While a growing number of solution providers grapple with how to meaningfully leverage the managed services model, one company is ready to take the channel beyond the model.
The Utility Co., a startup in Ottawa, this week starts to recruit solution providers for a new approach to managed services targeted at SMBs (small and midsize businesses) that deemphasizes technology in favor of a stronger focus on consultation and services. The company aims to recruit some 100 partners in the next 15 months.
Founded by Mark Scott, the former CEO of managed services platform vendor N-able Technologies, Utility aims to turn a range of companies, such as IT solution and services providers, office equipment sellers, and CRM (customer relationship management) and accounting software integrators, into franchise partners that will work with SMB customers to asses their business needs and to use technology to enable them to meet business goals.
"We're not a software vendor, we're actually a service company," said Scott, the company's president. "We deliver hardware, software and services through a utility model."
What that means is that Utility, working through its partners, will deliver technology to customers as a service. Customers will have a choice of tapping Utility's hardware, software and service offerings through the company's franchise partners, who will charge customers per-user, utility-like fees typically on a monthly basis.
Utility Co. aims to address two fundamental issues that Scott says have hobbled the implementation of the managed services model.
One barrier is the high cost of people, processes and technology that solution providers face when adopting the model. And the other barrier is the failure to actually address the technology requirements of customers as they relate to the achievement of business goals.
Too often, Scott said, solution providers anchor the conversation with customers on the technology when they instead should be focusing on business needs.
"When you're talking to a business stakeholder, typically they are not interested in talking about technology," he said.
This realization serves as the foundation for Utility's service program targeted at SMBs, dubbed "Connected Office," which Scott said addresses three fundamental business areas—operations, communications and management. Connected Office is scheduled for release on Sept. 6.
The goal is to improve the execution, automation and management of business processes such as sales, marketing and customer service to make the technology truly meaningful.
"It moves the process from plumbing to content," Scott said.
Scott envisions a model in which a typical company with 100 employees or less would have a network for Internet access and printing while tapping hosted applications for just about everything else. Network security and Exchange servers, for instance, would be hosted at Utility's NOC (network operations center), eliminating the need for the customer to make significant upfront investment on these technologies.
To equip its franchise partners to address SMB customer needs, Utility is launching its "Beyond Managed Services" program, through which partners can leverage the company's sales and marketing resources, NOC, CRM software, financing, help desk, service best practices and assistance with human resources.
Partners also can offer their customers access to the Utility Service Center, a remote support Web portal for users looking for support and remediation.
Participation in Beyond Managed Services, said Janice Siddons, vice president and general manager at Utility, has the potential to generate 20-percent profit margins for partners. Utility has removed the risk and time requirements typically associated with trying to adopt a recurring-revenue model, said Siddons, who also is a former N-able executive.
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Scott, a pioneer of the managed services model, said he is confident the market is ready for the Utility approach because it gives solution providers a way around the investment and business transformation challenges typically associated with adopting the managed services model.
"Will people get it? People absolutely will get it. This addresses a lot of the problems we see in the market," he said.
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