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Using an MSP is not the same as outsourcing

March 23, 2015 1 comment

Managed Service ProviderThere is a common misconception circulating that using a managed service provider (MSP) is outsourcing. It isn’t. A good working definition of outsourcing is, “To surrender an aspect of your company’s functionality to a third party.” For example, if you hire an outside firm to take care of your computer support, you have outsourced computer support because no one in your company participates in that activity.

However, MSPs do share some common benefits with outsourcing, so the confusion is understandable. Some of the shared benefits are:

  • Cost savings
  • Ability to focus on core business
  • More competitive
  • Faster expansion

The most often quoted reason for using an MSP or outsourcing is to “save money.” Using a third party for certain types of work does lead to some cost savings because you have fewer employees, you don’t purchase hardware, you don’t pay for power, and you don’t have to worry about physical security of purchased assets.

Outsourcing [from Wikipedia]

In business, outsourcing involves the contracting out of a business process to another party (compare business process outsourcing). The term “outsourcing” dates back to at least 1981. Outsourcing sometimes involves transferring employees and assets from one firm to another, but not always. Outsourcing is also the practice of handing over control of public services to for-profit corporations.

Products and services purchased from third party vendors allow you to focus on your core business, which is probably not maintaining and supporting racks of servers, network equipment, and patching operating systems and applications. You can focus more on manufacturing, selling, and marketing your actual products and services. Unless you’re in the IT business, using a third party vendor makes sense.

You can be more competitive in the market by concentrating your resources on your priorities, your research, your development, and your competition. Global markets change rapidly. Business requirements change rapidly. And your business must change rapidly too. To change with business tides, your business needs to be as agile and as lean as possible. MSPs and outsourcing make this agility possible.

Now, that you have a feel for how MSPs and outsourcing are similar, it’s time to explore the differences so that you can clearly see that using an MSP is not outsourcing.

The features that differentiate MSPs from outsourcing

  • Control
  • Fixed costs
  • Pay-as-you-go/grow
  • Extension of your business
  • Increased flexibility

Outsourcing is a release of control, whereas an MSP allows you to exert a great deal of control over your leased infrastructure and services. Control is one of the major benefits of using an MSP over outsourcing. If you require too much control, outsourcing becomes cumbersome and the trend toward bringing the work back in-house is usually the next step in regaining control. The reason is that exerting control over a third party service or personnel is very difficult to do in that the personnel performing the work are not your employees and therefore you have little enforceable control over them.

Outsourcing usually affords you a set of services for an amount of labor. Depending on the contract that you have with the outsourcing company, you might never know what your monthly charges are going to be due to changing needs. For example, if you outsource your desktop support, then you’re charged an hourly rate based on the visits and work performed by the outsourcing company’s employees. There’s no way to predict from one month to the next how much service you’ll need. MSPs charge a subscription that changes only when you add or remove services or products from your inventory. You can predict what your fees will be for the foreseeable future.

Having a fixed set of costs also allows you to plan for growth in your projects and in your budget predictions. It’s easier to plan your business needs around these fixed costs and pay as you grow. The pay-as-you-go/grow plan is exciting for businesses because it allows you to better manage growth and to expand when ready.

An MSP is an extension of your business, not simply a service that you call on an as-needed basis. The MSP is always there, working in the background to maintain your systems, to keep its service levels high, and to retain your business. The MSP’s success is tied directly to your success and its ability to perform helps your business to succeed. The MSP and your business are not mutually exclusive to one another. The relationship is a symbiotic one where both parties benefit from the other’s successes.

Finally, the MSP is highly flexible. You can augment your in-house infrastructure by using the MSP as a disaster recovery setup and you can phase in its use as your internal systems go off lease or are ready for a refresh. The MSP is there and ready to take on your capacity at will in an on-demand fashion. When you’re ready to go “all in,” you can do so without hesitation. The MSP will also help with your transition by providing consulting and other services to make the move smooth and without significant downtime.

Using an MSP is not outsourcing.  An MSP acts an extension of your business, allowing you to better manage your budget, to leverage a modern infrastructure, and to efficiently handle business expansion.

IBM_logoThis post was brought to you by IBM for Midsize Business and opinions are my own. To read more on this topic, visit IBM’s Midsize Insider. Dedicated to providing businesses with expertise, solutions and tools that are specific to small and midsized companies, the Midsize Business program provides businesses with the materials and knowledge they need to become engines of a smarter planet.

IBM makes it easy for Managed Service Providers

March 6, 2015 Comments off

Managed Service ProvidersIBM’s Technical resources for Managed Service Providers (MSPs) makes it easy for MSPs to stay up to date with the latest technology and trends in the marketplace. Midmarket companies continue to turn to MSPs to manage their infrastructures and IBM’s Partner Program supports the ever-growing number of clients and the increasing complexity of supporting those clients.

IBM has setup a Managed Service Provider area to assist MSPs grow their businesses and their offerings.

Featured resources for MSPs:

  • Power Development Platform (fka Virtual Loaner Program)
  • PartnerWorld University
  • Training
  • Virtual appliance factory
  • IBM Innovation Centers
  • IBM technical validations

The Power Development Platform (PDP) and the Power Development Cloud enables developers by offering no-charge, remote access to IBM hardware, including IBM POWER8, IBM POWER7+, and IBM POWER7 processor-based systems. Developers also have their choice of Linux, IBM’s AIX, and IBM’s i operating systems. However, developers please note that the PDP is for development, porting, and functionality testing only.

Develop, test, and certify your applications free of charge on IBM Power Systems.

The goal of the PDP is to allow developers access to try Linux on Power Systems to create scripting or interpreted language-based applications demonstrating that applications will run as is with no code changes. And 95 percent of Linux x86 applications written in C or C++ port to Linux on Power Systems with no code changes.

With the PDP LPar, you get full root access, vCPU, disk, and networking to fully test your applications on live systems.

IBM’s PartnerWorld University is an online collection of educational materials for IBM partners that includes Solutions, Systems, Sales & Finance, Services, Software, and Industry Solutions Colleges. To gain access to the site, you have to register with your IBM ID and password.

For example, in the Software College, you can access a collection of IBM software product information such as Lotus, Rational, Tivoli, WebSphere, business analytics, information management, and other IBM branded industry solutions. Access more than 1,000 web lectures that cover IBM products and services.

As stated above, IBM partners have access to a huge repository of resources for IBM products and services. However, there are times when an MSP requires a deeper dive into a particular technology. For those needs, IBM provides deeply discounted training and certification tracks to its partners. Some of these opportunities include IBM’s Think Academy, a professional certification center, and Innovation Centers.

You can earn industry valued certifications on IBM software, hardware, PureSystems, solutions, and associated technologies. Check out the list of certification products available to you through the program.

IBM’s 40+ Innovation Centers offer many no-charge seminars, workshops, and training sessions conducted by subject matter experts in its worldwide locations.

Take deep dives into topics such as: Cloud, Big Data and Analytics, Mobile, and Social.

The Virtual Appliance Factory (VAF) is a process and methodology along with tools to help independent software vendors (ISVs) prepackage application solutions for deployment in KVM and IBM PowerVM virtualized environments. The VAF is a set of Web 2.0 tools for you to use to create your virtual appliances. Additionally, you also receive educational materials and access to other resources to accelerate your appliance creation and deployment.

The VAF features several benefits including minimal investment for entry into cloud computing, the capability to create virtual appliances that are readily deployable into DMTF OVF compatible data centers, and enables your business to take advantage of the cloud’s automation, self-service, and agility features.

The IBM technical validation area offers its partners the ability to test your products using IBM solutions, integration assistance, and development assistance during the validation process. You also gain valuable exposure to other IBM partners and may earn the right to display IBM marks in your packaging and marketing materials.

Partnering with IBM helps MSPs capitalize on new market opportunities, offer new services, provide excellent support, and have access to IBM’s expertise and resources making it easy for MSPs to grow and to be successful.

IBM_logoThis post was brought to you by IBM for Midsize Business and opinions are my own. To read more on this topic, visit IBM’s Midsize Insider. Dedicated to providing businesses with expertise, solutions and tools that are specific to small and midsized companies, the Midsize Business program provides businesses with the materials and knowledge they need to become engines of a smarter planet.

MSPs and you: When service levels meet requirements

March 2, 2015 Comments off

“Logic clearly dictates that the needs of the many outweigh the needs of the few.” –Mr. Spock, The Wrath of Khan

Managed ServicesAs Managed Service Providers (MSPs) move more into the mainstream, business customers will have to learn to strike a balance between service requests, service levels, and service requirements. There doesn’t have to be a communication breakdown between parties, but there often is when service levels collide with requirements. Most MSPs distinguish themselves from standard hosting companies by providing several avenues for the business customer to submit requests, troubleshoot problems, and resolve outages that affect business continuity.

Most MSPs have Network Operations Centers (NOCs) that monitor and manage outages and alerts on a 24x7x365 basis as part of their overall service level agreement with the customer. Many have Help Desks that are staffed around the clock or during extended business hours. And in the case of maintenance windows, planned outages, and patching, MSPs notify customers in advance. However, emergency patching, unplanned outages, and loss of service are part of any IT-related business.

The MSP Alliance defines managed services in the following way:

“Managed Services is the proactive management of an IT (Information Technology) asset or object, by a third party typically known as a MSP, on behalf of a customer. The operative distinction that sets apart a MSP is the proactive delivery of their service, as compared to reactive IT services, which have been around for decades.”

As stated in the definition, it is the proactive service delivery that often creates problems between MSPs and their customers. Proactive delivery can mean downtime for customers to apply critical patches or to perform required maintenance.

This post uses the following definitions for service requests, service levels, and service requirements:

  • Service requests – requests by the customer for some type of service from the MSP.
  • Service levels – expected, and agreed to, response times and activities that are part of the paid for service.
  • Service requirements – regular maintenance, planned down times, patching, security requirements, regulatory compliance, and confidentiality.

For example, if your service experiences a security breach, the MSP may take your service offline until the situation is resolved. Typically the MSP will notify you of the breach and of the in-progress repair. The MSP has other business customers that can’t be put at risk by your compromised service.

The MSP has a service agreement with every customer and you have to realize that your service is no more or less critical than any other, that is, unless you’re paying for a premium level of service with guaranteed response and delivery. Does this all mean that the MSP can ignore your needs or service requests? Certainly not, but you have to understand that the MSP is your business ally, your business partner, and your business advocate. But, they also work for the good of all their customers.

When comparing MSPs, find out which upstream partnerships they’ve formed. In other words, educate yourself on who’s responsible for assisting your MSP with their infrastructure. Who are their partners? What are their service levels? What is their guaranteed response time from vendors during an outage?

Whether you’re looking for Infrastructure-as-a-Service, Platform-as-a-Service, or Software-as-a-Service, find the right partner for you.
IBM_logoThis post was brought to you by IBM for Midsize Business and opinions are my own. To read more on this topic, visit IBM’s Midsize Insider. Dedicated to providing businesses with expertise, solutions and tools that are specific to small and midsized companies, the Midsize Business program provides businesses with the materials and knowledge they need to become engines of a smarter planet.

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