How many times as an MSP business owner have you asked, “How much should I charge for this?” “What are other MSPs charging?”
Gradient MSP’s Colin Knox wants to make it easier to answer those common questions with insights that will boost MSPs’ profitability and growth. A number of industry vendors are supporting that effort too.
Gradient MSP’s new pricing benchmark assessment tool introduced today enables MSPs to compare their resale prices, costs, and adoption rates against data from over 1,000 MSPs, backed by more than $7 billion in MSP sales data. The assessment covers benchmarking across seven product categories and 85 subcategories commonly resold or offered by MSPs. In financial collaboration with a number of channel vendors, Gradient MSP is offering the tool for free.
MSPs have been “asking for guidance on pricing, how to price a service, what people are paying for a service, what margin they’re applying, all of these types of things, and even just traction that MSPs are having with certain types of products,” Knox, CEO and co-founder of Gradient MSP, tells MSP Success.
The benchmarking data comes from Gradient MSP’s platform, which helps MSPs manage operations and bill their clients accurately, Knox explains. “So we integrate out to 70-plus channel vendors to pull in consumption of all the products, how many units are being used or are deployed for each client. And then we attach that to the billing, contracts, and agreements within the MSP’s PSA. So as a course of that, we’re connecting and updating price and cost and unit counts to help the MSP bill accurately.”
In developing the tool, Gradient MSP anonymized, categorized, and geographically segmented the data. The tool can determine “on average, what an MSP is paying for that product category and what they charge for that product category in that geography, but without any names or other identifiable information attached,” Knox says.
Helping Partners Be More Profitable
Knox says as they were preparing to go to market he was speaking with some vendors in the community who said they wanted to financially support the initiative to make the tools available for free for their own MSP partners,. These vendors told him that the number one or two question their MSP partners ask is, “How should they price a service or product?” and “What are other MSPs charging?”
The supporting vendors include Auvik, Barracuda, Breach Secure Now, CyberFOX, DNSFilter, Huntress, Keeper Security, Liongard, N-able, NinjaOne, Sherweb, ThreatLocker, and TitanHQ.
Asked if supporting the free tool was in any way a reaction to the rollout of Kaseya 365 and its pricing, Knox says, “I can’t say whether … any part of their participation has anything to do with Kaseya and their K365. What I would say is that all of these vendors agree, it would seem in concept, with MSPs needing to be focused on the unit economics of their business and understanding the drivers of that and helping their partners be more profitable, be more conscious on how they can actually make money and find success beyond just finger in the wind.”
He adds that the impetus for the tool came from Gradient MSP’s own plans. “It’s something that we always wanted to do.”
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Knox says the tool has been in development for about two months. However, he says, “the underlying technology of it and the underlying data of it has been in progress and process for the better part of three years.”
The premise of Gradient MSP from the start has been “being able to provide answers and certainty to the MSP industry. And our plan was to go about delivering tools and solutions to the market, which over time could collect some information and put it in a fashion that’s completely anonymous but allows us to share strong and powerful insights to the community and in a measure of helping MSPs be successful. So over the last three and a half years, we’ve continued to develop our tools, and over that time we’ve built up a community of more than a thousand MSPs that are using our tools. And we are reconciling now for billing over $7 billion in annual revenue for MSPs.”
Knox calls the pricing benchmark assessment tool a first step in their plan to level up the industry. “You referenced Kaseya earlier, but we’ve long believed that the unit economics of MSPs needs to change. And we’ve long believed that the industry needs to focus on community and a collaborative and transparent approach to find success overall. So this is the first step. There will be a lot of evolutions that happen with this tool over time to make it even more flexible for MSPs and vendors alike.”
MSPs can access the tool for free here.
