The number one question we get year-after-year after publishing the MSP 501 list and study is “why do I rank where I do?”

For the second year running, we’re eliminating the mystery.

To qualify for the 2017 MSP 501, MSPs were asked to submit confidential survey applications, complete with 2016 financial results.

MSPs were also asked for revenue verification from a certified financial professional. Data was collected between Feb. 16, 2017 and May 15, 2017.

MSPmentor partnered with Clarity Channel Advisors to help produce the feature in 2016 and 2017.

Leveraging insights gleaned from real-world customer interactions and more than a decade of experience working in and around the MSP community, MSPmentor and Clarity developed the MSP 501 methodology.

The methodology relies on an algorithm that assesses company strength based on revenue contributions from key go-to-market activities.

Because not every dollar of revenue produces the same return, revenue from specific activities is weighted differently than others.

Revenue from true managed services – for example – is not only more sustainable than revenue generated from hardware reselling, it is also more profitable. This is why valuations of MSP entities vary greatly, and why some business models endure market upheaval better than others.

When determining a candidate’s ranking for the 2017 MSP 501 study, we put the highest value on revenue generated from true managed and cloud services.

Revenue from professional services was given a somewhat lower weighting, followed by revenue generated from consulting and finally hardware and software reselling.

The weighting behind various revenue streams is presented here: