Some MSPs sell Microsoft 365 (renamed from Office 365) as part of their managed services. Along with providing additional revenue, you can use this service to establish relationships with new clients. Down the road, this can lead to managed cloud services, VOIP, cloud backup, and CRM management. In any case, Microsoft 365 administration can lead to some hefty profits on its own.
How Do MSPs Offer MS 365 Management Services?
In order to add paying clients for Microsoft 365, MSPs should determine how their offering adds value to buying a business subscription directly from Microsoft. The type of service offered depends on whether the client already holds and manages their own licenses or whether they are implementing 365 for the first time.
For Customers Who Already Hold Licenses
These clients are probably looking for resources to maintain the tool and add new users. Here are common management features you can include in your plans for clients that already have O365 and manage their own licenses:
- Backup checks
- User management
- Group maintenance
- Spam protection
- Basic Microsoft 365 questions
- Monitoring AzureAD logs
The pricing model is typically per user or device but, when dealing with SMBs, you might consider adding a package. For example, you could charge a set fee per month for the first 20 users then charge per user after that to increase your margin.
For Customers Purchasing O365 through an MSP
If you’re selling Microsoft 365, you have to decide what package to offer. Microsoft currently has four plans for businesses. There are also enterprise-level plans for large corporations that mostly manage their own software solutions.
Here are the four business packages and what they include (prices per user):
- Basic ($5): Web and mobile Office apps, Exchange (Email, calendars), Teams, and SharePoint (collaboration), OneDrive cloud storage (1T).
- Standard ($12.50): All the services in the Basic package plus Office apps for desktops.
- Premium ($20): All the services in the Standard package and advanced cyber threat protection, PC management, and mobile device management.
- Apps for business ($8.25): Streamlined offering that includes Office desktop apps,
Web and mobile versions of Office and 1T of cloud storage.
You can charge a slight upcharge per user per month if you are simply monitoring the system. With value-added services, you can increase your revenue and make life easier for your clients.
What Value-added Services Increase ROI?
Offering additional services can increase your revenue. You can offer services at a flat-fee for development and training types of tasks and charge hourly (customer-preferred) or per user per month depending on the needs of the client. It’s also possible to bundle additional services with your main MS 365 per user management fees. Just choose a consistent model that provides a reliable revenue stream.
You can add the following services for a higher per-user fee, flat fee, or per hour consulting fee:
- Implementation: Your solution should make it easy for the user to set this up. Include migration support for Microsoft 365 to integrate customer data from legacy systems to Microsoft 365.
- Training and mentoring: Offering webinars, in-person training sessions, and documentation can help your users optimize their Microsoft 365 implementation. You can incorporate training materials that Microsoft has available.
- Development services: You can source developers for clients who want to customize their Microsoft 365 configuration.
- Technical support: Whenever possible, MSPs should offer technical support as part of their packages. Price-conscious customers can always opt-out of technical support for Microsoft 365 or you can offer a discount if they don’t want it. However, you can also add a bank of hours so that they can evaluate the service. Many customers decide to include support after they realize the value it brings.
- Change management: This is another basic offering that you should either include in your default pricing or as an add on to your per-user fees. This is especially important for users who aren’t experienced with Microsoft 365.
What Are Some Bundling Strategies Used by MSPs?
One MSP recommends following their model to bundle support for Microsoft 365 with backup and other services. Additional services such as issue resolution may be charged at an hourly rate per device. Also, you can increase your revenue and offer discounted support via accrued consulting hours. These hours can go toward implementing new (to the customer) tools such as Teams.
The MSP representative wrote, “We also bundle an accrual of consulting hours into our offering so every year (depending on user count) they get some free hours … to implement a tool they’re not using, like Teams. Most will come to us for that kind of thing anyway, but doing it proactively for “free” actually helps generate additional revenue?”
What About Separate Billing for a Single Tenancy?
The whole point of a tenancy in Microsoft 365 is to store all your organization’s data (from OneDrive, SharePoint, etc.) in a single environment that’s easy to move around. However, some clients may want to split the billing for accounting and planning purposes. Sometimes, this also has to do with different payment methods between departments.
It’s difficult to split the billing when everyone is in the same tenancy. This situation is best avoided to eliminate the risks of missing fees, charges, and prorations during the bill split. If you have to, here’s how one MSP handled it.
“We do this with one of our large clients (450ish seats). They have companies in several states, share IT resources…share a 365 tenant, but want separate bills for each company. We pull their license usage information via PowerShell and update quantities on their separate bills monthly based on the user’s domain in 365.”
Pricing Microsoft 365 management fees can be tricky. Some MSPs increase the basic fees charged by Microsoft by a minuscule amount. These companies hope to win additional business through value-added service offerings. While a per-user or per-device pricing model is most prevalent, hybrid billing for consulting and other services is also common among MSPs. Whatever model you choose should fit your current pricing models for other services for consistency and legitimacy.
