MSPs get more, pay less with PSA software on cloud computing platform

Jessica Scarpati

Nobody becomes a managed service provider (MSP) because they like keeping track of invoices, but everyone likes to get paid. Professional services automation (PSA) software can take the headache out of running an IT services shop, and doing so over a cloud computing platform can be kinder to your budget.

"The functionality has to be done, whether it's done on little sticky notes on your wall or whether it's done on an integrated management system that takes it from order to invoice … and why not allow technology to do the heaving lifting?" said Lynda Stadtmueller, a senior research analyst at Frost & Sullivan. "Software as a service (SaaS) is a beautiful model to do that. It's beautiful for an MSP because they don't have to lay out any money [for infrastructure and software licenses]."

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 I know our internal stuff goes down often and … we've never had their cloud disappear without it being announced in advance.
Travis Austin
CEORezitech Inc.

Instead of cobbling together multiple IT business automation systems, PSA software incorporates applications such as billing, invoice tracking, help-desk ticket systems and technician scheduling into one interface. Within cloud computing platforms, MSPs can access their PSA applications through a Web portal run by their vendors, which run the software from their data centers.

"A cloud-like or SaaS environment is the ultimate way to go because it's scalable, which means the MSP isn't putting out any money before he knows how many customers he has on his system," Stadtmueller said. "The MSP can grow using the services from the software provider without putting money into capital expenses, into purchasing hardware and infrastructure. They're basically able to do that at the provider's expense."

 Before you buy: Talk to IT business automation vendor about security, reliability

As with any cloud-based service, the savings are in the relief of not having to buy, maintain and power your own infrastructure, tempered by the security and reliability risks that come with the loss of control. But upon migrating their PSA software to a cloud computing platform, some MSPs have found that their fears of outages and security breaches were unfounded.

"I absolutely had reservations about [cloud-based PSA software], and today I absolutely have no reservations about it," said Travis Austin, CEO of Rezitech Inc., a southern California IT services shop that uses Autotask and its cloud for IT business automation. "I know our internal stuff goes down often and … we've never had their cloud disappear without it being announced in advance."

Hype and skepticism shadow the push toward cloud computing platforms, but more than a fifth of the 2,700 customers that use ConnectWise, a Tampa, Fla.-based professional services automation software vendor, have moved to the company's cloud-based product since it launched the service three years ago, according to CEO Arnie Bellini.

"It's not only convenient, but it's fast and you're outsourcing the care and security," Bellini said. "You're just seeing a lot of movement toward cloud-based solutions because somebody else takes care of the problem."

But a 24-hour outage for 198 ConnectWise partners in late October highlighted the risks of trusting critical IT business automation systems to a SaaS model. The outage occurred with customers who had been on their hosted solution instead of their cloud solution, Bellini said, maintaining that the latter can still be trusted.

 There's stuff you have to do to protect yourself, and that's no different from stuff you do in your own data center.
Lynda Stadtmueller
Senior Research AnalystFrost & Sullivan

"We have invested a lot of money in virtualization to create massive redundancy," said Bellini, who credited the affected customers with a month's service. "[The hosted solution] didn't have the level of redundancy that our virtualized cloud has."

When shopping around for cloud-based PSA software applications, MSPs should ask vendors questions about their disaster recovery and business continuity plans, Stadtmueller said.

"There's stuff you have to do to protect yourself, and that's no different from stuff you do in your own data center," she said. "It's a lot of homework, but it's certainly worth it."

New business opportunities using PSA software in cloud computing platform

Although it might seem that only larger shops would need a sophisticated IT business automation system, smaller MSPs may realize more benefits from using PSA applications – especially via a cloud computing platform, said Bob Vogel, chief marketing officer at Autotask, which offers only cloud-based professional services automation solutions.

"This is an industry that's predominantly [composed] of smaller companies, and they tend not to have lots of money and resources in place," Vogel said. "Yet the smaller you are, the harder it is to be organized. You're the sales guy one minute, the chief technician the next minute and the finance guy the next minute."

Jacob Braun, president and COO of Waka Digital Media Corp., an MSP based in Amherst, Mass., said using a cloud computing platform for his PSA applications has opened up a business opportunity he wouldn't have had with a traditional software platform.

Using Autotask's ticket system and TaskFire application, Braun can share help-desk functions with potential customers that may have a small IT staff but one that can handle only basic administrative tasks. Where other PSA software models could offer Braun's customers only a window into a ticket's status, the cloud-based model Autotask uses allows his customers to prioritize which tickets escalate to his technicians.

"It is in some regards a new business opportunity … but I also view it as a way we can better handle our customers," Braun said. "It's a way we can provide additional benefits to our existing customer base and provide more value…. We're able to integrate clients in our infrastructure in ways that we weren't able to do [with other solutions]."

Let us know what you think about the story; email: Jessica Scarpati, News Writer

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