPs like hosting providers were into recurring revenue before people really knew it was a serious thing. It took years for most of them but now they have a stable revenue stream and amazing profitability. Maybe this would be a good session pre-Summit? Get some MSP / hosters on a panel to discuss their transition and how things look now. Maybe even lead a 4 hour workshop about Transforming Your Practice. Maybe riff off of some of the ideas from Wayne and my MotM session but go a lot deeper?

IT services has brought a lot of different issues to our practice; however profitability does not seem to be a significant issue. Recurring revenue for consulting is typically easier to maintain/sell in IT than n our ERP consulting in our experience. Projects seem to be a little easier to define as well. Cloud is bringing change in our customer's organizations. Change is typically a very good thing for our firm. We are not in the business for the hardware margins but we will not pass on them either as long as they exist before cloud costs continue to lower making it an attractive alternative. Especially considering that something such as a SAN could be as little as $20K to $500K plus a project for implementation. IT services have been an important piece of our growth over the past several years. Though again- it brings on another set of issues than we had in a strictly ERP practice...