Why every penny counts even when spending is on the up

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Over the last couple of years, it feels like there has been a collective tightening of the belts every time the prime minister, chancellor, or Bank of England has made an announcement. 

It has, undoubtedly, been a tough time for business. For many, making ends meet, never mind turning a profit, is more challenging than it has been for a very long time.

Naturally, you might expect this kind of environment would lead to a reduction in budgets for managed service providers as they look to remain competitive while protecting profit margins and remaining in business. 

It would seem as though it’s not quite as simple as that, however. According to a recent industry survey, budgets in the sector have increased pretty much across the board which, initially, is quite the head scratcher.

A closer look at the evidence shows spending has increased by necessity, not choice. Increased prices, higher energy costs, and additional investment requirements in areas such as cyber security are all what would be considered ‘non-negotiables’. 

In other words, they are the bare minimum required to keep services running and satisfy customers.

When these costs go up, there is no choice but to find the cash to pay for them. This means that, even though overall budgets have increased, there is absolutely no fat in the budget. So, with no additional investment available for infrastructure improvements or expansion, it’s vital every penny counts. 

Never has it been more important for MSPs’ decisions to be value driven. But making the choices most likely to achieve the best value isn’t always straightforward.

So, what steps can MSPs take to ensure every penny spent is pulling its weight?

Refurbished balances performance and value

New isn’t always best and, in most instances, doesn’t provide the best value overall. Typically, if you’re comparing a current model to a refurbished option on a like-for-like basis, you’ll usually save about 30-50%. 

Some of the largest savings can be found when buying either switches, hard drives, or a previous generation of server – in these cases, discounts of 70-75% are not unusual. This means that any initial investment will stretch further and deliver better value for money in the longer term.

By dealing with a reputable refurbished vendor, you’ll also find that warranties, quality assurance, and service are also comparable with even the largest suppliers.

Avoid waiting lists and costly downtime

While some of the post-COVID supply chain disruption we saw a year or so ago has calmed down, demand is still outstripping supply for a lot of equipment. When buying new, it can be weeks or even months between placing and receiving your order. 

If a piece of mission-critical tech fails suddenly, or a big new customer comes on board and extends your requirements then this kind of delay can lead to downtime which can prove expensive and reputationally damaging.

This is another challenge that can be bypassed by integrating refurbished technology into your buying strategy. Most orders can be fulfilled in a matter of days, meaning you can make the changes required without worrying about systems being down for an extended period.

Invest in what you need not what’s available

Whether it’s a server stack or a network device, no two businesses are likely to have the exact same requirements when it comes to the tech they’re buying. But a bespoke approach isn’t often available, especially when buying equipment that is brand new. 

Purchasing off the shelf, especially from one of the big providers, often means buying something that isn’t absolutely right for your needs. In essence, this means you’re either paying for capability or capacity that you don’t need, or having to tweak your products post-purchase so they get your job done.

Whichever way you look at it, this is an inefficient way to manage your tech stack. Finding a vendor that can support you in building a setup that does exactly what you need is a much more effective approach. 

While times remain economically tough, MSPs are going to continue to feel the pinch when it comes to spending. Even though the overall budget may have increased, in black and white, when compared to previous years, the amount that is readily available to spend is still very low. 

For as long as that remains the case, wringing every last drop of value out of every single penny spent is going to be crucial.

While stringent forward planning and a general tightening of belts can help, taking a more holistic approach to how buying strategies are developed can make a big difference. 

Ensuring the tech being bought is fit for purpose, excellent value and will arrive in good time all helps maximise value for money and return on investment. In this respect, refurbished technology, bought from a trusted vendor, can play a crucial role for MSPs. 

Nick Stapleton
managing director at ETB Technologies

Nick Stapleton is the founding partner and Managing Director at ETB Technologies. Bringing years of experience engineering, sales and business development, Nick started ETB in 2001. Based in Dalbeattie, Nick built a business at the heart of the local community which he still runs today. Central to ETB's success and growth is the core principle that customer service comes first.