Make Managed Services More CompellingBy John Moore | Posted 2005-05-16 Email 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.
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.