Adding New Services to Your Managed Services Offering

By Frank Ohlhorst  |  Print this article Print

The cloud has created a whole new way of business for managed service providers looking to offer more services to their end customers. Here's a look at some specializations you should consider.

The acronym MSP (Managed Services Provider) has taken on a life of its own in the channel. There are those who associate the term with little more than hosted management of PCs and Servers while others have no clue as to what an MSP really is.

Many solution providers seem to assume that becoming an MSP is somewhat limiting, transforming a business into little more than a provider of boutique services that handle the maintenance and management of IT equipment. However, that assumption is wrong. Today, becoming an MSP opens up a wide realm of profitable services previously unimagined, even by managed services pioneers.

So, what has changed? In a single word: cloud. Today, most any service can be had via the cloud – from storage to desktops to enterprise applications. What’s more, new services are popping up every day, including platforms as a service, business social networking and even disaster recovery.

The interesting thing here is that all of those services need some form of management or at the very least, federation, and no one is better equipped to deliver that than a channel savvy MSP. Nevertheless, it is a big world of services out there and a solution provider can only do so much. So, how does one grow their MSP business to include additional services?

It all comes down to focusing on what you already know and turning that into a service that yields a recurring revenue stream. In other words, do not take on unacceptable risk. For example, the typical solution provider has a core competency, such as networking or security or application development. Expanding that core competency into a service can be a straightforward process, simply because you are working with what you already know, just with a new service delivery mechanism.

Security (and forensics) are a perfect example here. Many solution providers have focused on the firewall and intrusion prevention markets as a way to demonstrate expertise and derive profits – however, those technologies prove to be very expensive for the end customer and in some cases, a hard sell because of the sheer initial capital expenses involved.

And ironically, that is what creates a service opportunity. How so? Well, there are multiple paths a solution provider could follow to turn that into a managed service. The first path leans heavily on how things have been done in the past, and that is to deploy a physical appliance to the customer site and then remotely manage it – in itself, a managed service, but not quite what an MSP delivers. The transformation on this first path comes into play when the solution provider seeks to change the billing paradigm from a capital expense to an operational expense – here, the solution provider can perhaps turn to leasing to provide the equipment and then a service contract to monitor, manage and maintain the solution.

Ultimately, that path could prove the simplest to get into a managed services style of operation. However, there are a few caveats – the first is to make sure the vendor you work with offers leasing, a "hoteling" capable management console and policy based management. Vendors to consider include Cisco, Palo Alto Networks, Sonicwall, Check Point, HP, and a few other big names (and some little ones as well). Most, if not all, offer methodologies to manage multiple sites as independent entities.

Nonetheless, that is only one path to pursue in the world of managed security – several new companies are offering an alternative path – namely, hosted security. With that paradigm, all of the security processing takes place at a host’s site, and all traffic between the host and the customer is encrypted. Case in point is Cloud Passage, a hosted service that falls under the moniker of security as a service. Cloud Passage works by enforcing security policy on connected hardware and keeping software patched, as well as examining traffic, all of which is done via the cloud. With Cloud Passage, a solution  provider could build a security services offering and spin that into a managed service. Of course, Cloud Passage is only one example. More seem to pop up every day.

Security is only one of the possibilities out there for a solution provider – even pedestrian technologies, such as PC desktops, applications and backup are all now available for transformation into a managed service. Take for example CharTech, a company that bills itself as a "hardware as a service" vendor. Chartech offers their BDR appliance, which is designed for backup and disaster recovery. The BDR unit is available under a monthly contract and provides automated onsite backup, with a twist – the backup is replicated to cloud storage – providing an offsite element, one that protects in the case of a loss of facility or regional disaster. Chartech also incorporates virtualization technology as well, allowing a backed-up server to be transformed into a virtual server – either on the appliance or in the cloud. The company is working closely with the channel and should prove to be an easy way to move into the realm of cloud and managed services.

Other cloud services to consider include a newer category, Desktops as a Service (DaaS), where a virtual desktop, with all of the customer’s applications, is hosted in the cloud. Solution providers leveraging that concept can build complete virtual networks, with desktops, applications, security and almost anything else a business could need and then offer that as a bundle to customers as a managed service. Vendors to look at include Desktone, Wipro and yoodos.

Some solution providers may want to pursue the idea of federating hosted services into a viable, centrally managed offering. However, building federated services requires extensive integration and most importantly, a platform that incorporates management. That is where PaaS (platforms as a service) comes into play. With PaaS, solution providers are able to deploy a hosted platform that incorporates other services, customized to a particular client’s needs. Here, vendors such as OS33, SalesForce, Cloudbees, Cloudfoundry and dozens of others offer hosted platforms that can be customized and tuned for specific needs. Other vendors, such as IBM, Skydera and Cloudswitch offers ways to integrate dissimilar cloud services into a heterogeneous offering – which proves to be the key for building custom offerings using readily available services.

Of course, any of the above-mentioned offerings or concepts will require PSA (professional services automation) to keep costs down and meet customer needs. Luckily, PSA in the cloud is now a reality for solution providers, where all of the project management, support and even billing can be streamlined to enhance efficiencies, improve services and build higher revenue. The channel can turn to vendors such as Connectwise, OpenAir, Autotask, Tigerpaw and dozens of others to wrap PSA around MSP services.

The lesson here is that transforming your solution provider business into a MSP is not a business-limiting move, but a way to create new services, revenues and solutions with the newest technologies, without having to completely reinvent your operations.




Frank Ohlhorst Frank J. Ohlhorst is the Executive Technology Editor for eWeek Channel Insider and brings with him over 20 years of experience in the Information Technology field.He began his career as a network administrator and applications program in the private sector for two years before joining a computer consulting firm as a programmer analyst. In 1988 Frank founded a computer consulting company, which specialized in network design, implementation, and support, along with custom accounting applications developed in a variety of programming languages.In 1991, Frank took a position with the United States Department of Energy as a Network Manager for multiple DOE Area Offices with locations at Brookhaven National Laboratory (BNL), Princeton Plasma Physics Laboratory (PPL), Argonne National Laboratory (ANL), FermiLAB and the Ames Area Office (AMESAO). Frank's duties included managing the site networks, associated staff and the inter-network links between the area offices. He also served at the Computer Security Officer (CSO) for multiple DOE sites. Frank joined CMP Technology's Channel group in 1999 as a Technical Editor assigned to the CRN Test Center, within a year, Frank became the Senior Technical Editor, and was responsible for designing product testing methodologies, assigning product reviews, roundups and bakeoffs to the CRN Test Center staff.In 2003, Frank was named Technology Editor of CRN. In that capacity, he ensured that CRN maintained a clearer focus on technology and increased the integration of the Test Center's review content into both CRN's print and web properties. He also contributed to Netseminar's, hosted sessions at CMP's Xchange Channel trade shows and helped to develop new methods of content delivery, Such as CRN-TV.In September of 2004, Frank became the Director of the CRN Test Center and was charged with increasing the Test Center's contributions to CMP's Channel Web online presence and CMP's latest monthly publication, Digital Connect, a magazine geared towards the home integrator. He also continued to contribute to CMP's Netseminar series, Xchange events, industry conferences and CRN-TV.In January of 2007, CMP Launched CRNtech, a monthly publication focused on technology for the channel, with a mailed audience of 70,000 qualified readers. Frank was instrumental in the development and design of CRNTech and was the editorial director of the publication as well as its primary contributor. He also maintained the edit calendar, and hosted quarterly CRNTech Live events.In June 2007, Frank was named Senior Technology Analyst and became responsible for the technical focus and edit calendars of all the Channel Group's publications, including CRN, CRNTech, and VARBusiness, along with the Channel Group's specialized publications Solutions Inc., Government VAR, TechBuilder and various custom publications. Frank joined Ziff Davis Enterprise in September of 2007 and focuses on creating editorial content geared towards the purveyors of Information Technology products and services. Frank writes comparative reviews, channel analysis pieces and participates in many of Ziff Davis Enterprise's tradeshows and webinars. He has received several awards for his writing and editing, including back to back best review of the year awards, and a president's award for CRN-TV. Frank speaks at many industry conferences, is a contributor to several IT Books, holds several records for online hits and has several industry certifications, including Novell's CNE, Microsoft's MCP.Frank can be reached at frank.ohlhorst@ziffdavisenterprise.com