Many MSPs and VARs eschew the chance to work with the United States government, and as the federal shutdown continues, it's really not that hard to imagine why. As a vertical target, the constant back-and-forth over the budget and agency funding can understandably make channel firms uneasy about depending on federal and state governments as clients.
However, there are many reasons why IT managed services providers may want to stick it out with the government, despite their frustrations. And certain service offerings - including secure cloud backup - can be the products MSPs need to appeal to these high-potential clients.
Always bounce back
In a recent blog post for Channelnomics, IT expert Larry Walsh offered a few reasons why MSPs shouldn't turn their backs on the public sector.
- The U.S. has a lot of cash on hand. According to Walsh, the federal government is the "single largest IT consumer in the world," with its IT expenses amounting to more than $85 billion annually. For example, CRN reported that the Department of Interior has undertaken a $10 billion cloud migration project, a contract for which multiple companies are competing.
- The federal government has many partners. The U.S. government is a big proponent of small business, and with that in mind, it outsources numerous projects - from healthcare to defense to security systems. Furthermore, the government is required by law to give a certain percentage of these contracts to smaller entities, opening up space for MSPs, Walsh explained.
- Government can give you an edge. "Placement on government purchasing schedules or government-wide area contracts (GWAC) is basically a license to print money," Walsh wrote. "These government spending mechanisms channel business to select solution providers, giving them an advantage over near-good competitors."
However, Walsh warned that winning a government contract and gaining entry into the federal marketplace is no walk in the park. It may require many tries and piles of research, and it doesn't always result in high revenues. That being said, those who do make it are able to further differentiate themselves in the private marketplace as well.
MSPs that understand how to navigate the government often appeal more easily to large corporations and startups that require guidance through the maze of rules and regulations in place to keep client information safe.
keep in mind that working with government agencies requires service offerings with a sophisticated level of security. If you're able to leverage a public-sector partnership to demonstrate your regulatory competence and the strength of your service offerings to private-sector businesses, you're that much better off.
We recommended vertical specialization as a way to distinguish your MSP business in our e-book, The Ultimate Guide to Selling Cloud Backup, because becoming an authority in a specific customer's field allows you to market expertise few others have. So, while the federal government is currently shut down, it doesn't mean you shouldn't be taking the time to examine the opportunities that a public sector partnership may hold for your business.