3 Essential Things All MSPs Must Demand from an ISV Partnership

By Jason Beal

Jason Beal

Managed service providers are only as good as the services they deliver. The best ones are far more than folks who keep the lights on; they’re strategic problem solvers for their end customers.

That’s why MSPs who partner with independent software vendors (ISVs) to expedite and oversee critical tasks such as data migration, cloud backup and governance can equip themselves to offer new and effective solutions that exceed clients’ expectations and secure long-term revenue streams.

These relationships are growing. Even before the COVID-19 pandemic, the rapid adoption of cloud-based productivity solutions has driven more MSPs to partner with ISVs to save time and reduce complexities, a recent white paper from AMI-Partners (now Analysys Mason) found.

But while MSPs need ISVs to succeed, they also only have so much bandwidth. Partnering with an ISV is a significant investment of time — and the relationship requires nurturing to optimize the services provided for end customers. In addition to finding the right ISV partners, MSPs must have the proper mix, not only in terms of capabilities but quantity, too.

So, in an increasing pool of ISVs (who, by the way, are all vying for business with the same MSPs) how do you choose which is right for you? MSPs must be diligent in evaluating an ISV’s capacity to tackle their challenges and advance the business. It’s a detailed yet necessary vetting process, and the decisions can have lasting effects on your paying customers.

How to Start an ISV Journey

Here’s where I advise MSPs to start their journeys:

1. Align on strategy and evaluate their specialization and experience. Strong partnerships begin with a solid foundation. As such, MSPs first must determine whether a potential vendor’s IT road map and go-to-market strategy aligns with their own.

Get to know the ISV deeply; how do their solutions address risk mitigation, improved collaboration and user experience? Do they offer a management portal and/or partnership program to help you achieve scale and maintain order? Perhaps most important, does the vendor explicitly communicate how their services can meet an MSP’s business objectives?

Any ISV worth its salt ought to be obsessed with solving your customers’ pain points and finding every opportunity for their solutions to boost your own bottom line. And while understanding their value proposition is crucial to knowing if they’ll increase your revenue, you must also ensure their business is financially healthy. You need an ISV that will be in it for the long haul — one with a strong leadership team and a support system you can count on to realize their promises. When MSPs chase after the newest emerging tech bright, shiny objects alone, they often incur big risks and subject themselves to end customer churn.

Additionally, MSPs need to make sure the vertical markets they serve align the solutions offered by a potential ISV partner. An ISV that specializes in solutions for hospitality will be much better equipped to help an MSP with a bed-and-breakfast customer than, say, an MSP proficient in drones and autonomous vehicles. The shiny new technology I mentioned earlier may work for the latter but not the former.

Similarly, the ISV must have expertise in the same tech stack that an MSP uses. So, if you’re a Microsoft shop, make sure vendor partners are proficient in what is required to operate effectively on Microsoft Teams, SharePoint and Outlook. The same applies if your customers use Google or Salesforce. An ISV must offer the corresponding technology to enhance those platforms.

2. Confirm integration capabilities and look for consolidation. At the end of the day, you want an ISV to function as a true partner. Sure, that means that you and their support team should have mutual trust and understanding on a professional level. That’s an important piece of the puzzle. But when I think of a partnership, I imagine a scenario in which …

… the ISV’s technology can seamlessly integrate into the current offerings and services that an MSP delivers.

Ask yourself: Does the ISV have API integration capabilities to help you from a functionality standpoint? What about merging workflows, data sharing and the power to fuse different technologies in a way that reduces cost-to-serve and total cost of ownership?

If the answer to any of these questions is no, you’re likely to embark on a partnership that will result in higher labor and management expenses — which will shrink your margins. Given the already competitive market MSPs operate in, and the abundance of potentially better-suited ISVs, there’s no reason to miss out on revenue potential.

Another critical component to consider is if investing in a partnership with this ISV will help consolidate the number of vendors in your current configuration. As the sheer volume of ISVs continues to increase, MSPs have become more aware of the time and energy required to facilitate a strong partnership. That’s why identifying an ISV that integrates within your offerings and solves multiple end-customer needs is huge — and it can help streamline your stack to grow margins. Think platforms rather than point products to consolidate your vendor portfolio.

3. Set clear expectations and contract agreements. Before you begin any partnership, leave no stone unturned. Make sure you agree on tangible service-level agreements, deliverables, performance milestones, total cost of ownership and ROI targets in your contract. Defining and determining success for each variable makes the contract super clear.

MSPs must not conduct their ISV search with a dated (and shortsighted) mindset simply focused on “outsourcing IT.” Forming a strategic relationship with an ISV using the criteria above helps ensure IT becomes a business enabler and delivers a competitive advantage while optimizing “as-a-service” investments to deliver business value.

After all, anyone can buy an out-of-the-box tool that claims to solve their problems. An MSP can put the pieces together to drive full utilization of the solutions, which is a major value-add. That’s why it’s key for MSPs to fully understand an ISV’s offerings — from the first conversation until the contract is signed. After that, the sky is the limit.

Jason Beal is senior vice president, Global Channels & Partner Ecosystem, at AvePoint. He is committed to building relationships with MSPs, solution providers and systems integrators, as well as expanding AvePoint’s global distribution networks and cloud market presence. He spent eight years working in Europe with Palo Alto Networks and Ingram Micro, leading global distribution and commercial channels, advanced technologies division and EMEA public cloud go-to-market. You may follow him on LinkedIn or @AvePoint on Twitter.