Monthly Recurring Revenue (MRR) is the most important topic for Managed Service Providers (MSPs). MRR is the lifeblood of MSPs and services they can bring into their portfolio of service offerings that generate MRR as well as client value are in high demand. Monthly Recurring Revenue is the amount of income your business generates automatically through your contract agreements with your clients on a monthly basis. Subscription services use this metric because they often receive payment on a monthly basis, making their monthly revenue numbers very important. Monthly invoices for services are typically booked as Operational Expenditures for Small and Medium businesses. In contrast large capital expenses would be represented by hardware purchases or perhaps a company vehicle or building.
Source: SaaS Metrics
Additional Reading: 8 SaaS Metrics and KPIs Every Company Should Track
Differences between Capital Expenditures and Operating Expenses
Related Terms: Capital Expenditures, Operating Expenses
What does this mean for an MSP?
- Adding value to your clients through improved security, lower risk of costly compromise, and employee confidence from learning important 21st century skills (password managers, how to spot Phishing attacks etc.);
- Reduced stress and burn out for your MSP employees from fewer overnight and weekend emergencies due to cybersecurity incidents (ransomware);
- Monthly recurring revenue that can be had by partnering with Learning Management systems that provide a share of the revenues to your MSP;
- Improvements to your Client retention by adding value to your client relationships.