Make Managed Services More Compelling

By John Moore  |  Print this article Print


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Opinion: Resellers that merely rebrand a service can't expect to impress customers. Customizing a third-party service or building your own can build loyalty and a substantial revenue stream.

In recent years, more resellers have latched onto the concept of offering managed services as well as their traditional integration and support.

The main draw is the potential for an ongoing revenue stream from service customers as well as a higher revenue-per-customer.

Managed services are not just a business opportunity, but a matter of survival for resellers battling shrinking margins and competition from online retailers.

But some resellers only offer someone else's managed service, and sell it only occasionally as an add-on item.

Efforts to customize the service end at rebranding, so it doesn't offer a particular differentiator for the reseller. The managed service may be loosely tied to the reseller's core business, if at all.

Softchoice Corp., a Toronto-based technology supplier, discovered that managed services require a bit of packaging.

About two years ago, the reseller launched an asset analysis service it dubbed LiveInventory.

The service failed to take off initially, although it offered customers the ability to rapidly discover its population of servers, desktops, notebooks and other computing tools.

The company's response was to wrap additional services around LiveInventory.

For example, Softchoice now offers TechCheck, an asset management service that compares a customer's existing IT policies with a baseline inventory that shows where things actually stand. The inventory is generated via LiveInventory.

As part of TechCheck, Softchoice helps its customers through a gap analysis that identifies risks and recommends solutions to address any shortcomings.

In a similar fashion, Softchoice has built a licensing compliance service around LiveInventory.

Customers find those types of services compelling, according to Edwin Jansen, corporate marketing manager at Softchoice.

"It's not just rebranding," he said. "You have to make an investment in that service."

It also helps if the service can be connected to the reseller's "unique value," according to Jansen.

He said he looked at the possibility of providing security and systems management managed services, but those were deemed to fall outside the company's core value proposition.

On the other hand, Softchoice could more readily draw the line of logic between the asset management service and its role in identifying and removing risk from a customer's procurement process.

"We look at managed services to create a stronger differentiator and provide more value to the equation," Jansen said.

Another item on the managed services checklist: examine the third-party service thoroughly before staking your reputation on it. Customers rely on the reseller to vet the service, Jansen said.

"We feel it is important that you look closely at a company," he said. "Is it going to be around tomorrow?"

Resellers should consider such factors as the managed services firm's financial situation and channel model, Jansen noted.

Softchoice's managed services strategy has helped propel product sales, Jansen said. The company last month reported first quarter revenue growth of 34 percent.

Softchoice demonstrates the possibilities of retooling a service that many other companies could potentially sell into a point of differentiation.

It's a transformation that takes more time and effort that slapping a clever name on a service.

But if you're going to build the kind of ongoing relationship a managed service requires, the results justify the investment.

John writes the Contract Watch column and his own column for the Channel Insider.

John has covered the information-technology industry for 15 years, focusing on government issues, systems integrators, resellers and channel activities. Prior to working with Channel Insider, he was an editor at Smart Partner, and a department editor at Federal Computer Week, a newspaper covering federal information technology. At Federal Computer Week, John covered federal contractors and compiled the publication's annual ranking of the market's top 25 integrators. John also was a senior editor in the Washington, D.C., bureau of Computer Systems News.


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