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By Beatrice Mulzer |
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I'm not sure if there ever were any IT heroes from the customer's point of view. Traditionally, the customer only sees you when something unexplainable has happened to the office money pit, a.k.a. the network and attached computers. When was the last time the office manager or controller smiled at you and said "thanks" while handing you the check and really meant it? Don't despair—help is on the horizon, and the magic words to get your customers to smile may just be "managed services." Do IT Hero's still exist? Does this sound familiar? You have just finished installing 20 newly built workstations at a client's office, and the main portion of the project is done. Everything is running smoothly and in the most updated and patched condition humanly possible when the office manager suddenly announces that this computer stuff is easier then he thought. He then decides to be the IT administrator from here on, and it's all good because Joe in accounting also has computing experience. In his eloquent way, he lets you know that the business will save oodles of dollars by not paying you for the proposed monthly maintenance contract. You leave, and about six months later you get a phone call from the office manager stating that something is not working right. "Could you come by and take a look at that?" I am sure we all have experienced this at one time or another. Here is a customer that is trying to save money by self-managing his network infrastructure without really understanding all the odds and ends of the work that is involved. Downloading a couple of patches here and there and keeping an eye on the antivirus should do it, right? I like to compare this to using STP oil treatment for overall automobile maintenance. We drive cars every day and understand how car engines work, but do we change the oil, perform the regular checkups, and try to repair car problems ourselves? If we all know we get better results from a professional, then why is it that most small business owners try to manage their technical infrastructure themselves? This is where the break/fix relationship with the customer begins, when the customer doesn't call until it's too late ("Well, yes, I noticed the hard drive rattle the last two months, but what do you mean all the data is lost?") and you only come over when there is something to fix. At this point, you and your customer operate in yo-yo mode. You are unable to reliably forecast technical demand and service requirements, and the customer only sees you when something breaks and turns into an expense. This does not provide a good basis for creating favorable customer relationships. Most small businesses with less then 150 employees do not use standardized processes, instead using time-, material-, or project-based services. They tend not to understand the technology that helps drive their business, but they do understand the cost of business lost when technology fails. This is where the IT service provider (VAR, system builder, or consultant) needs to communicate that the services he can provide will help the business succeed by simply letting the customer focus on the business and the IT service provider focus on the technical aspects of the business. This is a very important point, so let me elaborate on it. Coming from the technical side, we tend to focus heavily on the technology itself instead of focusing on how technology can enable our customers to make or save money. Our customers look at technology as the necessary evil (expense item only) unless we can successfully convey how technology will enable their business objectives. The IT service provider's job is to bridge the gap between technology and end-user productivity. One way you can stop the yo-yo mode and save both your client's money and your sanity is by becoming a managed service provider (MSP). Managed service offerings are another enterprise trickle-down benefiting the small business segment. The idea is to move from reactive mode to managed or proactive services. Instead of the IT service provider sitting in the office waiting for the phone to ring, he monitors the customer's network, including servers, switches, routers, desktops, and applications, right from his location. Another option is to partner with a full managed service provider like Bedrock Managed Services & Consulting (www.bedrock.com). According to Mark Bakken, CEO and Ed Luck, COO of Bedrock Managed Services & Consulting, small businesses in the 10 to 150 seat range are the current sweet spot. With less than 5% of VARs offering managed services (and an anticipated growth to $226 billion by 2006 in outsourcing according to Forrester Research), these two may be on to something. Bakken and Luck got together and thought about how they could take their enterprise expertise and package it up for the small business. The result was incredible momentum. Bedrock started about 18 months ago and spent over a million dollars in research and development to create managed service offerings. As a result, Bedrock now offers a managed service brand called Solid Care. Solid Care is subscription-based outsourcing allowing small businesses to lower their IT spending while receiving cutting edge IT support. How does this work? Alliance partners can resell Bedrock services as their own. A system builder, VAR, or consultant that wants to stay true to his core business can resell value-add services or hardware without having to manage any part of it. For example, a system builder could sell a Microsoft server with SQL Server loaded on it and then offer the customer a contract to manage the system for a fee. Another Bedrock partner will fulfill the contract on behalf of the system builder or distributor. There are three different service levels, starting with monitoring, alerting, and reporting on the first level. This includes Microsoft and Novell Servers, network switches, routers, firewalls, desktops, tape drives, hand-held devices, and other network appliances being remotely monitored in real-time. The second level adds patching and upgrades while the third level encompasses forward administration, including system optimization and maintenance. The three-tier program allows each partner to determine the level of involvement with managed services. The partner program takes a unique approach, allowing partners to build a business around managed services through the Bedrock Alliance program and mix and match offerings. Bedrock created a partner handbook which contains information such as lessons learned, pitfalls to avoid, and what not to do for partners. It includes information on pricing, how to charge, service level agreements (SLAs), and tips on what a partner would want to monitor that is key to the customer. Bedrock has price lists for numerous applications and products, which are priced by both the number of users (1-9, 10-24, and higher) and how much work will be done for them. Mark Bakken explained a new platinum version program Bedrock is working on, which will include hardware and software refreshes every three years. This way the customer gets a server that always meets his needs as well as new software and licenses. Part of the contract states that the customer will get current and stay current, at the most one version release behind. This way the customer can't stay with an older program like Windows 95, and overall cost will be lowered. It doesn't make sense for an IT provider to try to support an old version. This is where the handbook for partners comes in again. Bakken says to think of it as an open source of ideas on how to do managed services in the partner community. "You have one group of partners that are like insurance agents, selling [managed services] because it's good for their core business because they are a system builder, and then we give them 10 percent. They sell a contract for $500 a month for 12 months, so the lifetime value of the contract is $6,000 and we will buy the contract from the system builder and give 10%, so $600. We would have one of the fulfillment partners show up in your company's name, do the work on-site and be responsible for the maintenance. And for the system builder, the new hardware would be built into the contract." This means that if it's a maintenance program or a hot spare program that has break/fix included, all hardware and parts will be procured from the system builder. This way you can sell a service you usually don't provide, earn a "referral fee," and keep your customers. This also works the other way around, where the system builder becomes a fulfillment partner of a VAR. Bakken is talking about getting a financing program that will offer a 0% finance rate, and he is trying to incorporate all he can to make it easy for partners. Bedrock understands that partners don't have the time to research it all. Partners pay a fee to access all the resources and to get leads. The handbook does more than just tell resellers how to justify the cost to their customers. It's also a cookbook that shows the sales process, and it goes the whole nine yards by telling the partner how to explain cost justification to the customer, implement it, and deal with different pieces of the services equation. You can get more information about the Partner Alliance program at www.bedrock.com/partners/alliance/index.html. Another way to get into the managed services business would be to become the MSP yourself. Peter Sandiford, CEO of LPI Level Platforms, Inc (www.levelplatforms.com), focuses on bringing the benefits of network monitoring and managed services to VARs and IT providers with LPI's Managed Workplace product. The Managed Workplace 4.0 agent can be installed anywhere on the customer site, perhaps in a file and print server or a Windows XP SP2 machine (for environments with less than 25 devices), and it reports directly back over the Internet to the MSP server. When the software is first installed, it discovers all assets, including all devices and applications, and sets up a best practices monitoring threshold based on templates. If it finds a SQL server, it recognizes the application and knows how to monitor SQL, correctly setting up the alerts. If it finds a Cisco router of a particular type, a Sonic Wall, Cyberguard, or another intrusion detection device, it knows what that device is and starts picking up security alerts and firing information back to the service center based on rules established by the VAR. Sandiford explains that this allows the VAR to maintain complete control of what is going on at the customer site. A typical VAR has 40 to 50 customers, and with each one of the customer sites firing back to the central dashboard, the VAR can maintain complete control over his customer base. The dashboard keeps him aware of everything that is going on because every application, device, and historical performance is reported in real-time. Managed Workplace monitors anything with an IP address, including network services, POP3, HTTP, HTTPS, FTP, Telnet, SMTP, DNS, NNTP, IMAP, LDAP, and custom TCP ports on any system like UNIX, Linux, Solaris, Windows, and others. The Central Dashboard has been designed for simplicity of use and currently acts as a monitoring and alerting tool only, but with the next release, due in September 2005, complete patch and remote management will be added. This will allow you to just point and click on a device in the Central Dashboard to be directly connected to it. Level Platforms is putting together the integrated dashboard to include Windows Server Update Services (WSUS), so the IT provider does not have to install WSUS on the customer site and can do all the patch management right from the central service center. The server at the MSP site requires a minimum of an Intel P3 1 GHz CPU, 1GB RAM, and 70MB of disk space running on Windows Server 2000 or 2003 and SQL 2000. Besides the investment in the server housing Central Dashboard, Level Platforms charges a $60 fee per site per month. Regardless of how many devices are located at the site, two or 200, the fee remains at $60. This sounded too good to be true, so I asked Peter Sandiford what gives with the subscription-based $60 fee. He answered, "Our goal is to make managed services available and affordable to every VAR in the world. If you look at the existing products that are out there, they are either very expensive or very limited in terms of what they do. Many of the products are too complicated for VARs with 20 to 50 customers and five to 15 employees themselves to operate. Our whole design goal was to make this extremely easy to use and very inexpensive, because there are a large number of VARs that should all be benefiting from this." Sandiford believes that the only way LPI will succeed is if its customers succeed, and therefore LPI puts a huge emphasis on their partner program. The partner program is designed to help partners become profitable managed service providers. LPI has the MSPNOW! program in place, which includes a "Four Weeks to Profit" step by step program. This includes pricing strategies, sales and technical training, and complete branded material. (All reports and brochures will be branded with the partner's logo.) LPI has all the materials on its partner site available but also offers customized consulting, working with each partner to help them develop its program. The partner site and consulting services are great tools to help partners change their business from a reactive to a proactive services model whether you are doing break/fix, warranty, or block hour maintenance. LPI realizes that there is no such thing as a one-size-fits-all program that partners should adhere to but takes into consideration that each partner company has different strengths and goals in the marketplace. Different VARs and IT service providers have different customer sizes and service offerings. Rather than trying to tell everybody "You have to do it our way," LPI has a general program with a checklist that includes all the things resellers need to do in order to become profitable as quickly as possible while staying consistent with their existing services model. Currently, LPI has about 500 VARs with 50 to 60 more signing up every month, and LPI helps each one of them to develop their ideal proactive services program that matches their existing business model and customer base. Sandiford states that most of the businesses are VARs, but he is increasingly talking to more system builders who are becoming VARs or are selling to VARs. "They provide Managed Workplace at all of the servers they ship out and then they provide services on top of those," he notes. Considering that Managed Workplace is sold on a subscription basis, that there is neither contract nor commitment required, and there is the promise of a profit within four weeks of signing up with LPI, the deal is a hard offer to pass up. LPI focuses on the SMB space, with most resellers monitoring between five to 250 desktops and some up to 500 desktops. There are many MSPs in the mid-market space, but LPI is one of the first to target sub-250 seat accounts. It looks to reduce cost and improve manageability and profitability in an outsourced environment for the small business. You can download and evaluate a version of Managed Workplace at www.levelplatforms.com/mw_trialsubmit.html. Other firms are also focusing on the SMB space, such ass HyBlue (www.hyblue.com), which provides remote monitoring, remote control, and spam and virus control. HyBlue offers a partner program and a 14-day trial download of its managed services software, as well. Michael Cocanower, president of IT Synergy located in Phoenix, said that he will not take new clients under contract unless they agree to use the HyBlue remote monitoring service. This takes us right back to bridging the gap between technology and business objectives. Cocanower understands that it is not only about the IT services that can be offered but also the customer's business goals, and he knows how to use IT services to support them. Offering proactive services creates a win/win situation for both the customer and the reseller. Could you imagine stopping by your customer site just to show your face, say hi, and have a cup of coffee while inquiring what other services you could possible offer—and not to fix something that broke? You'd be the IT hero! |
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