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Margin Opportunity in Managed Services

01 Oct 06

Resellers are continually looking for new products and services they can supply to satisfy their clients requirements. Obviously the services component of solution sales attracts much higher margins than the sale of hardware which typically provides between 5% and 10% profit, so resellers must look elsewhere for high margins.
What they really need to look for is opportunities to provide additional solutions to their customer’s problems that involve more of their technical services. These services include consulting, installation, support and any customisation services that the client may require.
If a reseller is updating or installing a new network and/or workstations the opportunity arises to provide more protection for the customer and solve the many problems they face in today’s internet-connected environment.
Resellers of GFI’s software and maintenance can make at least four times the typical minimum margin they’d make off hardware sales. When consulting, installation, support and customisation services are added to the equation the size of the opportunity can multiply well beyond the initial value of the software licensing alone. A reseller can also sell multiple years of software maintenance and any required antivirus updates to further enhance the profitability of the sale. Optional reporting, anti-phasing and communication modules provide even more margin to maximize the opportunity for the reseller.
Provision of managed services brings a continual stream of high margin revenue. For example GFi can provide cost-effective consultant’s licenses for a fixed annual fee enabling a reseller to provide remote, or onsite, vulnerability scanning and patch management services to clients. GFi also has consultant’s licenses enabling a reseller to provide remote network management and network security monitoring services. Additional consultant’s licenses can be purchased when required to provide for further expansion of the reseller’s managed services.
Resellers can be even more creative with managed service offerings if they have clients that would like to have content such as email filtered by the reseller’s infrastructure before being delivered to the client’s inbox. Gift’s anti-spam and email threat management software can completely filter email before being passed on to any SMTP or Microsoft Exchange email system. These services are suitable for clients that simply want to get on with their core business and would like to outsource functions to their IT provider.
Some resellers may even want to rent a server to a client that can offer a multitude of services including security, messaging and data integrity services. This server remains the property of the reseller and provides them with a continuous revenue stream. The client rents a cost-effective information management system for a minimal up-front expenditure.
Other clients may still want to retain full control of their systems in-house. Obviously GFi can assist resellers with a wide range of network security, content security and messaging solutions, differentiating them from their competition and providing a continued source of high margins.

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