MSPs: Grow Your Business by 'Owning' the Customer Relationship
Even more MSPs are offering communication services to expand their portfolios and generate recurring revenue. However, MSPs often fail to fully capitalize on this opportunity due to misaligned channel strategies that limit their earning potential.
June 25, 2025 | 4 min read
How to gain a competitive edge strategically
We’ll explore the key differences between channel partnerships and wholesale arrangements, and how buying communication services wholesale allows MSPs to directly control key factors like pricing and CX – leading to higher margins and “stickier” customers.
Channel vs Wholesale: Which is the better option?
In general, there are two ways to deliver communication services like messaging, hosted PBX, and SIP trunking:
- Channel partnerships: With this model, MSPs resell third-party services, earning modest 10-20% commissions while their partners handle management and support.
- Wholesale: When using a wholesale model, MSPs purchase communication services at a low rate and resell them under their own brand. This allows MSPs to operate as their own provider, retaining full control over pricing and customer service
On one hand, channel partners can be a practical choice for smaller MSPs with limited resources, or those prioritizing other services like IT support, cybersecurity, or networking. When working with channel partners, MSPs simply offload management to their provider, providing an easy way to expand their portfolio with minimal involvement.
However, while channel partnerships tend to be convenient, they limit profitability and long-term growth. For MSPs seeking to maximize profitability and scale their business, the wholesale model offers far greater control and earning potential. As a result, a growing number of MSPs are switching to this strategy.
To that point, Kaseya recently found that 91% of MSPs are prioritizing profitability in 2025, with providers increasingly focusing on business expansion and financial success. To stay ahead of the game, MSPs should use this time to reassess their pricing and go-to-market models, and ensure they are taking full advantage of heightened demand for their services.
Why it pays to own the customer relationship
- Control Pricing: With a wholesale model, MSPs can determine their own pricing, eliminating the need to consult with third-party providers. This can lead to an average of 70% more profit compared to working with channel partners, which typically have pricing restrictions and fixed margins.
Having full pricing control allows MSPs to tailor offerings for different market segments and stay competitive. MSPs can introduce promotional pricing, offer custom solutions, or adjust rates based on market trends or customer feedback. - Be the first line of contact: In the highly competitive managed services industry, maintaining direct contact with customers is crucial. Relying on third-party providers for service inquiries tends to weaken customer relationships, and makes it harder to foster loyalty.
By owning the customer, MSPs can build long-term relationships and uncover lucrative upselling opportunities. To illustrate, a client may initially seek support for their phone systems, but indicate they also need help with other areas like cloud storage or cybersecurity.
By being the direct point of contact, the MSP can identify the customer’s additional needs and offer relevant solutions – solving the customer’s challenge, while setting the table for additional revenue streams. - Deliver Additional Value Beyond the Sale: Winning a customer and closing the deal is only half the battle. MSPs also need to keep customers and generate repeat revenue over time. This requires earning customers’ trust and loyalty, and demonstrating clear and consistent value.
For example, customers in highly regulated industries like healthcare, finance, and government must comply with evolving regulations like HIPAA, PCI DSS and the EU’s GDPR framework, among others. These regulations can be complex and confusing to navigate. By being available and working directly with customers, MSPs can provide ongoing guidance and save time for customers.
When outsourcing operations to third-party channel providers, MSPs lose out on valuable opportunities to show their expertise. Over time, the partner can become more valuable to the customer 0 and cause them to view the MSP as the middleman. - Build a Better Financial Future: Every MSP needs a well-structured exit strategy built around long-term profitability and sustainable revenue. Financial stability is key whether selling, transitioning leadership, or stepping into an advisory role.
While channel partnerships can provide great supplementary income, they typically don’t deliver the high returns that MSPs need to achieve financial stability. MSPs typically operate on thin margins due to high licensing costs and limited pricing flexibility, when they should be producing substantial profits.
Owning the customer relationship enables MSPs to develop a robust and lasting financial plan. Controlling revenue is one of the tenets of a sustainable and scalable business model.
How QuestBlue Supports MSPs
QuestBlue’s leading wholesale platform provides everything MSPs need to sell, provision, invoice, and support customers, from a single and intuitive interface. MSPs can leverage QuestBlue to unlock high-margin monthly recurring revenue, while retaining control over all aspects of the customer relationship – from branding and pricing to service management.
In addition, QuestBlue provides advanced support where and when it’s needed, helping with areas like configuration assistance and transparent customer service through a team of experts engineers and developers who are on call 24/7.
By working with QuestBlue, MSPs have a significant opportunity to achieve business growth and demonstrate greater value for customers across all industries.
conclusion
At the end of the day, choosing the right go-to-market model depends on several factors like your business size, goals, and resources. But as an MSP, it’s important to understand that you have options. For many organizations, owning the customer relationship can yield stronger profitability and outcomes compared to relying on channel partnerships.
To help you visualize the differences, QuestBlue now offers a special formula that reveals exactly how much you can earn when owning the customer versus a channel model. To view the formula and discover your earning potential, please reach out.