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The MSP KB
  • 🏡Home
  • MSP Foundations
    • Introduction to Managed Service Providers (MSPs)
      • What are MSPs?
      • Who Needs MSPs?
      • MSPs vs. In-House IT
    • Operational Maturity Levels (OMLs) in MSPs
      • What are OMLs?
      • Size vs. Maturity Level
      • Boosting Growth: Best Practices & Tools
      • Beyond OMLs: Holistic Success Factors for MSPs
    • MSP Business Models & Revenue Generation
      • Common Business Models
      • Revenue Streams
  • MSP Operations
    • MSP Tools: Functions & Use
      • RMMs & PSAs
      • Categories of tools
      • Choosing the right tools
    • Common Industry Challenges & Solutions
      • Industry Evolution & Requirements
      • Challenges Faced by MSPs
      • Strategies for Addressing Challenges
    • MSP Departments and Business Units
      • MSP Service Desk Styles and Operational Maturity Levels
      • Professional Services Department: Technical Expertise and Collaboration with the Service Desk
      • Sales, Account Management, and Marketing: Driving MSP Growth and Client Satisfaction
      • Industry Roles & Responsibilities
    • MSP Compliance & Regulations
      • Importance of Compliance for MSPs
      • Common Regulations Affecting MSPs
      • Compliance Challenges & Strategies for MSPs
      • Risk Management and Incident Response
      • Working with Clients on Compliance
  • MSP Relationships
    • Managing Strategic Relationships
      • A Guide to Co-selling and MDF Strategies
      • Requesting MDFs from Vendors: Best Practices
      • Exploring Vendor-Specific Programs for MSPs
      • Best Practices for Vendor Channel programs
    • Peer Groups and Accountability Groups
      • Peer Groups for MSPs Benefits and Potential Risks
      • Accountability Groups: Fostering Growth and Success for MSPs
  • 🧰Resources
    • Communities
      • Online Communities
      • Peer Groups
      • Social Media communities
    • Business Resources
      • Podcasts & Webinars
      • Blogs & Books
    • Technical Resources
      • Podcasts & Webinars
      • Blogs & Books
      • MSP Toolkit
        • Screen Capture
          • Greenshot
          • PSR
          • ShareX
        • USB Stick Essentials
          • User Profile Wizard
          • PortableApps
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  1. MSP Foundations
  2. MSP Business Models & Revenue Generation

Revenue Streams

A successful MSP business leverages a mix of recurring, one-time, and complementary revenue streams to ensure financial stability and growth. By diversifying their income sources, they can adapt to market changes and capitalize on new opportunities. This section outlines various revenue streams that MSPs incorporate into their business models. For most MSPs, the recurring revenue is their preferred model.

Recurring Revenue

  • Monthly or annual fees from clients for ongoing IT services, such as network management, security management, and IT support.

  • Subscription-based pricing for cloud services, software, and infrastructure management

  • Service level agreements (SLAs) that outline the scope of services and associated fees

One-time Revenue

  • Fees for one-time projects, such as system installations, migrations, or custom software development

  • Revenue from consulting services, including IT assessments, strategy development, and technology roadmaps.

  • Commissions or referral fees from hardware and software vendors when selling products to clients

Complementary Revenue Streams

  • Value-added reselling (VAR) opportunities, where MSPs bundle their services with third-party products to offer clients a more comprehensive solution.

  • Professional services, such as IT strategy consulting, project management, or business continuity planning

  • Managed security services, including vulnerability assessments, penetration testing, and incident response.

  • Training and educational services, such as workshops, webinars, or certification courses for clients’ staff

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Last updated 2 years ago

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