With Managed Services, Customers Win Too

And that's what he expected when he met with Netfusions Managed Services, a provider of remote IT management and monitoring services. Fasold was in for a surprise.

"They didn't come in trying to sell us something we didn't need. They came in and took a hard look at our business," said Fasold, who is the general manager for Capital Enterprise, a $30 million wholesaler in Lansing, Mich., that supplies prison commissaries.

"Most IT companies come in with their PowerPoint presentations and they do all the talking. Netfusions came in and said, 'Tell us about your company.'"

Fasold's experience with Netfusions represents the new thinking in the IT channel: Acquiring a deep understanding of the customer's business and its IT needs before pushing any technology or services is crucial. Proponents of managed services say this way of thinking is fundamental to the model's success.

Abizer Rasheed, CEO of Netfusions and 24x7Managed.com, in Keego Harbor, Mich., calls it a transformation of the relationship between IT services provider and client into a win-win proposition from a win-lose reality.

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Through managed services, providers remotely take over some or all of their clients' IT functions and charge them monthly fees for the service.

In the old break/fix model, the provider wins when the client loses. Downtime at a customer site translates to revenue in the IT services provider's books.

But with managed services, Rasheed said, both the client and the provider win.

Through remote management and monitoring of customer computing environments, the provider enjoys predictable recurring revenue and the client gets predictable service. And that includes prevention work, the absence of which has traditionally been at the center of the win-lose relationship between providers and clients.

Rasheed said he hopes the message about the new channel thinking will resonate not only with customers but also with VARs and integrators looking to secure the viability of their businesses.

Netfusions offers a host of management and monitoring services built on a platform developed in-house. Rasheed said the company decided to develop its own platform after evaluating other available solutions and concluding that they fell short of the right price points and functionality. The company also built a NOC (Network Operations Center), from which it hosts the solution.

Capital Enterprise was Netfusions' first client, and the deployment took place late last year.

"It's worked out really well," Rasheed said. "It's converted their IT budget into a predictable spend. The client's IT hours have dropped tremendously."

Click here to read more about Level Platforms' contribution to managed services.

Rasheed is pitching the Netfusions technology under the name 24x7Managed.com to other VARs and integrators looking to do managed services. He has approached about 10 prospective partners, he said, telling them they can expect margins of at least 35 percent by using his platform to deliver managed services.

He said he expects to sign up the first partner soon, and that it likely will be Custom Information Services of Arlington, Texas.

Custom Information Services started moving to a managed services model about five years ago, before tools for remote systems management and monitoring were widely available, said CIS Vice President Richard Ayers.

"Our organization is a pioneer in the SMB [small and midsize business] market for those services. It is nice to see those tools finally coming down the pike," he said.

The company already uses Level Platform's technology to deliver managed services to businesses with up to 50 computer users. 24x7Managed.com, Ayers said, will allow his company to extend the services to larger clients.

Tasks that Custom Information Services plans to handle for clients through the platform include anti-virus updates, inventory management, unattended system defragmentation and day-to-day server administration, Ayers said.

24x7Managed.com is vying for channel partnerships against more established brands such as N-able Technologies and SilverBack.

Rasheed said he is confident about his partnership prospects because 24x7Managed.com has the leg up on some functions against competitors. For instance, it offers monitoring for mobile users whose main link to the network is their laptops.

"Our solution actually allows us to scan those systems as long as they're connected to the Internet," Rasheed said.

When approaching prospective partners, Rasheed said, he tries to assess whether they are ready to adopt the managed services model and whether they have a viable client base. He also evaluates whether they believe in the model and that it could work for them.

"I'm not interested in preaching the gospel or changing people's mind-set," he said.

Rasheed said he expects to have five partners using the platform by the end of April. 24x7Managed.com will take a methodical approach to signing up partners, working out any potential kinks before attempting to expand its partner ranks, he said.

24x7Managed.com and Netfusions are offshoots of a channel company, Computers & Concepts, founded in 1983 by Rasheed's father. The company has undergone two profound transformations along the way to adapt to market changes, first from a retail to a more services-oriented focus to meet corporate needs, and now to the managed services model.