Verticals. Leaders in the IT community have been preaching this for years. Some in the MSP community are catching on, but many are like church go’ers on Sunday morning: they hear the message, they think they get the point, but come Monday morning it’s back to the old ways of doing things.

Numbers demonstrate that when a managed IT services company picks key vertical markets to penetrate, they end up having enormous success. But why do so many managed service companies elect not to verticalize their offerings and become the experts in certain practices? One word! Fear.

Fear is the biggest limiting factor that has plagued mankind since the beginning of time. Fear stops great people from doing great things. Fear stops you from making life-changing moves, and fear may stop you from cracking into a vertical market that is ripe for picking.

Joe Young, owner at Boston IT services firm GDS, says that selecting the healthcare vertical as one of their primary markets has “increased our organizational value and profitability”. The team at GDS is recognized nationally as experts in all things for healthcare IT. “It puts us in a better light when competing against someone that has cursory knowledge of the industry and the issues.”

Young knows that selecting vertical markets provides GDS a competitive advantage over other managed service companies in New England and across the country.

How does an MSP select a vertical? This is the easy part. Look across your client base and study each of your clients. Do you have more CPAs than law office? Maybe you have a number of music industry clients or businesses in a certain area of the city. These are ways to narrow down your vertical markets.

Ken Wallewein, who owns K&M Systems Integration, a Calgary, Alberta based managed services company, looks at verticals in a different manner. K&M Systems focuses on areas of Calgary, particularly the Foothills Industry Park and the Airways Business Centre. Wallewein has invested his time to understand the particular business challenges facing industries in these areas within Calgary.

“We understand the challenges facing businesses in Calgary from Internet reliability, challenges with communication systems and the simple lack of quality IT support in these parts of the city.” Wallewein researched and determined that many MSPs in Calgary were hunting the eight hundred pound gorilla in the oil sector and ignored the businesses in the outlining areas of Calgary. When he turned to the outliers with solutions to address their unique problems, he was well rewarded for his thinking.

Verticals aren’t just about particular industries. It is melting pot of many factors. Here are items to review when selecting verticals:

  • Industry Verticals: What particular industries are technology dependent or see technology as a strategic asset?
  • Technology Verticals: Do you have knowledge of a particular technology that is in demand? Do you specialize on a particular security offering? Maybe it is document management or some other technology that many MSPs seem to not bother with.
  • Geography: Are there particular geographies that are more lucrative than others? Are their parts of your city or state that are not serviced well by all the other managed service companies?

When asked about why vertical markets mean so much, Joe Young concluded, “We have not done a complete valuation but we know our multiplier on our healthcare contracts would be higher than the standard managed services contracts.”

What do you have to lose?

Get started today by taking your marketing vertical, and then have all the other pieces fall into place.

Ulistic was founded in 2010 by Stuart Crawford. Once the owner of a successful MSP himself, Stuart now pursues his passion of bringing affordable MSP marketing services to the IT community.