We regularly talk to NSCA members that have been successful in accelerating managed services. Here are some of the common threads we find.
Most integrators know that their business value and relevancy will soon depend—at least in part—on recurring revenue.
For years, however, some NSCA members have chosen not to prioritize managed services growth. The data we’ve continued to gather in annual State of the Industry surveys conducted in partnership with Commercial Integrator, along with findings from our own biannual Financial Analysis of the Industry reports, only confirm this fact.
This year, however, we see a glimmer of hope when it comes to the industry’s focus on recurring revenue. In the most recent State of the Industry report, released in January 2025, 35% of integrators reveal that 21% or more of their revenue is now based on services or subscriptions. (Only 9% could say the same in the last report.)
When asked to predict what percentage of revenue they plan to generate from services in 2025, 41% say they expect 21% or more of their revenue to come from services this year. This is good news for our industry!
How and Why Some Integrators Excel in Managed Services
What makes some integrators more successful than others in their shift to service-based revenue?
We regularly talk to NSCA members that have been successful in accelerating their managed services programs. Here are some of the common threads we find.
1. They Planned for Slow Growth
Integrators that are reaping the benefits of recurring revenue today didn’t necessarily become successful right away. With all the moving pieces involved—people, back-end procedures and processes, sales structures, and products—it can sometimes take a few years to change your path.
In fact, most integrators that are successful say they’ve offered managed services or as-a-service for more than five years. Very few integrators have demonstrated complete success in the first few years. And if they have, then they often had support from partners. (See more about that below.)
2. They Did Their Research
Instead of closing their eyes and taking a leap, virtually every company dedicated a significant amount of time to researching pricing, structures, and offerings. Basics like these must be in place first before you can sell managed services successfully.
By understanding these factors and where you fit in, your company will be better prepared to:
- Position its offerings competitively to attract customers
- Make sure its services are profitable
- Tailor offerings to what customers need
3. They Invested in Training
A critical piece of building a successful services program often involves training. While selling services may not require new talent, it does require the talent you have to understand how to implement a managed services program. Much of the training these companies implemented focused on sales (how to sell managed services vs. traditional projects, for example). But other types of training may be necessary, too.
For example, NSCA Member Advisory Councilmember Revenueify leads outcome-based sales training that focuses on behavior change for sales teams and gives participants the chance to practice the new concepts they’re learning in real-time.
4. They Implemented New Sales Commission Structures
Restructuring incentive programs is often necessary for sales teams that sell managed services. How should you compensate your sales team when they sell a managed services contract? How will you incentivize them to keep your RMR retention rate high?
Download “Structuring Your Sales Compensation Plans for RMR Growth” from our Essentials Library to find the answers. This whitepaper walks you through the different types of compensation plans to consider to accelerate recurring revenue and shares examples of each one in action.
5. They Called on Their Village
Most integrators can’t make the transition from project- to service-based work without help from outside parties. For example, many work with a partner to create or deliver monthly financing. Integrators also tend to lean on their ERP or CRM providers or turn to new ones to create customized solutions.
As NSCA Executive Director explains in the most recent State of the Industry report: “Smaller companies in particular should be looking for areas where they need support in order to be able to provide what many of their customers might be demanding. That might mean working with NSCA Member Advisory Councilmember Revenueify to make the transition to a recurring revenue model or with NSCA Business Accelerator GreatAmerica to offer more efficient financing. The biggest risk and opportunity for integration companies as they enter 2025 is making sure they don’t fall behind.”
