Are you looking to grow revenues and scale your MSP without diluting your core services?
Strategic vendor partnerships are the way to go.
A study showed that 14.1% of MSPs secure new clients through partnerships. These partnerships may include cloud service providers, channel partners, data backup and recovery specialists, and cybersecurity vendors.
The added benefit of partnering is that those solution providers can complement your existing offerings and pricing models, enabling you to enhance your value proposition to clients
Many vendors also offer attractive revenue-sharing programs, providing a new stream of recurring income. But before you sign any agreement, it’s important to know about the onboarding processes, any contract exclusivity clauses, and the level of support the vendor provides to help MSPs drive long-term growth.
We’ll walk you through the vendor evaluation process and help you avoid common pitfalls and other criteria to consider before signing any agreement.
How to Evaluate Vendors: A Checklist for MSPs
The evaluation process can be broken down into several segments or criteria.
Contracts & SLAs: Contracts are a major consideration before partnering up with any vendor. In some instances, they are even deal breakers, especially if they don’t align with your strategic growth initiatives. Look for auto-renewal clauses and exclusivity agreements that could limit your ability to pivot during a later stage. Does the contract allow for flexibility, or are you locked into a long-term vendor relationship with limited exit options?
Accountability is everything. Service-level agreements (SLAs) are the backbone of vendor accountability. They outline exactly what you can expect in terms of performance, response time, and support availability. SLAs should include KPIs and measurable business metrics that make it easier to hold vendors to their commitments and resolve any potential disputes. Define the scope of services to avoid any confusion or breach of contract. Consider adding a hold-harness clause, also known as an indemnity, which protects your MSP from liability arising from the vendor’s actions or failures. When it comes to SLAs and contract agreements, every detail counts. A quarterly business review (QBR) can show whether the vendor is meeting their SLA obligations and aligning with your strategic business goals.
Security: Many MSPs partner with cloud service providers to receive a discount on storage, instances, and other features, but security is non-negotiable.
Cloud service providers such as AWS, GCP, and Azure all offer high levels of security, encryption, and advanced identity and access management. But for other strategic partners and vendors, you’ll need to dig a bit deeper. At a minimum, they should be able to present updated compliance certifications, such as ISO 27001, SOC 2 Type 2, GDPR, and HIPAA, for reassurance with clients and regulatory auditors.
Data ownership is another critical security concern. Make sure the contract clearly defines who owns the data, how it’s stored, accessed, shared, and deleted. You don’t want to be held liable for a breach caused by a third-party subcontractor your partner works with, especially if they failed to implement proper access controls and security guardrails.
Partners should disclose their data handling policies and third-party risk management processes. Security aside, you must also look into their channel partner program terms and conditions, which should define commission structures, payment terms, cookie durations for tracking referrals, and lead generation policies. These details are essential.
Onboarding: The onboarding process is often overlooked when evaluating vendors, but make no mistake; this is a very important consideration.
Does the vendor provide a smooth onboarding process for products, or are you forced to repeatedly schedule calls with tier-2 or tier-3 support specialists just to walk clients through every technical integration? Or worse, having to deal with customer churn
Vendors that offer complex cybersecurity solutions and integrations should have basic onboarding processes that include on-demand training videos, comprehensive documentation, a knowledge base, and dedicated support.
3 Common Vendor Pitfalls to Avoid
Beware of these red flags before signing any agreement.
1. Unclear revenue models: Do you have to wait net 30 to invoice and receive payment, or are you left guessing each month? Do you have to purchase additional licenses or pay for tiered support coverage a la carte?
If the vendor can’t disclose how and when you get paid or leaves out any hidden fees in the service’s scope, you might want to rethink that partnership.
A solid revenue-sharing model and payment structure should be fully transparent and clearly outlined in the SLA or partner agreement. Examine that contract thoroughly and have someone from legal review it before signing on the dotted line.
2. Bad incident response history: Does the vendor have a track record of data breaches or poor incident handling? Look beyond the NDA and into their breach history. If they have a bad track record, this could indicate a lack of security measures, which you certainly want to avoid.
No one wants to become the headline of a data breach that could have been prevented with a unified endpoint detection solution or timely patch management on a Windows operating system (OS). Those overlooked vulnerabilities trickle down to your clients and potentially compromise systems or lead to a breach. And guess who’s indirectly liable? Don’t take the risk. Perform your partner due diligence wisely.
3. Lack of integration compatibility: Not all integrations come “out of the box” ready.
If the vendor’s solution doesn’t integrate well with your existing tools and tech stack, it can break architectures and cause workflow friction, impacting client service delivery. Improper setup can also lead to misconfigurations, particularly with cloud environments, where clients in multi-tenant architectures may have shared assets or inconsistent policy enforcement, which could result in data exfiltration.
And speaking of data, another challenge is the quality and ingestion of data from fragmented tools.
Data ingested from multiple sources and tools creates data siloes and limits visibility, forcing IT to swivel-chair between dashboards. This can lead to increased false positives, delayed incident response, and critical vulnerabilities going undetected for long periods of time.
Go through the integrations and ensure that they are compatible with your existing tech stack.
Partnering for Success: Take a Unified Approach to Cybersecurity
Choosing the right strategic partner should be a comprehensive process that involves trust and full alignment on shared goals, ultimately delivering on your promise to clients.
Guardz helps MSPs build winning partnerships through a unified cybersecurity approach.
Connect the dots across security controls in a unified identity-centric platform to detect and mitigate threats faster. Give your clients the return on security investment they deserve while growing strategic partnerships that reinforce your value proposition with confidence. Win/win.
Book a demo and learn how Guardz can complement your strategic partnership and cybersecurity returns.
