Why this MSP is sacrificing sales roles to boost tech team
Barracuda and Sophos partner heads for Leeds Tech Hub as it plots MSP growth
Leeds-based MSP Altinet is set to move into a new tech hub in Leeds, as it continues to shift to a managed services model.
The Leeds Tech Hub is part of a near-£3m investment from the council in Leeds' digital sector.
Speaking to CRN, Altinet director Dan Bailey said that the move will quadruple Altinet's office space, as it looks to build out its team over its initial five-year lease.
Altinet had previously told CRN of its plans to hit a headcount of around 60 by 2019, but this has now changed, with Bailey explaining that hiring technical staff has become more important as the firm bets on an MSP model.
"It's changed a little bit over the last year or so," he said. "We've really focused on quality as much as we have on quantity.
"By the end of this year we should have at least 18 staff, but we've seen the required ability for our staff change over the last year or two with regards to managed services.
"We've increased our technical team because they are getting a lot more involved in the sales process, as well as the delivery of that service, rather than us just hiring a significant amount of salespeople and giving them targets."
The increase in Altinet's technical ability has seen it become the first Barracuda Premier Partner in the UK. The MSP's other key vendors include Sophos, Microsoft, and Amazon Web Services.
Bailey said that managed services made up 10 per cent of Altinet's revenue in 2016, but that the figure is up to 30 per cent for 2017 so far. A target has been set for a 50/50 split between product sales and managed services in 2018.
"The uptake has been fantastic and we've had to increase the size of our technical team, but the solutions-led approach has meant that the staff we've brought in have been more skilled and have more of an understanding on the technical side, rather than a pure sales approach," he said.
"I think that's how IT is changing, particularly on the managed services side, rather than just taking a part code and transacting it; there is so much more collaboration between the sales team and the technical team.
"Our technical team delivers some form of professional service with 95 per cent of everything we sell. That's something you don't get when you're just selling hard drives."
Bailey said the shift to a managed service model has seen the average value of Altinet's deals triple - as services are added on top - over the duration of the contracts.
While unable to divulge Altinet's figures, he added that MSP equalled its total 2016 revenue in the first half of this year.
As the managed services model continues to take a bigger share of Altinet's business, Bailey predicts that the firm will see a growing number of international clients, adding to the handful of clients it already has in North America.