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The Cornerstones of Managed Services: Getting Exactly What Your Business Needs

By Todd Sharp


We�ve all heard the phrase, �everything old is new again.� While the current slate of industry offerings under the managed services provider (MSP) banner traces its basic roots back to the ASPs of the late �90s and even to the (dare I say it?) centralized service bureaus offered two decades before that, today�s MSPs offer a far richer selection of products and services than ever before.

Organizations large and small, single and multi-location, with in-house or outsourced IT staff, must closely consider the advantages and benefits available from leveraging MSP offerings currently in the marketplace.

What is an MSP? Companies using the MSP tag today range from traditional system integrators, perhaps providing remote monitoring and support services (often VARs), to single application vendors provided through a hosted offering (think remote backup or hosted CRM software). They also include application-agnostic providers (ISPs or collocation centers) and those with a more highly evolved offering � those providers combining the efficiencies of centralized hosting, the flexibility of a traditional integrator, and the in-depth expertise of a professional services firm, most often grounded around a range of blended horizontal or vertical applications for business.

In contrast to past incarnations, MSPs today, regardless of focus, have the power of bandwidth, remote access, and Web services on their side, giving them the ability to deliver increased capabilities with continuity to a wide range of customers. At the same time, they are able to shield these customers from the cost and complexity inherent in the enterprise solutions they adopt.

So, what�s an organization to do?

In the race to quickly and properly identify any given opportunity as either a threat or boost to competitiveness, organizations often face a challenge that all too easily may boil down to a decision between resource allocation and business capability. Unfortunately, the downsizing and offshore trends taking root within the first decade of the early 21st century often press decision makers into deciding between a perceived need for internal capabilities (need for headcount) and the desire to outsource to receive the benefits of technology adoption without the burdens of scope creep (with respect to internal IT�s core competencies.)

An organization must, therefore, evaluate its own needs within the context of service offerings not only rapidly, but objectively as well. It must reach a decision enabling the organization to increase its overall competitiveness by permitting the best blend of many critical factors.

To provide an answer in a systematic manner while demonstrating the appropriateness of any given decision to stakeholders across functional groups, it is often useful to break the evaluation down into cornerstones of evaluation � competency, continuity, cost, and capability.

The term competency, within the context of the evaluation of an MSP, is not meant to be applied only to technical acumen, training, or certifications. When evaluating whether or how an MSP�s offering may benefit an organization, it is often useful to provide equal weight to intimacy and flexibility, with respect to an MSP�s ability and record for addressing business needs of its customers, should be given equal consideration. If you needed a cookie cutter solution just like �anyone else,� you could browse to �Joe�s Web application warehouse,� run through a few clicks, enter your corporate credit card, and be online enjoying the benefits of your new whiz-bang application. Although that may work with some applications, MSPs are set up to provide greater value.

Service providers of all types, although some might love you to think otherwise, are susceptible to service outages from time to time. Regardless of how many redundant connections, power sources, servers, SLAs, and 24-hour staff a service provider offers, occasionally, they may nevertheless be vulnerable to some traumatic issue. What is more important is their track record for uptime, their responsiveness to issues reported, as evidenced by customer references and their procedures for minimizing even the smallest chance of an outage. Therefore, it is incumbent upon you to ask the tough questions. Invest time in touring facilities. Ask for increases above standard service level guarantees, if necessary, even if it comes at an increased price. Finally, make certain any MSP has reference customers.

You can�t have a return on an investment without the ability to quantify the cost. In most cases, costs involved for trial programs, pilots, or through promotions do not hold true through long-term arrangements, so it is critical to project real costs across multi-year arrangements. Although it is critical to have clearly defined criteria for acceptable levels of service, it is equally important to quantify, as objectively as possible, both the hard and soft dollar costs required to adopt an apples to apples solution in-house. Perhaps your team is ready to accept new technical challenges, but is the business ready to support them while they come up the learning curve? What are the savings over not having to pay licensing and maintenance over a three-year term? How much time will your staff spend installing and maintaining this new source of competitive advantage if installed on premise? How protected are you from price escalations, should your service provider make adjustments down the road?

In the end, if the service provider offering doesn�t deliver additional capabilities into your organization either by offloading responsibilities, adding capabilities, enhancing available features, decreasing incremental cost, or increasing business velocity (defined as a business� ability to change its acceleration � increasing or decreasing usage as needed to adjust to business conditions, as opposed to business inertia � the tendency to remain in its current state) then it may not be the right solution or the right time for an organization to begin leveraging the strengths of an MSP within its operation. Just as revenues and expenses fall to the bottom line, so must the net capabilities an organization receives from working with an MSP.

By carefully quantifying and evaluating these four cornerstones against an organization�s needs and an MSP�s offerings, an organization illuminate the benefits of making the choice to embrace an MSP as part of the daily operations. Although many organizations perceive diminished capacity in outsourcing certain functions, the industry is growing rapidly because of the simple fact that a well run MSP can provide the four Cs, often at a service level higher than available from commercially reasonable resource allocations within any single organization. Particularly within the SMB sectors, adopting MSP offerings as part of an overall strategy can lead to superior, predictable, sustainable advantages. IT

Todd Sharp is Director of Engage, Incorporated. For more information, please visit the company online at

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