And I am here to tell you that 99 percent of VARs that have gotten into the managed services business are just beginning to tap its potential. The market opportunity is enormous.

Managed services involve handling and being responsible for a customer's IT functions, usually via the Web.

This includes not only running data centers, networks and a host of other services, but also, and most importantly, monitoring usage and installing alert systems to head off problems before they become critical—problems such as running out of storage or overloading servers or network security breaches.

This is a pure services play that ingrains a VAR into its customer's business. It changes the dynamic of the relationship between the two and makes the VAR a critical component of the client's existence.

One VAR pushing the envelope in this area, and reaping the rewards as a result, is Alvaka Networks in Huntington Beach, Calif. In fact, about 80 percent of the company's business can now be traced t o managed services, according to Oli Thordarson, president and CEO of Alvaka.

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Managed services business pays for all of the company's operating costs including field engineers, he said.

"Through managed services, we are moving away from a reactive, break-fix model to more monitoring and a proactive approach to preventing IT problems," Thordarson said.

Alvaka mainly focuses on network management, an area in which managed security services is playing a greater role each day. "Our first and foremost job is making sure our clients' networks are always up and running. We monitor this very closely and always intervene before there is a problem," he said.

The backbone of Alvaka's managed security services program is its AlvakaNOC, where a host of NOC (network operations center) engineers continually monitor and manage customers' networks.

Some of the features of the $35 million data center facility include: N+1 redundant power, plus a backup diesel generator; N+1 temperature controls; 24x7x365 on-site security personnel and security surveillance; multi-redundant Internet access; and the latest technology for fire prevention, detection and suppression. The building is also designed to Zone 4 earthquake specifications.

Why is it suddenly a lot easier to sell managed services? Click here to read more.

Although the investment in such a NOC is not cheap, Thordarson said it is well worth the cost, and the NOC is allowing Alvaka to expand its managed services business into new areas.

For instance, because of Alvaka's capabilities and expertise, the company recently signed an agreement with SonicWall Inc., a provider of integrated network security and mobility solutions.

The deal calls for Alvaka to provide its managed services to SonicWall's reseller base in an effort to increase the renewals and retention of the company's support agreements and convert static firewall customers to managed security appliances.

Click here to read more about the state of managed services security among VARs.

Alvaka is acting, if you will, as a "Master Managed Services Provider" or MMSP. How do you like that acronym, Oli?

Alvaka will work with SonicWall's reseller base and its customers to monitor the applications to make sure they are running properly, as well as providing full-blown firewall services.

The key here is that to avoid any confusion, Alvaka will work through SonicWall's resellers and not directly with the customers without the reseller's involvement.

"We are partnering with their reseller partners to support their clients," Thordarson said. "SonicWall is very channel-loyal."

During the next few months, Alvaka and SonicWall will embark on a regional road show to roll out the services to resellers.

In my opinion, this is a huge deal for Alvaka and a new, innovative approach to the market.

My gut tells me this is just the tip of the iceberg, and more vendors and solutions providers will embrace this model.

Elliot Markowitz is editor at large at The Channel Insider. He is also editorial director of Ziff Davis Media eSeminars. He can be reached at Elliot_Markowitz@ziffdavis.com.