Getting It Right in the Post-Managed Services Era

The IT channel is about to enter the post-managed services era. Much like modernism led to postmodernism in art and philosophy, the managed services model is evolving into a new IT consumption reality.

At the heart of the change is the cloud, and more specifically, how managed services providers (MSPs) choose to proceed into a new technology delivery model with the potential to take many shapes or forms.

MSPs of course are better equipped than anyone else to aggregate and deliver cloud services for customers, having already gone through the transformation from break/fix, deal-focused companies to providers of utility-like remote services. That transformation shifted their focus from remediation to prevention, with remote monitoring and management as the catalyst.

To succeed in the post-managed services world, MSPs once again have to adjust their thinking on three major points that continue to trouble even some of the more successful providers – hardware delivery, business continuity and pricing.

To start with, MSPs will find that adoption of the cloud model is bound to require a more holistic approach than managed services. While some MSPs may have delivered managed services in piecemeal fashion – using hybrid pricing schemes – cloud services require a more comprehensive and calculated approach. Otherwise, pricing is bound to get too complex and threaten profitability.

Even if providers continue to deliver some services outside of the cloud, they need to figure out how to bundle as much of their billing as possible into a fixed payment schedule for clients that brings predictability to IT costs. Ideally, 100 percent of costs would be handled this way, and that would include Hardware as a service (HAAS) – a component of managed services that is often ignored or dismissed as too hard to implement.

Folding hardware maintenance and refreshes into a managed services contract has remained a holy grail of service models. While some MSPs have found the secret to HAAS success, it remains elusive for most. Possibly, the difficulty stems from the IT channel’s background in deal-based transactions, which often came down to winning the business on price.

Providers should be hounding their financing partners, be they financing firms, distributors or the vendors themselves, to develop HAAS programs that will help turn IT provision into a true utility model.

With hardware included in service contracts, pricing should become more straightforward for MSPs, with fees being collected monthly or quarterly, lending predictability to both the customer and the provider.

This is a pricing model providers of remote data backup and recovery services have used for years, with much success. Backup and recovery, of course, are also fundamental to a successful cloud services model. It makes little sense to charge customers every month for IT services without some type of assurance that the precious data used to run their businesses won’t vanish someday in an unpredictable poof caused by some unfortunate event.

While it feels silly to even have to bring up the need for backup and recovery to ensure business continuity in the event of an outage or major disaster, the fact is too many businesses still neglect this important requirement. This is especially the case among smaller companies running on shoestring budgets.

MSPs and cloud services providers should make business continuity a priority for their clients: Make them understand the risks incurred with the failure to implement business continuity centered around automated backups monitored remotely by providers.

In the post-managed services world, remote monitoring and management remains fundamental to services delivery, while simultaneously becoming a component of a more comprehensive cloud services menu. Offerings on the menu – anything from hosted email to infrastructure services – will vary according to provider proficiency, market factors and client requirements, so the possibilities are nearly endless.

A post-managed services approach, however, can only succeed if MSPs get the fundamentals right – pricing, hardware delivery and business continuity.

Pedro Pereira is a columnist for Channel Insider and a freelance writer. He can be reached at pedrocolumn@gmail.com.