Uplevel Systems Brings Flexibility, Stickiness and Profits to MSPs

Uplevel Systems is looking to change the model for providing managed services. If you think about the MSP business, you provide ongoing IT and cybersecurity services but from time-to-time, your customers need to make large outlays for equipment such as routers and firewalls.

MSPs want as much of their business as MRR because it is not only predictable but it also increases valuation. In rough numbers if break/fix EBITDA is worth about 6x in an M&A transaction, MRR could be worth 8x. Of course, there are many other variables to consider in M&A such as geographic location of the MSP, growth rate, specialization, customer churn, size of the MSP, etc. The point is, MRR is the best type of revenue.

Uplevel helps improve MSP margins, revenue and stickiness. Their appliance provides Active Directory, SD-WAN, file server, cloud backup, advanced firewall, WiFi, routing, switching, VoIP, site-to-site & client VPN, remote management and notifications.

Like Datto, the solution is not sold retail – just via the MSP market… Pricing is set by the MSP. The hardware is paid for as a service – by the customer to the MSP and by the MSP to Uplevel.

The more services that are turned on per user, the higher the cost.

The MSP is able to see a dashboard of their customers and their respective services. They can further drill-down to see the details.

In an exclusive interview with CEO and Co-Founder Tom Alexander, he explained the company started to sell to MSPs in 2017 and subsequently retooled to build a solution to meet their needs by the beginning of 2018. At that point, they had around 30 MSPs as customers. Now they have around 400.

“We’ve grown ten-times in the last few years,” he exclaimed.

In response to the Covid-19 Coronavirus, the company is waiving the cost of turning on VPN functions through the end of May, 2020.

“Many small-to-medium businesses (SMBs) are not set up to have employees work from home,” says Tom. “Our MSP partners have simply drop-shipped our secure gateways to home offices and talked users through the setup. Customers don’t have to be IT experts, and MSPs don’t have to send techs onsite.”

Uplevel Systems CEO and Co-Founder Tom Alexander

The company is joining a number of companies doing their part to make teleworking easier.

“We sincerely hope waiving VPN fees will assist customers and partners looking to work remotely while keeping their employees safe and healthy,” says Alexander. “We are standing by to help our partners navigate through these challenging times and wish everyone the greatest speed in safely returning to normal once the crisis passes.”

In a related story, our colleague Maurice Nagle broke the news on Uplevel introducing an SD-WAN optimized for SMBs back in November of last year ou our SD-WAN Resource online community.

In summary, Uplevel allows MSPs to pay for and charge for traditional hardware solutions as a service. They allow MSPs to sell without the sticker shock of new hardware while making their services stickier. They reduce support and management costs, making it easier for MSPs to serve smaller customers profitably.

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