Aabyss CEO believes prices should rise as inflation bites

Andrew Allen says that 'squeezing in the middle' is not the right way forward

Andrew Allen says that "squeezing in the middle" is not the right way forward amid a looming recession and that not being profitable will result in "not being around for a long time".

It comes after IBM CEO Arvind Krishna agreed at the 2022 Xchange Best of Breed Conference that partners should react to inflation by raising their prices.

And last month SAP revealed it would increase its support fees for the first time in nearly a decade as the software vendor pointed blame at inflation rates.

Can raising prices can help combat a recession?

Speaking a rt CRN's MSP Transform event on Thursday, Allen felt that raising prices can help combat a recession.

He said: "We're getting squeezed by the impact of the dollar's impact in some of the supply chain. There's also been significant wage inflation as well, which is rightly so.

"We can't just keep squeezing in the middle, we've got to be successful, we've got to be profitable.

"We deliver an exceptional, valuable service to our clients and if we don't remain profitable so that we can invest in our people in our future, we're not going be around for a long time."

Meanwhile, Chris Gabriel, chief strategy officer of Sapphire Systems, says the ERP reseller has taken a "proactive approach" instead of "sending 1,000 renewals out with a plus 10 per cent price tag".

He said: "What else can be added to that renewal that offers some kind of offset against that?

"So we're offering a subsidised RPA."

What should MSPs do amid economic uncertainty?

The UK economy is set to fall into recession later this year.

According to Goldman Sachs, the UK's GDP will fall by around one per cent through mid-2023.

Despite the uncertainty, Gabriel felt there has "never been a better time" for an MSP to refine its business model to operate more effectively.

"If I was an MSP, I would probably be focused more on internal operation of my business today," he said.

"If I can work more efficiently, if I can do those things better, I've got better value proposition to the market and I'm helping certainly my customer base.

"I think MSPs should focus on being the best they can be."

Meanwhile, Allen felt organisations may become "defensive" and that capital projects could be impacted.

"I think there's going to be a shift from capital projects," he said.

"However, we can also show them opportunities of where we might be able to leverage finance like some of the vendors.

"But I think they're going to behave like they do with every other part of their business, they're going to stockpile cash. So, we need to just be a little more agile of how we help them invest in the future as well."