MSP 501 Profile: DCG Technical Solutions on the Managed Services Pivot

Company Name: DCG Technical Solutions
Company MSP 501 Rank: 100
President: Brent Whitfield
Headquartered: Los Angeles

Primary services:

Twitter: dcgcloud

DCG Technical Solutions, which this year cracked the top 100 of the MSP 501, counts on its small business customers. They, in turn, count on Los Angeles-based DCG.

The company, which has strengths in security and cloud services, helps customers choose and deploy tech that results in “always on” and “worry free” systems.

President Brent Whitfield touches on navigating the pandemic and the biggest business pivot he’s had to make.

Channel Futures: What is one thing you wish vendors would do that they don’t?

DCG Technical Solutions’ Brent Whitfield

Brent Whitfield: Great vendor relationships make great MSPs. My favorite vendors dedicate internal resources to the care and feeding of an MSP Partner Advisory Council (PAC). I’ve served on a few of these PAC councils (Continuum and StorageCraft) and felt we cemented a partnership with these vendors that has stood the test of time. Every vendor calls us their “partner,” but being part of a vendor’s PAC puts real meaning into that partnership because of the frequent requests for input, sharing of the road map, and giving us access to the vendors C-suite. Vendors that don’t have well-thought-out PAC are missing out.

CF: What new opportunities and challenges came with the global COVID-19 pandemic?

BW: Our business is actually up year to date, even with COVID-19 and new deal flow (managed service and cloud MRR signups) is high because our two large verticals. Manufacturing and financial are experiencing growth this year and so are we. Pre-COVID-19, we added about two clients each month for a total of 24 new MRR clients. This year, we are going to exceed that.

CF: What do you love about the IT channel? What do you hate about it?

BW: I led an MSP peer group in Los Angeles called SMBTN (Small Business Technology Network). It’s been fun to watch our members become more sophisticated in their business practices as demonstrated by their willingness to learn and adopt best practices. It’s been fun to watch. I’ve also watched our primary vendors – ConnectWise, Continuum, StorageCraft, KnowBe4 and Proofpoint – and many others take a more “educational” role and less of a sales-oriented role. That has been great for MSPs.

In connection with my new M&A role as a founding partner of New Charter Technologies, and Oval Partners, our PE firm, we are observing sophistication with MSPs around EBITDA, quality of earnings, high net promoter scores and client retention Oval has not seen in other industries. I credit publications like yours, the MSP501 list criteria, HTG, True Methods and ServiceLeadership, along with some of the vendors like ConnectWise and Continuum for the M&A savvy we are seeing with MSPs these days.

What do I hate? It’s pretty frustrating to choose a best-in-class vendor, spend years helping them develop their products, then have them get bought out and ruined by a bigger player. We’ve seen this happen over and over, and starting over with a new vendor is expensive and time-consuming.

CF: Tell us the story of the biggest pivot you’ve ever had to execute.

BW: Early on in our VAR days, we were 82% hardware and 18% services. We went to about 12% hardware within one year, and have been less than 10% hardware ever since. That was extremely hard to do.  You have published lots of reasons MSPs should not sell hardware from a valuation perspective, but the reason we benefitted most from was improved client trust. Once we got out of selling the hardware, clients stopped wondering if we were recommending the hardware because they needed it, or because we just wanted to sell them stuff. Our trust improved with our client base and they enjoyed getting links to Dell/HP/Amazon/NewEgg since they knew they were getting the lowest price.

Gone were the days when we would lose a valuable MSP client because they needed to get a second hardware quote and we were a little higher. Gone are the days when we had to provide hours and hours of remediation time on faulty equipment. Now we charge for our time to procure the equipment and provide the shopping cart links. We also charge to deal with RMAs and DOA issues. Removing hardware from our offering has been the best move we ever made.

CF:Have you ever turned a nightmare client into a dream client? Tell us how.

BW: Yes!  Nightmare clients usually just need more love. We don’t retain all nightmare clients, not that would we want to. But we have found that if we offer them the same engineer, on the same day, at the same time every week, and we do a good job matching them up, we will retain that client for years. The client needs to step up to a higher spend, and some won’t, but if they give it a try, we’ve found it works 100% of the time.