Managed Services Still Evolving

While ignorance and misguided marketing hype have exacerbated that challenge, the evolution of the model also has played a role. As solution providers that embraced the model at an early stage learned, managed services for many have turned out to be something outside of initial expectations.

And as providers adjust to the realities of the model, it has continued to evolve, making the adjustments that much harder.

"Managed services is still a moving target," said Mike Novotny, president and CEO of InterTech Computer Products.

Novotny shared his company's experiences with a group of about 100 solution providers who assembled in Dallas Dec. 3-5 for Ingram Micro's Seismic managed services conference. When InterTech got into managed services four years ago, Novotny said, "[The initial vision was] we'd never go on-site and [would] do everything remotely. We found that wasn't true."

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He said InterTech also learned early that offering customers an a la carte menu of service offerings only encouraged customers to "nickel and dime" the provider, so the company abandoned that approach in favor of an all-inclusive, per-user flat fee.

InterTech's experience is anything but singular. No MSP (managed services provider) that is being truthful will deny that the transition to, or addition of, the model brings with it a fair amount of pain. That especially seems to be the case with companies that decide to transition all their customers from the traditional product-centric, break/fix model to managed services.

InterTech's business breaks down to 40 percent services, half of which are managed services, and 60 percent product sales.

Another solution provider, Intelligent Enterprise, spent about nine months transitioning to a managed-services-only model. The move required some hard decisions, including dropping customers with fewer than 25 computer users, according to Erick Simpson, the company's vice president and CIO, who also spoke at the Seismic event.

Despite their differences in strategy, InterTech and Intelligent Enterprise encountered many of the same challenges in adopting managed services.

One undeniable truth they and others discovered about the model is that constant contact with the customer is paramount. You don't just turn on the remote monitoring tools, make necessary updates, do the preventive work and sit back satisfied that your customer is content.

If the customer is content, paradoxically he or she is more likely to start objecting to the fees. Customers who don't see their solution providers or get regular reports from them start to wonder exactly what they're paying for. They figure that if the network is running without a hitch, the provider must not have anything to do.

As was mentioned again and again during the Seismic conference, communication with customers is a must. And has been repeated often, so are setting proper fees, offering the right balance of services and planning the transition meticulously.

InterTech and Intelligent Enterprise, as early adopters, had few if any resources to guide them through the process. Today, while many providers remain uncertain about how to adopt the model, the number of resources has grown.

Best-practices guides, tutorials and business consulting are available from distributors such as Ingram Micro; vendors such as N-able Technologies, Kaseya, Autotask and Level Platforms; and from a number of other sources, such as the MSP Alliance. Intelligent Enterprise, for instance, has a sister business called MSP University.

Yes, the process is difficult. And no doubt the model has evolved. But providers serious about managed services have to be serious about the time, planning and energy it requires. And they must also not be shy about tapping the available resources.

Pedro Pereira is editor of eWEEK Strategic Partner and a contributing editor for The Channel Insider. He can be reached at ppereira@­ziffdavisenterprise.com.