So you want to be an MSP? Before rushing headlong into managed services, take some time to understand what it really requires and the issues facing the sector.
The definition
Communicating technical ideas to non-technical people is a common challenge of IT service providers. Unfortunately, managed services, like so many terms in IT (cloud, BYOD etc), can hold many definitions. For the purpose of this article and to encompass as many interpretations as possible, I will simply view "managed services" as a defined set of services billed at a fixed (or close to fixed) ongoing rate.
Although there tend to be only subtle differences in the various definitions, it is important that both provider and customer are on the same page. Different interpretations of the nuances could mean an engagement is doomed from the start. What is delivered? What is the cost? What is not included?
The appeal
The provider's and the customer's interpretations tend to be biased toward how it will benefit them. The provider thinks, “This will make me money”. The customer thinks, “This will save me money”. In other words, it’s appealing for both parties. (Someone is clearly doing a good job in marketing the MSP model.)
On paper, the theory seems sound. It goes something like this. From a service provider business valuation proposition, it is very favourable to hold large numbers of recurring revenue contracts and so business owners are very keen to pursue these. From a client point of view, unplanned bill spike is the enemy to cash flow and removing these with a predicted IT spend can aid budgeting and minimise risk.
The Remote Monitoring and Management (RMM) vendors will explain how their software can even fix issues automatically as soon as they occur. The customer gets immediate resolution and I, the supplier, didn’t even lift a finger. We can even get a monthly report that lists all the times we fixed issues. Great! Where do I sign?
The danger
Managed services, like so many other offerings in IT (such as VoIP) can be badly tarnished by poor implementations. When done right, it is fantastic but a poor implementation is terrible for both parties.
The main issue is succumbing to marketing hype and assuming a successful outcome is a foregone conclusion.
For the curious IT service provider, the first step is usually to reach out to various RMM and MSP technology vendors to find the right product to support their new managed services venture. Speaking as an engineer, it is very easy to be seduced by some of the amazing features of these tools and that can end up driving the decision making process.
Of course, with the more advanced feature sets come increased complexity and training costs. It also seems very common for IT service providers to put too much faith and reliance in the tool itself without considering the procedures required to actually implement the tool. This is from a sales, operations and technical standpoint.
I remember a competing IT company that was tendering for the same work as we were. This company proudly announced, “We are now moving to a managed services model so it is in our interest to fix issues as quickly as possible.”
So it wasn’t before?
The reality is that quite often, IT companies rush into the MSP model without having a clue about what they are doing. They offer an organisation tons of bullet points about all the things that they check every month, the backups they check, the restores they test, the wonderful reports they automagically generate.
Unfortunately they have just jumped on the 'insert flavour of month RMM or MSP tool here' bandwagon without fully understanding how to use the tool and most likely the victim to persistent calls from said RMM/MSP vendor (and wow, they are persistent!).
Therefore, the would-be managed services provider doesn't have a clue how to maintain the environment, the promised bullet points don’t actually ever get delivered, the automagically generated reports might fall by the wayside (one, because they are often ugly from an aesthetic standpoint; and two, from an infrastructure standpoint).
The fallout
I’ve seen overstretched IT engineers at MSP firms desperately firefighting to keep things running because they are wrestling with a platform they don’t understand how to use. We have inherited some environments supposedly managed by a fixed-fee MSP model and they were an absolute disgrace.
One site had backups that had been failing for months and the customer hadn’t even been notified. It got worse when we discovered that the reason for the failed backups was due to lack of target disk space and that the server was set to backup to itself!
Unsurprisingly, the customer hadn’t seen that in their monthly report.
They were under the impression that everything was running smoothly; after all they were paying their managed services fee every month.
The issue with the IT industry is that it is unregulated. Any muppet who knows how to access a torrent site can download the answers to a ton of exams, memorise the answers and before you know it, they are a certified engineer, free to get their hands all over the IT infrastructure of an unsuspecting organisation. These cowboys give IT services companies a bad name and many organisations are concerned about getting taken for a ride.
It gets worse too. If the MSP has priced their monthly fees inappropriately, they might be running around keeping various IT plates spinning only to discover that they aren’t even making any money.
To maintain mixed environments with a plethora of IT equipment, we haven't found any one system that actually can deliver on all fronts. In order to maintain the environments to the level required, multiple tools may need to be implemented. The top-tier RMM tools don’t come cheap and if the license, implementation and training costs haven’t been factored adequately, the work and stress may all be for nothing.
When there’s a fixed price for an all-you-can-eat buffet, you’re going to question the quality.
The success
So that’s the bad side. The great side is that when it is done properly, the customer experience is a stable environment maintained within a structured budget. These days a managed services offering is essential. The pertinent detail is how that is explicitly defined.
Don’t succumb to the hype and assume success is a given. Do your research and planning, take off the rose-tinted glassed and approach managed services with open eyes. It’s definitely worth it when done properly.
Ben Corbett is a director of Adelaide-based LeetGeek, which came No.1 in the 2012 CRN Fast50.
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