If You Think It's Hype, You'll Miss the Boat
I can almost see the eye rolls as I embark on yet another fast-food dissertation of managed services. It seems calling the managed services phenomenon "hype" has become sport in some quarters, and the thinking appears to be that the more you call it hype, the more it will be perceived as such.
But that's nonsense.
And here's why: MSPs (managed services providers) are starting to report that increasingly the demand for managed services contracts is coming from end users. That anecdotal evidence is backed up by independent research and the number of requests the MSP Alliance, of Chico, Calif., gets from users seeking MSP referrals.
Do IT Smarter, the San Diego-based MSP that a year ago decided to reinvent itself as a sort of services distributor to other MSPs, reports that 25 percent of the channel companies with which it has been partnering for the last three or four months are looking to offer managed services because their customers are demanding it.
Do IT Smarter hosts the SilverBack Technologies managed services platform for its partners, as well as subscription-based help desk, e-mail security, managed firewall services and remote data backup.
Customers don't necessarily employ the term "managed services" in their requests, but they have become familiar with the concept of managing and monitoring systems remotely. And as they look to cut costs and improve the performance of their systems, customers are embracing the concept more and more.
ThinkStrategies, the research firm in Wellesley, Mass., has found that managed services are gaining acceptance at large companies more quickly than in the SMB (small and midsize business) market. This explains why a good number of small VARs who focus on the SMB market and are looking to adopt the managed services model have found the process more difficult than they originally anticipated.
Of course, some VARs who jumped on the managed services bandwagon early on did not do their due diligence and found they weren't really prepared for the move.
Those VARs share the blame for this with vendors of managed services tools that didn't quite understand what it would take to support their channel partners. Not surprisingly, that is changing now because experience is your best teacher. And the vendors realize that failing to support their partners will drive those partners to the competition.
But despite the unmet promises and early fiascos involving managed services, the model is making headway. The number of customers looking to offload IT responsibilities to third parties is increasing. A survey published by Merrill Lynch in January found that CIOs are looking to shift more resources to consultants and integrators, and I can think of no good reason why those "consultants and integrators" can't be MSPs with a sound value proposition.
Seventy-two percent of CIOs reported allocating more resources for the channel in 2007, up from 46 percent in the third quarter of 2006 and 58 percent 12 months earlier, according to the survey. Lamentably for the domestic channel, some of that money is headed offshore.
But not all. Though the Merrill Lynch study doesn't specify managed services, it's a safe bet that some of those CIOs are considering engaging MSPs. Certainly, the experience of companies such as Do IT Smarter, and the evidence gathered by ThinkStrategies and the MSP Alliance would seem to suggest so.
So call it hype if you must. But when your customers start receiving overtures from competitors who offer managed services, don't be surprised if those customers bid you farewell. They might just be among those customers who are considering offloading their IT responsibilities to a provider.
Pedro Pereira is editor of eWEEK Strategic Partner. He can be reached at email@example.com.