It is becoming increasingly clearer that the margin for MSPs with regards to Office 365 lies in the security aspect of the application. Office 365 is currently in huge demand with over 135 million commercial monthly users. Through trusted advisers such as MSPs, resellers and Microsoft Cloud Solution Providers, its adoption amongst small and mid-size businesses continues to grow at a rapid pace.

Currently, partners can purchase from Microsoft Cloud Service Providers such as AppRiver, Intermedia, Pax8, etc. and can then resell 0365 licenses to their downstream customers. However, the margins made from this activity are very small. Office 365 is a reliable solution for the customer base of many VARs and MSPs. Although it allows them to capture new business, it lacks the ability to make significant margin. This leads to many VARs and MSPs questioning the point of 0365.

Despite it being evident that 0365 is a great email and productivity application, MSPs can’t build a sustainable business on such small margins. Cloud backup, migrations and other services can add to the value of an Office 365 offer, however:

  • 73% of 2018 MSP 501 listees rated their fastest growing service as security
  • 55% chose professional services
  • only 52% selected Office 365

For MSPs, consultants and resellers, O365 represents an opportunity to help build a profitable practice based around subscription sales to SMBs. It also helps clients to learn how to protect their investment within their IT budget and secure their network through a “defense in depth” approach.

Due to the continuing onslaught of phishing attacks and ransomware, IT budgets are being built with security in mind. Given the regular headlines reporting countless exploits where hackers have sabotaged an O365 environment with ease, this doesn’t come as a surprise. Security is a feature that Microsoft has added to 0365 but unfortunately this does not meet the security benchmarks set by most organizations. A recent study showed that a third of business owners do not have safeguards in place to combat cyber breaches. What’s more is that 60% of small businesses that suffer a breach go out of business within six months of the attack.

As email security experts who have gained over 20 years’ experience, we are aware new malware can penetrate the usual email filtering mechanisms. It has been the case for quite an amount of time that older email protection technologies, analysis reputation and fingerprinting as examples, are no longer effective against the evolution of these threats. Recent research conducted by Osterman shows that Microsoft’s EOP can detect 100% of all known viruses and updates every 15 minutes. However, the research also discovered it didn’t have the same security effects against unknown or new malware delivered by email.

As trusted providers, MSPS have a huge opportunity to provide a “full suite” of cloud productivity tools such as 0365, Dynamics, Azure and cloud security and compliance such as email security and web security, DLP, and archiving to their downstream SMB customers at combined margins of over 75 to 100%. This can be achieved without massive increases to their monthly spend.

Small to medium-sized businesses are focused only on the necessary to keep the lights on and to grow the business. Microsoft’s main messages to organizations choosing Office 365 is the cost savings that are achievable from moving to a cloud-based solution. A move such as this would save the company money and allow IT staff to work on business problems and, ultimately, add more value to the company. Web and email security and compliance do not need to be detrimental to those looking to save costs in their IT spend and productivity.

How MSPs can boost margins on 0365 business

It is evident the Margin for MSPs to be made with Office 365 lies in security. If MSPs fail to invest in security as a service and a defense in depth approach, it could prove almost impossible to make their 0365-business profitable. The dilemma for partners has moved past whether to offer security for 0365, it is now at point where partners need to discover how to best deliver a cost-effective advanced security platform that can handle todays advanced threats. This should be achieved while also keeping IT security budgets in check for their SMB customers.

In todays world consultants, managed service providers and resellers have the opportunity to offer customers a very cost-effective defense in depth approach to security. MSPs can now deliver advanced security with TitanHQ’s Private Cloud Security services – SpamTitan (email security), WebTitan (content filtering) and ArcTitan (email archiving) – alongside O365 subscriptions. Through doing this they can ensure they make healthy margins, while continuing to keep monthly costs down for their customers.

Currently, Office 365 continues to be the leader in the productivity and collaboration space. However, for partners selling and managing this service, margins remain tight. As partners sell and manage more 0365 mailboxes, offering add-on security is the answer to making the process more profitable.

Be Mindful of Gaps in Security with 0365

For MSPs looking to take their business further, offering security in depth service to plug the Office 365 security gaps is the answer. Email has become central to running an organization and, as a result, is constantly targeted by attackers. Because of this, it is vital for MSPs to use a reliable third-party security vendor like TitanHQ, who’ve been specializing in email and web security for 25 years. Unlike Microsoft, security is our area of expertise.

Today, we work with over 2000 MSP’s worldwide daily. We protect your customers from malware, phishing, viruses, ransomware, botnets and other cyber threats. A lot of these customers are Office 365 users. Our products were built from the ground up with MSP’s for MSP’s, which we feel is crucial. We save MSP’s time by stopping problems with support and engineering at source. We also provide ideal products to sell in your technology stack which allows you to increase margin. Contact us today to learn how MSPs like you can boost margins on Office 365 business.