Buy, Build, Partner: 3 Paths to New Managed Services Offerings The march of new technology products and services has been a profitable but unending treadmill for MSPs over the past 40 years. Businesses are looking to MSPs to provide all of the latest technology products and services that meet their company’s needs. But what does the MSP do if their customers want a product or service they do not currently provide? This presentation will focus on analyzing the three “go to market” options of Buy, Build, or Partner for creating new products and services. You will learn how to use a New Product Decision Matrix to sort out all of the pro’s and con’s of each new product decision to reach the decision best suited for your MSP.

Why Launch a New Product? Competitive threat -- No one wants to lose a customer to a competitor because they provided a product or service you didn’t

Launching a New Product: Buy Let’s look at the PC industry in the 1980’s. If you wanted to sell PCs to your customers you could buy the PCs from a company like IBM

Launching New Product: Build Build it yourself by assembling the components necessary to create a PC

Launching a New Product: Partner Or you could Partner with a PC manufacturer like Columbia Data Products to make the PCs for you to sell to you customers.

Organizational & Functional Impacts Launching a new product impacts your company both organizationally and functionally. Let’s discuss the organizations impacts 1st

Organizational Impacts: Management strategic objectives, resources, Risk management

Organizational Impacts: Finance OpEx, CapEx, inventory, and IRR

Organizational Impacts: Legal Contracts, regulations, taxes

Organizational Impacts: Technology Vendors Technology Sales & marketing support, product support, vendor management, training & certification

Functional Impacts: Marketing Marketing – market research, customer research, creating and updating marketing materials

Functional Impacts: Sales Sales – appointment setting, presentations, sales support, contracts

Functional Impacts: Installation Installation – equipment purchase, product delivery, training, and turnover

Functional Impacts: Support Support – customer care, help desk, knowledge tools

Functional Impacts: Billing Billing – invoicing, collections, dispute handling

New Product Decision Matrix BUY BUILD PARTNER Management Finance Legal/Regulatory Technology Marketing Sales Support Billing Installation OVERALL IMPACT LOW MEDIUM HIGH

Case Study Company Profile (2010) Current and Target Customers MSP with 25 employees / 5 years in business / 80 customers / 400 locations Voice and data networking, routing & switching, 24-hour monitoring, network operations center Current and Target Customers SMB financial institutions New Product Description Firewall & intrusion detection services We are going to go through a New Product Decision case study to show how the matrix works. This is a case study I know well because it was a decision I made as CEO of my previous MSP in 2010. We wanted to offer Firewall and IDS to our customers who were SMB financial institutions like community banks and credit unions. We are going to go through the entire matrix and put a green, yellow, or red block for each factor in the decision matrix.

Decision Matrix BUY BUILD PARTNER Management Finance Legal/Regulatory Technology Marketing Sales Support Management - strategic objectives, resources, Risk management Finance - OpEx, CapEx, inventory, and IRR Legal - Contracts, regulations, taxes Technology - Sales & marketing support, product support, vendor management, training & certification Marketing – market research, customer research, creating and updating marketing materials Sales – appointment setting, presentations, sales support, contracts Installation – equipment purchase, product delivery, training, and turnover Support – customer care, help desk, knowledge tools Billing – invoicing, collections, dispute handling IRR – Internal Rate of Return Billing IMPACT LOW MEDIUM HIGH Installation IRR < 10% > 20% 10-20% OVERALL

Summary Launching a new product is a multi-faceted decision Buy, Build, or Partner Organizational Impacts Functional Impacts Each factor has both qualitative and quantitative components that must be evaluated The tie-breaking factors are Risk vs. Reward and IRR All stakeholders in a new product launch must be included in the decision process before the decision is made It takes a lot of time and effort to determine the best path to market for a new Product or Service. The impact of a new product launch will impact your company both Organizationally and Functionally Many of the factors have both qualitative & quantitative components that must be evaluated All stakeholders in a new product launch must be included in the decision process before the decision is made The tie-breaker factors are usually Risk vs. Reward and IRR

It takes a lot of time and effort to determine the best path to market for a new Product or Service. The impact of a new product launch will impact your company both Organizationally and Functionally Many of the factors have both qualitative & quantitative components that must be evaluated All stakeholders in a new product launch must be included in the decision process before the decision is made The tie-breaker factors are usually Risk vs. Reward and IRR