IT support comes in many shapes and sizes. On one end of the spectrum, there are small firms, which provide break-fix services. These local technicians usually only show up in an emergency—when a computer fails, say, or data is lost. On the other end of the spectrum are managed service providers.
Typically abbreviated as MSPs, these full-service businesses provide managed IT services that care for a company’s entire technology infrastructure. Once associated as outsourced IT services, MSP businesses now stand apart by delivering continuous, comprehensive system management, IT maintenance, and 24/7 support, plus defense against cyber threats.
In today’s digitally driven world, most MSPs provide remote management of hardware, software, network, application, and cybersecurity services. MSPs also relieve pain points associated with IT issues by assuming full responsibility for the technology infrastructure of their small to medium-sized business (SMB) clients. Instead of passively waiting for problems to occur, the best MSPs help their clients grow by providing strategic guidance on IT solutions and proactively identifying and addressing issues before they disrupt their business.
How does a franchise MSP business model work?
Typically, when people think of a franchise business they think of restaurants or stores like Walmart, but business IT is a rapidly growing franchise opportunity. Many of the largest managed service providers in North America are franchises. MSP franchisees can offer technology services and IT support to businesses at a cost that’s far cheaper than what the business would pay to handle IT itself, by leveraging efficiencies of scale and having access to resources that simply aren’t available to independent IT organizations. From within their local communities, franchise owners can tap into the proven business models and broad expertise of a national (or even international) franchisor. This franchise system support often translates into higher profit margins, faster ROI, and more growth opportunities.
At CMIT Solutions, our 250+ MSP franchises spread across North America provide affordable, enterprise-level IT support to thousands of businesses. Clients gain the benefits of technology that is higher quality and more reliable, flexible, and scalable than they would be able to implement, manage or afford with internal resources. We enable our franchisees to deliver best-in-class MSP services in critical areas like cybersecurity, network management, data backup, and cloud-based services. And we offer the business model necessary to build MSP revenue and MSP value.
Below are five of the most common services CMIT Solutions franchises provide clients:
- Managed IT support: Our flagship offering is a preventive maintenance and monitoring service that oversees client systems and identifies potential IT issues before they become disruptive. This proactive approach helps businesses stay up and running at all times, providing system management that runs in the background along with Help Desk support that gives clients access to dedicated IT help when they need it.
- Cybersecurity protection: Online threats and hacking tactics constantly change. That’s why CMIT Solutions deploys multiple layers of cybersecurity protection for client systems. These include basics like email security and anti-virus protection, along with more advanced solutions like end-to-end encryption and ongoing threat detection.
- Data backup and disaster recovery: At CMIT Solutions, we urge all clients to have regular, remote, and redundant data backup solutions, along with recovery protocols and business continuity plans, in place. That way, any company can bounce back from any negative event—even a devastating ransomware infection or natural disaster.
- Reliable network management: This is a must in today’s hybrid environment, where remote work needs to sync seamlessly with in-office operations. CMIT Solutions has helped businesses in every industry and every corner of North America maintain secure connections with a range of network services, including enhanced Internet connectivity, stronger firewall management, broad-based VPN provisioning, and remote access protocols.
- Hardware and software procurement: Purchasing isn’t easy—especially now that e-commerce dominates the market. Whenever a CMIT Solutions client needs a new desktop, server, laptop, tablet, printer, or mobile device, we leverage our established relationships with leading tech companies to select the right tool for their business needs. We also set all machines up with the latest versions of necessary software and proactive monitoring tools to keep new technology protected and optimized.
- Other services that CMIT Solutions and its MSP franchises specialize in:
- Cloud services
- Productivity applications
- Regulatory compliance
- Risk assessments
- Unified communications
- And much more
How do MSPs make money?
Managed IT services continue to become more profitable for the MSP franchises that offer them. Gross margins on the services offered by CMIT Solutions can be as high as 70-75%. And many of those services are sold on the monthly recurring revenue model, allowing our franchisees to start building MSP value immediately after opening their businesses.
In the franchising world, recurring revenues are considered the gold standard. They allow MSP businesses to become more profitable as time goes on and slowly increase net operating income. Accumulating predictable MSP revenue sources can help you make accurate plans for future income, build trust through long-term client relationships, and upsell additional products and services to reliable customers. In turn, that can increase your overall customer retention rate, a key consideration when assessing MSP value.
Digging deeper into the details, CMIT Solutions franchisees have enjoyed a substantial 20% increase in revenue month over month so far in 2022. This reflects the overall growth of the MSP market, which is projected to grow from $152 billion in 2020 to $274 billion in 2026 as more and more IT firms shift to the MSP business model.
Over the past three years, 22% of MSPs said that their total annual revenue increased by 5%, according to Datto’s State of the MSP Report. An additional 24% of MSPs reported growth of up to 10%—and only 3% of respondents to Datto’s survey saw a decline in annual growth of more than 5%.
How do MSPs help the businesses they service?
Managed IT services are also becoming more beneficial—and more necessary—for the businesses that rely on them. The percentage of companies using MSPs to manage more than half of their IT needs increased from 25% last year to 38% in 2021, according to NTT’s 2021 Global Managed Services Report.
The ongoing COVID-19 pandemic has also necessitated a massive spike in the need for cloud-based communications platforms and other hybrid work tools. A recent Acronis survey of MSP businesses found that client demand was shifting away from traditional “bread and butter” services like hardware or software and toward remote work support and cybersecurity protection.
MSPs are now offering their clients more cost-effective solutions, too. According to Mordor Intelligence’s 2022 Global Managed Services Market report, managed IT services can reduce IT costs by 25-45% and increase operational efficiency by 45-65%. Leading industry group CompTIA explains that these cost savings and efficiency improvements typically come in five areas:
- Reducing the need to hire full-time IT staff
- Streamlining employee training and education
- Providing seamless scalability
- Enhancing cybersecurity protections
- Relieving the stress of common IT problems
Why should I invest in a CMIT Solutions franchise?
Building a new business from scratch is incredibly tough. As a CMIT Solutions franchisee, you’ll get the support you need to succeed right away: established IT services and technology provider partnerships, a proven territory to build your business, training, marketing programs, and hundreds of fellow franchisees with a long history of success.
Founded in 1998, CMIT Solutions is one of the longest-running MSPs in the industry. We were one of the first IT service businesses to adopt the franchise model, and are a revenue leader in the MSP franchise market. We recently surpassed $100 million in total system revenue more than 3 years ahead of the projected timeline, placing CMIT Solutions among the top 25% revenue grossing MSPs serving the SMB market. We’re quickly expanding across North America and Canada with plans to establish locations in every state, province, and market.
Managed IT services are a recession-proof segment of the broader economy—after all, every business needs reliable computers, smartphones, Internet connections, and servers to operate. We hope you’ll consider joining the CMIT Solutions family as we continue to grow our franchise network. Contact us today to find out more.
