How to Choose the Right MSP Software Without Getting Burned
The webinar with Gene Reich and Connor Swalm emphasized that MSPs should choose software vendors based on authentic, partnership-driven relationships, avoid hype-driven decisions by setting clear acceptance criteria aligned with actual needs, value vendors who listen and understand their business challenges, and insist on free trials to thoroughly evaluate usability, integrations, and support before committing.
In a recent webinar, Gene Reich sat down with Connor Swalm from Phin Security to discuss what managed service providers (MSPs) should look for when evaluating vendors and the red flags to avoid. Here are the key takeaways:
The Best Vendor Relationships Start With Authenticity
Authenticity is crucial in vendor relationships. You don’t just buy software—you buy relationships. If a vendor feels fake, overly polished, or focused solely on quotas, that becomes apparent quickly. The best vendors show up as real people, not just sales organizations. For example, a story was shared about a vendor employee aggressively scanning badges at an event just to hit a quota, which is a lesson in what not to do. Vendors should treat MSPs as partners, not just CRM entries.
Don’t Let Conference Hype Dictate Your Stack
Trade shows are designed to excite, but excitement can be mistaken for necessity. Many MSPs return from conferences convinced they need new platforms, which often go unimplemented. To avoid this:
Go into vendor conversations with acceptance criteria:
- What problems are you trying to solve?
- What features are non-negotiable?
- What would be nice to have?
- What’s completely unnecessary?
Without this framework, it’s easy to get swept up in a sales pitch and lose sight of your actual needs.
Great Vendors Listen — Even When the Answer Is “No”
Great vendors make customers feel heard. Vendors should reach out to MSPs who submit feature requests to understand:
- Why they need the feature
- What problem they’re trying to solve
- Whether there’s another way to accomplish the same goal
MSPs want vendors who understand the realities of their business. Even seemingly minor issues can have significant operational impacts.
Free Trials Should Be the Standard
A major red flag is when a vendor does not offer a trial. Trials create trust and allow you to:
- Validate workflows
- Test usability
- Confirm integrations
- Evaluate support responsiveness
- Determine operational impact
Trials benefit both MSPs and vendors by ensuring the fit is right.
Contracts Matter More Than Most MSPs Think
Pay attention to how vendor contracts are structured:
- Multi-year agreements
- Billing structures
- Pricing models
- Contract terms
Contract structure reveals a vendor’s priorities. Annual contracts can benefit MSPs by providing locked pricing, stable billing, predictable budgeting, and better vendor investment in onboarding/support. Always have a lawyer review vendor agreements to avoid costly mistakes.
AI Transparency Is Becoming a Huge Vendor Requirement
MSPs are increasingly asking vendors about AI usage:
- Is AI being used in the product?
- What models are involved?
- Where is customer data processed?
- Is data retained or used for training?
Transparency is especially important in regulated industries. Vendors should clearly explain data access, data flow, third-party involvement, and safeguards. If they can’t, proceed with caution.
SOC 2 Is Table Stakes, Not a Gold Medal
SOC 2 compliance is necessary but not sufficient. It means the vendor follows their stated processes, but MSPs should still evaluate:
- Operational maturity
- Transparency
- Incident response
- Data handling
- Security culture
A certificate alone shouldn’t replace due diligence.
Find Vendors Who Feel Like Partners
Community is important in the MSP industry. Peer groups, referrals, and shared experiences influence buying decisions. The best vendor relationships start with understanding how MSPs operate, not just with a pricing sheet. MSPs gravitate toward vendors who genuinely want to help them succeed.
Final Thoughts
The vendor landscape is becoming more complex, with more vendors, accelerated product development, and louder marketing. MSPs that avoid getting burned:
- Know what they need
- Ask hard questions
- Validate through trials
- Review contracts carefully
- Lean on peer feedback
- Prioritize relationships over hype
As stated in the webinar: “Treat people the way you want to be treated… and put your shopping cart away.” This is good advice for vendor relationships as well.