Managed services have limited appeal so long as hardware remains out of the equation.
The reason is simple: Customers typically want to deal with a single IT provider that can take care of all their needs. If they have to turn to someone other than their managed services provider for hardware, the appeal of a managed services arrangement starts to erode.
A lot of MSPs handle equipment, especially since so many have backgrounds in selling product. Customers pay them utility-like fees for the remote IT monitoring and management services they provide, but when the time comes to buy a piece of hardware, customers have to shell out money for which they may not have budgeted.
These unpredictable costs can be a source of tension between provider and customer.
Tackling the issue is as easy as adding the cost of hardware to the monthly fees to avoid any surprises.
But is it really that simple? No, otherwise everybody would be doing it.
Hardware as a service will require a level of planning to which a preponderance of customers, and even some providers, may not be accustomed. Providers will have to conduct thorough assessments of their customers' networks to make accurate projections for equipment upgrades and replacements.
MSPs that are doing a good job of monitoring and managing their customers' IT systems already know what those upgrades and replacements will require.
It is because they know the state of their customers' systems that providers in many cases have resisted taking over complete responsibility for them.
If a customer dealt with different service providers and IT suppliers previously, it is understandable that a current provider might hesitate to be held accountable for work that may or may not have been done properly. A surgeon who operates to fix botched surgery by someone else would not want to be held accountable for the previous operation.
As any provider who has been around long enough can tell you, networks at many sites often have expanded in hodge-podge fashion. Immediate necessity, not planning, frequently has been the driver for expansion. And as with anything, remedial decisions usually are not the best ones. The result is less-than-optimal system performance.
Providers, however, now have an opportunity to make it all better. If Cisco Systems is right, a wave of replacements of existing systems is getting under way. Networks in place since before the turn of the century cannot handle some emerging IT requirements.
Replacements of other hardware, such as desktops and servers, have also been ongoing for the past 18 months or so, and channel companies expect these to continue through the new year.
For managed services providers, this is an opportunity to offer hardware as a service. To tackle the capital issues that hardware as a service would create, N-able Technologies Inc. plans to offer leasing options to its partners, who use the N-able managed services platform to manage their customers' IT systems.
Leasing has had limited success in the IT world, but as part of the managed services model, it may finally take hold.
It will take some work because leasing requires a shift in thinking that may give some customers, and even providers, pause. But if you had asked anyone 15 years ago if they thought leasing would become as popular as it did in car-buying, most would have said no.
And if managed services is to effect the profound transformation proponents believe it will, adding hardware to the equation will prove instrumental.
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