You Don’t Need To Be A Managed Services Provider

July 11, 2008

By Peter Sandiford, ChannelPro

You’ve all heard the message: Transform your business to managed services or die. It will be painful. To be successful with managed services, you will need to say good-bye to your old business because it just won’t work anymore. Even if you have been in business for 10 or 15 years and built a successful company doing a great job of servicing your customers, sorry; that won’t cut it anymore. All those sleek new managed services providers will come and eat your lunch. And if that isn’t enough, Dell is about to steal your customers with “services direct” after making “product direct” the scourge of every solution provider business for the past 20 years.

And it won’t be easy, this switch to managed services, nor will it be cheap. You will have to change your technicians, change your sales force, and, by the way, 20 to 30 percent of your customers won’t be interested in managed services no matter how wonderful your offering is, so you’ll need to change them too. As absurd as it sounds, “Fire your customers!” has almost become a rallying cry for managed services. Oh, and did I mention that you need to invest in an expensive network operations center (NOC) and learn to write contracts with service-level agreements (SLAs), fixed prices, and penalties?

It is little wonder that many solution providers consider the transition to managed services daunting.

But successful solution providers are proving that there is another way. Remote monitoring and management software is the essential technology underlying managed services. These products enable solution providers to reap enormous benefits by servicing most of their customers’ needs remotely over the Internet. With this technology, solution providers can radically reduce service costs, increase project sales opportunities, and generate low-risk, high-profit recurring revenues while improving both customer service and productivity.

With proactive information about your customers’ systems, you can deliver better customer service. Detailed system health information and trending data enable you to justify new upgrade projects. And remote monitoring and management drastically reduces the cost of delivering service to your customers. Did you hear the phrase “managed services” anywhere in there?

Managed services remains an attractive end goal for many solution providers. But successful channel partners see each business transition as a journey to be taken in a series of small, low-risk, profitable steps. The days of jumping into an all-or-nothing, bet-yourbusiness gamble are over. A significant number of providers reject the idea that managed services as the industry has promoted it is even a worthwhile objective. At the same time, scalable hosted solutions such as those provided by Ingram Micro’s Seismic enable partners to get started with minimal investment and scale to hundreds of customers without worrying about capital costs or the headaches of managing a NOC.

While many solution providers using remote monitoring and management software have evolved their businesses to a classic managed services model, most are using the technology to introduce process improvements that layer on new business benefits to their existing customer models. As they experience the power of remote monitoring and management, they are growing and changing their businesses with highly differentiated service offerings that meet their target customers’ unique needs.

Our company will continue to describe our product as “managed services software” until the industry comes up with a different name to depict the range of new business offerings that were inspired by the power of remote monitoring and management software. Any suggestions?

PETER SANDIFORD is CEO of LPI Level Platforms Inc., an Ottawa-based provider of remote monitoring and management software for small and midsize IT providers.

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