MSP University Managed Services Blog

2007 Wrap-Up

Apologies for my extended absence – I’ve taken some time off to enjoy the Holidays with my family, and injured my back in the process, so was laid up for a week, but am looking forward to 2008! I wanted to get one last post in – my final one for 2007.

What a year it’s been! We’ve seen much maneuvering in the Managed Services space by Manufacturers, Vendors, Distributors and Service Providers alike – it’s been both exciting and confusing at times keeping up with all of the changes in the IT space that have occurred in the last 12 months.

How have these changes affected your business? Has the consolidation of MSP Vendors and the introduction of Hosted Tools swayed your approach to Managed Service delivery – or adoption? MSPU recently had the opportunity to conduct an informal survey of 400 Solution Providers who are not MSPU Members, and 85% of the respondents indicated that they are currently delivering some form of Managed Services, with only 4% indicating that they have no plans to deliver Managed Services in the future. The vast majority of respondents (89.4%) offer Network Infrastructure Monitoring, with 77% offering Remote Administration and 75.8% offering a Service Desk/Help Desk to their clients.

If the recent MSP Mergers and Acquisitions in the IT space weren’t enough evidence, our survey data firmly convinces me that Managed Services have arrived in a big way, with mass adoption of this Service Delivery Model a reality. I feel a wicked wind blowing for practitioners of the old reactive service delivery model, and foresee many of these providers going the way of the Dodo, if they do not take measures to evolve so as to avoid extinction. Their clients will accelerate this inevitable outcome as their business needs compel them to seek proactive, predictive maintenance and remote service delivery options in order to increase their business efficiencies and uptime, and reduce costs and risk.

This is a given, and 2007 is just a few scant hours away from being another page in history. Did your business plan include transitioning or growing your Managed Services offerings in 2007? What about 2008? Will you be playing catch-up so as not to lose clients to competing MSP’s? Have you lost clients already? I’ve got news for you if you’re in this position – 2008 will become much more difficult for you as you try to catch up to your competition, and incorporate other necessary proactive services to deliver to your clients such as remote backup and storage solutions, managed security and unified communications services, web hosting and co-location and other services that clients need right now – and which are all part of an annuity-based revenue strategy.

It’s time to see Managed Services for what they are – another offering in your overall service deliverables. When we first transitioned, I used to think that Managed Services was a business model unto itself. Wrong. Even though we don’t operate in this fashion, I’ve learned through working with our Partners all over the world that an I.T. business model can incorporate Managed Services as well as Break-Fix Services. For that matter, it can incorporate Repair Depot services, as well as Staffing services, Project work, and whatever else makes sense for the Service Provider to deliver. Granted, each of these deliverables has its own varying degree of profitability, risk, labor and management overhead, but managed properly, they can all be tremendously successful and profitable.

So for 2008 we need to evaluate our businesses from the top down, and by the numbers. We have already begun this process for MSPU and Intelligent Enterprise, and as a result, will be eliminating some services we currently provide, expanding existing ones, and adding completely new offerings for 2008. We’ve identified all of our revenue streams from 2007 and evaluated each of them from the points I mentioned above – profitability, risk, labor and management overhead. The results of this purely objective review will fuel modifications to our 2008 business plan and service offerings.

How do you conduct your yearly business reviews – or do you conduct yearly business reviews? Do you simply do the same thing you did the year before and expect different results? It’s simply not going to happen. Are you a business owner or hobbyist? The manner in which you deliver services to your clients is a reflection of how you run your business – are you a reactive firefighter, or a proactive Advisor? Are you an effective Business Owner, or do you have a job and simply report to work every day? If the latter is the case, you’d be better off working for someone else – you’d certainly have a steady paycheck and vacation time you can count on, as well as much less stress.

2008 will be a pivotal year for IT Business Owners. Times have changed. Clients are much savvier about technology. Newer hardware and software are more reliable and are self-patching and updating themselves without intervention. Large competitors are marketing remote support services to SMB’s and directly competing with us for our target market. Unfortunately, I predict many Service Providers who aren’t Business Owners and Trusted Advisors to simply disappear in the face of these changes. If you haven’t yet, it’s time to put some serious thought into what you want out of 2008 – to continue to build a solid business with great client relationships to whom you’re delivering more and more essential proactive, profitable annuity-based services to…….or not. I hope it’s the former.

Wishing you all a prosperous and exciting 2008!

Erick Simpson
MSP University
www.mspu.us 

Why Do Solution Providers and MSP's Suck at Marketing?

In his recent blog post, Joe Panettieri, Editor in Chief of TechIQ, reports on Larry Kesslin’s views of why MSP’s find marketing so challenging, as voiced at the recent Cisco Marketing Forum in Miami, Florida.

Larry, President of 4 Profit, an organization that serves both Solution Providers as well as Vendors, hits the nail squarely on the head, and offers these 10 reasons that Solution Providers don’t invest in Marketing:

10. Claim: “We have no time to deal with it.” Reality: “I wouldn’t know what to do even if I had the time.”

9. Claim: “I can’t afford it.” Reality: “I don’t have have marketing budget so I rely on joint marketing funds/market development funds as my marketing.”

8. Claim: “I tried it before and it didn’t work.” Reality: “I had unrealistic expectations and wasn’t committed to the outcome.”

7. Claim: “The ROI won’t be fast enough.” Reality: “Should I take profits for myself or make a growth investment outside of my comfort zone?”

6. Claim: “We don ‘t have the staff to manage or implement marketing.” Reality: “No one on staff knows what good marketing looks like so we don’t explore it.”

5. Claim: “No one owns the process.” Reality: “It’s too much work for a staff that has limited expertise in this area.”

4.Claim: “Fear of the unknown.” Reality: “Fear of the unknown being a bust.”

3.Claim: “Uncertain of the message.” Reality: “We don’t have a clear value proposition ourselves.”

2.Claim: “The ROI is uncertain or unclear.” Reality: “How much will it cost and what is the real return?”

1. Claim: “What should we do first?” Reality: “We don’t know where to start, so we don’t.”

How many of you identify with some or many of these attitudes?

These perceptions are the reasons that our Collateral as a Service, Marketing as a Service and Sales Training as a Service are among the most popular among our Partners – because we do all the heavy lifting, and guide them through these unfamiliar processes.

The sooner we as Solution Providers and MSP’s embrace the horror that in order to chart our own destiny and manage and control our growth, efficiencies and profitability, we need to not only develop a consistent marketing strategy, but invest in our marketing.

See the entire article here.

Erick Simpson
MSP University
www.mspu.us 

Want to know how much it will cost Solution Providers to enroll in Dell's Managed Services Program - in order to compete against Dell itself?

Want to know how much it will cost Solution Providers to enroll in Dell's Managed Services Program - in order to compete against Dell itself?

In a new article on eWEEK’s Channel Insider, Jessica Davis writes about her recent interview with former Silverback CEO Dan Phillips, who is now Dell’s channel MSP chief, whatever that means. Mr. Phillips enlightens Jessica to the following:

·         Dell is looking for quality partners in the hundreds, not thousands

·         Silverback had 150 partners before acquisition by Dell, who will be automatically enrolled in the Dell partner program

·         New Dell Managed Services Partners must go through Dell online product training for certification to sell Dell products – Mr. Phillips remarks that “it’s a simple online exam”

·         Dell online product course completion focuses on areas such as Microsoft, Cisco, 3Com, networking and security

·         New MSP’s must pay $8,999 to finish Dell’s Business Builder program, which includes technical training a handful of licenses and sales and marketing assistance, as well as completing the online product training and passing the aforementioned online exam

·         Existing MSP’s must complete a Dell Managed Services audit program, ensuring that the partner has the capability to deliver Managed Services at a certain level to be deemed a Dell Certified Partner – this costs the MSP $4,999

·         Existing Silverback Partners who have completed Silverback training don’t have to do these things

·         Recertification may be required on an ad-hoc basis, and based on the judgments of Dell’s dedicated sales organization for this program

·         Dell will be announcing plans for their direct Managed Services offering to end-user clients shortly, along with other significant announcements through next year

See the entire article here.

I don’t know about you, but I would never trust a technician in our organization to scope, spec, implement, deliver and maintain any end-client solutions after simply taking some online trainings and passing an online exam – come on, is this what Dell believes creates Trusted Advisors? Consultants that are able to build lasting relationships with clients, identify business needs and pain points, and create technology roadmaps to help them improve efficiencies, reduce costs and mitigate their business pains and risk?

Dell’s approach certainly seems one-dimensional from an MSP training perspective. In our experience training MSPs all over the world, we know that there needs to be a multi-faceted training and support structure in order to give Partners the best chance at success. These areas are:

·         Education

·         Training

·         Ongoing Support

See my previous blog on this concept here.

What about the price of admission to get partnered up with Dell, for the privilege to compete directly with them in the future for end-client business (take a look at Dell’s full page advertisement marketing remote technical support to end-clients here). I’d love to know what kind of training $8,999 will buy, and more importantly, who these Solution Providers are that will pay it (for my own selfish reasons!). And what qualifies an MSP for the $4,000 discount.

I wonder just what does that “audit” entail? Even if a Partner does receive an MSP MBA for nine grand – they’ll still be competing with Dell!

The whole thing just doesn’t make sense to me, so I must obviously be missing something….something big. How do existing Silverback Partners get a pass? Did Silverback put their Partners through Dell online product and certification training, and Microsoft, Cisco, 3Com, networking and security training as well?

Questions, questions….

How about the “recertification” possibility? The Dell sales team will be evaluating Partners and deciding who needs to get recycled through the challenging online training and testing regimen (better make friends with those folks fast) and I wonder if that means paying more fees for the sheer excitement of going through boot camp again?

It’s going to be interesting watching how this all unfolds, especially with Mr. Phillips’ cryptic statement that we will be seeing some significant announcements from Dell through next year.

I don’t know about you, but I just can’t wait…

Erick Simpson
www.mspu.us

Ingram Micro Inaugural Seismic Partner Conference Keynote

I had the honor of delivering the Keynote address at Ingram Micro’s Inaugural Seismic Partner Conference in Dallas, TX yesterday.

For a complete copy of my Keynote Address and PowerPoint, click here.

The conference had 135 Ingram Partners registered, and was supported by Vendors such as Intel, Level Platforms, VaultLogix, Autotask and MX Logic. Also conducting presentations were Ingram Seismic Partners, and covering the event was Pedro Pereira, editor of eWEEK Strategic Partner and columnist for eWEEK Channel Insider. For Pedro’s initial article on the event, click here.

I am very impressed with Ingram’s Seismic offerings engineered to help their Partners in the Managed Services model. In addition to training and other offers, Ingram provides services its Partners can use to become more efficient and effective from an operational perspective, as well as many they can resell as Annuity-Based offerings to their clients such as:

·         Remote Monitoring and Management

·         Email and Web Defense

·         Network Operations Center

·         Help Desk

·         Print Monitoring and Management

·         Online Backup and Restore

·         Professional Services Automation

I must say that I was extremely impressed with the makeup of the Partners in attendance. These Partners were there to learn and apply what they learned from the Speakers and Presenters, including Justin Crotty, Vice President, Services Sales, from Ingram Micro. I am very pleased to see how far these Partners, Vendors and Distributors have come in just the last 12 months in the field of Managed Services. We are really starting to stretch our collective legs in this arena, and I mentioned in my Keynote that these were the types of alliances and resources we sorely needed in 2005, when we were trying to figure Managed Services out all by ourselves, through trial and error. We certainly would have been much more successful a great deal sooner had we had these types of resources to leverage.

My Keynote focused on my perceptions of large retailers such as Dell competing directly with Solution Providers for end-client business, and what we can do about it, the effect our current economic situation will have on Solution Providers, and Managed Services Providers in particular, and my recommendations to help Managed Services Providers increase their revenues in 2008. Here are the key takeaways:

2008 will be a good year for Managed Services Providers.

·         Don’t eat your pig all at once – go one leg at a time (you’ll need to be familiar with my 3-legged pig joke to get this)

·         Build deep client relationships as your clients’ Trusted Advisor and outsourced CIO to ward off competitive threats

·         Become Managed Services Ninjas and leverage our competitor’s marketing against them, proving our value over theirs to prospects

·         Leverage our Vendor and Distributors’ services and support offerings, as well as other benefits such as facilities tours and product and solution demos and Marketing Development Funds

·         Expand your annuity-based Service Offerings to your Clients

·         Weight your deliverables close to 60% Services and 40% Hardware and Software

·         If your client base averages less than 26 users, move up to the 26-100 user space

·         Modify your Managed Services Agreements to extend their terms, and allow you to modify their value during the term

·         Add financing as an option to each and every Proposal

·         Take advantage of this event to strengthen your relationship with Ingram Micro – accelerate the opportunity for a win-win relationship

For a complete copy of my Keynote Address and PowerPoint, click here. I request that you download it, as the takeaways will be much more meaningful in their intended context.

Erick Simpson
www.mspu.us