Managed Services Success Still a Big Challenge

As the managed services market matures, some solution providers still struggle with how to transform their business to a fixed-fee model.

Managed services experts and solution providers say the primary problem is cultural, rather than technical. It’s about people and old habits that die hard. It’s about sales representatives trying to protect their turf and field engineers who fear losing their “star” status with customers when site visits become less frequent. And it’s about discipline in knowing how and which services to roll out first.

“Managed services based on monitoring and alerting should be introduced as an incremental revenue-generating offering to your existing break/fix customers,” says Peter Sandiford, CEO of remote monitoring and management (RMM) tools vendor Level Platforms. Sandiford recommends adopting the model by stages, adding services by leveraging new technology as it becomes available.

Because the model requires adjusting the business at all levels, from sales to engineering to collections to management, some solution providers find themselves at a loss.

Under managed services, solution providers use remote monitoring and management software to maintain and update their clients’ IT environments, for which they invoice clients monthly or quarterly. The model is designed to control IT staffing costs at client companies while providing more reliable systems performance.

“One of the beauties of managed services is you make the client’s networks run better,” says Ken Sponsler, vice president of engineering services at Connecting Point of Greeley, Colo.

For managed services providers (MSPs), the model produces a predictable revenue stream and transforms the business from remedial to preventive. Achieving that transformation, as Sponsler well knows, isn’t exactly easy.

Without remote monitoring, solution providers find out about network trouble when the client calls them or during a site visit. With managed services, they use the remote tools to set alerts for when devices or applications are threatening to run into trouble: A server is about to reach capacity or an application is running too slow.

To get started on managed services, providers typically review RMM tools from such vendors as N-able Technologies, Level Platforms, Kaseya and Zenith InfoTech. Once they decide on the tool to use, the hard work starts.

The tendency when first getting started with managed services is to set alerts for everything, triggering a torrent of sky-is-falling alarms from the system that sends solution providers to distraction.

Sponsler remembers getting 1,700 alerts in a single night. “We looked at everything as important,” he recalls. “We didn’t know what we would get.”

It didn’t take long for Sponsler and his crew to figure out that a device running at 100 percent capacity for 2 minutes isn’t as critical as if it does so for, say, 20 or 30 minutes.