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MSP Minute
May 27, 2021

A 64% Chance of Device Failure? How to Easily Flip the Odds in Your Favor

Denes Purnhauser

Did you know that 64% of managed servers are out of warranty? To help turn this loss into a win, this week’s MSP Minute shares a 3-point plan for boosting your MSP’s success with Asset Lifecycle Management.

A 64% Chance of Device Failure? How to Easily Flip the Odds in Your Favor

I came across a really interesting number the other day and the number was 64%. That 64% actually represented the percentage of servers that are out of warranty (in the ScalePad tool). This can be applied to most devices as more than two thirds of them are out of warranty.

If you think about that, the implication is that more than two thirds of relationships between MSPs and their clients are weakened. Because of this fact, it’s actually a set up for a lose-lose relationship.

This means that when a device, like a server, is out of warranty and it fails, it's extra work for you. So you lose. The client is then going to second-guess whether you are the proper company to work with, and they are going to lose because they are going to have an outage or downtime.

Preventing Out of Warranty Problems with Asset Lifecycle Management

It’s always a problem to have items out of warranty. But if you think about it, it can be prevented by proper Asset Lifecycle Management. It’s basically just seeing yourself, the MSP, as the adult in a room. And you have these clients that don’t see the value in paying extra for this warranty service. But you are the adult. You have to set the rules and you have to stand your ground and say, "no, having unprotected assets is not okay."

Create Policies Around Devices Out of Warranty

Just by putting a couple of things in place, it's really easy to manage. The first is creating some policies around things like, "No, there is no such thing as a device out of warranty. We are not managing that." Many MSPs we know actually enforce that. And they are more successful. Why? Because it creates more predictability. You protect your team by creating a win-win relationship between your team and your clients in the long run.

Think of Warranty Protection as a Non-negotiable Insurance Policy

For the second tip, just think about this analogy: when you have a car, you need insurance. Without any insurance, it’s illegal to drive a car. Why? Because it’s in everyone’s best interest for the vehicle to be covered in some way. This is why warranty coverage shouldn’t be negotiable. There should be no such thing as an environment without a backup and warranty protection can help solve that problem.

If you state these policies upfront, it will be much easier to enforce them later on. As a result, your team is happier. The client is happier. Everyone is happier. Yes, sometimes we need to argue with our children but we need to have these tough conversations and tough love. In the long run, it creates a better client relationship and a better business for you.