MSP 501 Newcomer Award: Oosha Limited Comes of Age

Oosha Limited transformed its pricing model en route to becoming an MSP powerhouse.

The Wolverhampton, England-based firm earned the Newcomer Award in the 2020 MSP 501. The company targets professional services industries, notably the legal sector and accountancy sectors.

The company has evolved significantly in its 12-year existence. Matthew Newton, the Oosha’s joint managing director, founded the company in 2009 along with four other people. He and one colleague were working at a different MSP, and the other three came from the technical side of a small ISP.

Oosha’s Matthew Newton

Although the founders initially eyed professional services industries, they couldn’t be so choosy. They had kicked off their business in 2009, at the height of the Great Recession. As a result, they chose to cast a wider net for customers.

The MSP also focused more on competitive pricing at the beginning. Newton said Oosha adopted an as-a-service model before many of its nearby competitors; thus, the company initially relied on price its as a main differentiator. But that approach came with problems.

“Being price-focused was just not a way to grow a business for multiple reasons. Operationally, because you’re always under strain if you can’t get the resources to do a good job,” Newton told Channel Futures. “But also, if that’s all you can say to somebody – that we’re cheaper – that’s not much of a story, is it?”

Oosha gradually moved from price to quality as its emphasis, but the evolution took four years — four “very difficult years.” They were coming out of a recession, and they needed to first develop a large customer base and strong reputation.

“We weren’t taking a lot of money out. It was just about building that brand and building that business and experience,” Newton said.

It’s common for a young MSP to compete with pricing. They also often operate reactively, according to Newton.

“I think a lot of MSPs start off constantly putting fires out. They’re selling their services too cheaply. They’re maybe not using the best tools,” he said.

The MSP needed to change its pricing in another way. Oosha had been offering a tiered pricing model, in which customers could choose from a menu of services. But this “smörgåsbord” strategy inevitably backfired.

“If you give people that option, then they’re always going to choose the cheapest one and spend very little with you, but still have very high expectations of the services you provide them. And we soon realized that having this menu approach of, ‘Do you want a great, an OK service or a crap service?’ but phrased as gold, silver and bronze, people are going to choose bronze but still have a gold expectation,” Newton said.

Newton said his team consolidated its offerings into what they felt their customers needed.

“If you’re providing people with what you think they need, the chances are you’re going to provide a better service and you’re going to have happier customers,” he said. “But also, you’re probably going to be able scale, because there’s going to be efficiency at the heart of what you do.”

Blossoming MSPs face a conundrum. They want move upward to customers that will pay more for higher-end tools (event management, for example), but they must do so without initially alienating those price-conscious customers who provide their baseline revenue. Whereas the latter view IT as a necessary evil, the former view it as an enabler.

Newton said Oosha positioned itself well enough in the market to make this transition. Moreover, it no longer struggles to recruit those customers. The challenge today is to properly align its resources and staffing with its growth, Newton said.