Huntress succeeded with MSPs by framing its security product as a way to protect their margins. Since MSPs charge a flat fee, a security incident meant lost time and negative profit on a client. Huntress helped them avoid financial losses and become heroes to their customers, ensuring deep partnership alignment.
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Frame your solution as an essential, simple add-on to a larger purchase your channel partners already make. Sensei packaged its adoption platform as the necessary 'fries' for MSPs selling Microsoft Copilot 'burgers,' making the value proposition instantly clear and easy to sell.
Faced with resource-heavy US competitors in the direct market, uSecure identified the Managed Service Provider (MSP) channel as an underserved green space. They executed a hard pivot, rebuilding their product and licensing specifically for MSPs, which created a key differentiator that fueled their growth.
A common vendor mistake is attempting to apply a direct sales model to the channel. uSecure found success by truly adapting its business model, citing specific examples like moving from annualized to flexible monthly billing and eliminating minimum purchases. These concessions signal a genuine, partner-first commitment rather than just paying lip service.
uSecure initially underestimated how resource-constrained MSPs are. Their breakthrough came when they moved beyond simple PDF guides and built a white-labeled sales prospecting tool. This tool helped partners automatically build a data-driven business case for their own clients, proving uSecure understood their challenges and driving scale.
Huntress discovered that simply finding threats wasn't enough for its MSP customers, who lacked specialized cybersecurity staff for remediation. The product had to evolve into a fully managed, human-powered service that handled the problem end-to-end, moving from alerts to a 'click a button to fix' solution.
The financial incentive for resellers to transition to a Managed Service Provider (MSP) model is stark. Top MSPs operate at 50-60% margins, a completely different league from the 8-20% margins typical for project-based resellers, which often yield only 1-3% EBITDA.
Traditional revenue tiers (Gold, Silver, Bronze) are vendor-centric. A more effective approach is to classify partners by their business model. For example, an MSSP needs predictable upfront costs to build a service, while a value-added reseller may prefer volume-based rebates. Tailoring your program to their model, not just their size, is key.
Vendors and TSDs get lost in partner labels. The critical distinction is the partner's business model: Do they want a residual commission, to resell on their own paper, or a one-time payment? Offering this flexibility is key to recruiting and enabling modern partners.
Initial go-to-market efforts selling directly to small businesses failed because the buyers weren't technical. After five consecutive calls revealed that SMBs outsource their IT, founder Kyle Hanslovan realized he needed to sell to Managed Service Providers (MSPs) instead of the end-users.
In a B2B supplier or distributor model, success depends on going downstream. You must understand not only your direct partner's business drivers and KPIs but also the needs of their end-customer. This allows you to align strategy across the entire value chain.
