WHITE PAPER. Three Keys to a Better Managed Service Provider. Business

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1 WHITE PAPER Three Keys to a Better Managed Service Provider Business

2 Copyright 2011 StorageCraft Technology Corporation This document may not, in whole or in part, be copied, photocopied, reproduced, translated, reduced or transferred to any electronic medium or machinereadable form without the prior consent in writing from StorageCraft. THIS PUBLICATION IS PROVIDED AS IS WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. THIS PUBLICATION COULD INCLUDE TECHNICAL INACCURACIES OR TYPOGRAPHICAL ERRORS. CHANGES ARE PERIODICALLY ADDED TO THE INFORMATION HEREIN; THESE CHANGES WILL BE INCORPORAT- ED INTO NEW EDITIONS OF THE PUBLICATION. STORAGECRAFT MAY MAKE IMPROVEMENTS AND / OR CHANGES IN THE PRODUCT(S), AND / OR THE PROGRAM(S) DESCRIBED IN THIS PUBLICATION AT ANY TIME. StorageCraft, the ShadowProtect logo and ShadowProtect are the trademarks or registered trademarks of StorageCraft Technology Corporation, in the United States and / or in other countries. All other names and trademarks are the property of their respective owners.

3 Abstract Managed services have flourished recently as the IT solution for small and medium businesses. With levels of ever-increasing complexity in IT, these businesses turn to managed service providers and value-added resellers who offer managed services to take the place of expensive IT staff. For businesses interested in offering managed services or providers who are looking to improve their offering, taking some time to consider the technology they re using and the way they are offering those technologies is a great way to be more successful. This white paper suggests three things to consider in order to be more successful.

4 Contents Introduction... 5 The Role of Managed Service Providers... 7 The Reality of Managed Services... 8 Three Keys to MSP Success... 8 Key 1: Think About Your Technology... 9 Key 2: Stand By Your Solutions Key 3: Look to the Horizon Conclusion... 13

5 Three Keys to a Better Managed Service Provider Business These days, small and medium businesses (SMBs) have needs. With the proliferation of a wide variety of technologies that democratize access to features, opportunities, and even business models, SMBs today are able to offer services and products that once only existed in large enterprises. This makes for a vibrant, active market, but it also introduces some problems that historical SMBs didn t have. In order to, produce, sell, operate and maintain these services or products, SMBs today need to invest in technologies more aggressively than in the past. This creates the need for dedicated staff. Perhaps a larger problem is the expectation modern consumers have that these services and products remain available all day every day, which in and of itself requires IT acumen. In addition to the complications of simply running a business these days, SMBs are relying more and more on vast amounts of data. According to a study published by Storage Strategies NOW, the amount of data growth SMBs are experiencing is

6 6 Get more at 1. Connor, Deni, Corrigan, Patrick H., and Bagley, James E. Data Protection and Recovery in the Small and Mid-sized Businesses (SMB). Storage Strategies NOW, Inc growing at a pace that doubles every 18 months. 1 In order to maintain business continuity, protecting this data has to be a priority, another function that requires dedicated service. Unfortunately, a dedicated, quality IT staff is expensive. As a result, many SMBs today are turning to third-party sources for their IT needs. Their attitudes toward the role of these thirdparty vendors, however, vary. In some cases, SMBs try to mitigate cost by holding on to the antiquated breakfix model, where IT help is not employed until after a problem occurs. Traditionally, this solution made sense because the IT investment in SMBs was small, the chances of a serious problem were limited and the damage from such problems was usually not catastrophic. Today, however, IT setups are increasingly complicated, making the likelihood of a problem significantly greater. More importantly, the consequences of these problems are often catastrophic. There are many different statistics available describing the result of prolonged data loss to SMBs, and while the specifics of their data vary, they all show the same thing: SMBs who suffer significant data loss are in real danger of going out of business. The longer the outage, the greater the chance of failure. In light of this, SMBs need to get smarter about the way they approach their IT needs.

7 Three Keys to a Better Managed Service Provider Business 7 The Role of Managed Service Providers Managed service providers (MSPs) offer a solution to this problem. By stepping in with predictable and reasonable pricing, MSPs can provide SMBs with proactive, IT service that protects their business without the need for a dedicated staff or the sheer luck required by a breakfix approach. Based on the current business environment, it s no surprise that the managed services industry is a growing one. Eric Goodness, a research vice president at Gartner who specializes in managed service, predicts that by 2014, 90% of North American companies will be using managed services. 2 Managed services are compelling for a wide variety of reasons and many new businesses have opened their doors to meet the need. Other existing IT companies and value-added resellers (VARs) are adapting their business models to include managed services. 2. Goodness, Eric. Presentation at an event hosted by IPsoft in Accessed 26 July This white paper looks at three keys to establishing a solid, successful MSP, whether you re starting from the ground up, trying to adapt your current model or just trying to improve your current performance. Regardless of where your MSP is in its development, integrating these keys into your business will help you provide better service and improve your ROI.

8 8 Get more at The Reality of Managed Services On the most basic level, the decision to offer managed services is a decision toward peace of mind. The best MSPs have consistent, predictable revenue streams. They also have greater control over their client base and the environments they work in, meaning they are less frequently in those situations where the life of a client s business is on the line. That said, however, many MSPs or VARs offering managed services don t make the right decisions when organizing or marketing their services. The result of this is time spent solving problems that they re essentially not getting paid for. The most successful MSPs spend a lot of time planning, making educated decisions about the technology they use, and working with their clients both to understand their needs and to educate them about the process. Three Keys to MSP Success Of course, you want to be one of those most successful MSPs. The remainder of this paper describes three specific habits you should develop that will help you get there. In each

9 Three Keys to a Better Managed Service Provider Business 9 case, these keys to success demand that you be disciplined and rigorous about your business and to really think about what it is you re selling and how you re making your money. As an MSP, you are most successful when everything is running smoothly, so your priority needs to be making strategic decisions that ensure that as frequently as possible. Of course disasters are unavoidable, but by taking the time to think about your solutions and how you deploy them, you can be confident that a disaster at a client site won t bleed you dry. The three keys described in this paper will help you know what to think about and what to plan. Key 1: Think About Your Technology In the end, the technology you deploy to your clients will make or break your business. No matter how fast or friendly your service, no matter how low your prices, if your technology lets you down, you ll let your clients down. That s not a position anyone wants to be in. Take some time to look at your client base. What are their technology needs? If you re just starting out as an MSP, take some time to familiarize yourself with the market and its needs. Are there a lot of hospitals or government agencies? Do you need to prepare for special regulations or security needs? Once you know the features and services you need, you can sit down and evaluate the technology solutions you are already

10 10 Get more at using (or plan to use) and evaluate them. Are they working reliably? Are they cost effective? Do you understand how to leverage all of their features? Understanding how your technology works is crucial to making smart IT choices. It s possible you have multiple solutions in play to answer a variety of different client needs, when in reality one or two of those solutions, if you knew how to use them fully, might serve all your clients just as well. A discovery like this could cut your licensing costs drastically. Think as well about how the different solutions you re using can work together. The more efficient you can make your technology offerings, the better control you ll have on what happens out in the field. If you re using a wide variety of solutions and you can t make a solid business case for each of them, maybe it s time to consolidate. Take some time to plan out your technology strategy. Look at best practices for those technologies and develop executable plans that make sense for you and your technicians. It should go without saying, but make sure you re always automating everything you can (as long as it makes sense). Make sure your technicians understand not only how to deploy the technologies you ve selected but why you use them so they re prepared to answer client questions about the solutions you re offering.

11 Three Keys to a Better Managed Service Provider Business 11 Key 2: Stand By Your Solutions Once you ve established your MSP offering by making sure you re using the best technology for your client base, stand by that offering. Spend some time with potential clients and try to understand not only their needs, but their attitudes about IT issues. If a potential client is hesitant about buying into a long-term relationship that will ensure their IT health, then they may not be the right client for you. By contracting with a client who has the breakfix philosophy, you could lose money and set yourself up for headaches. You ve spent time establishing a service offering that makes sense and keeps you where you want to be financially. Stick with it. That said, take every opportunity you can to educate potential clients about the value of your managed service offering. Be prepared to share statistics, case studies, and any other data you have that demonstrates how your service may very well save their business and will certainly save them money. Take the time necessary beforehand to prepare your sales pitch. Keep good records of your wins with other clients. Work with your technology partners to create collateral that will show potential clients that you re using the best technology. It s important to be prepared to evangelize potential customers away from breakfix and into your managed service. You do that by making sure you have the right technology, by leveraging that

12 12 Get more at technology in your service offerings and by practicing how to talk convincingly about what your MSP can do and what it has done for other clients. Key 3: Look to the Horizon There s always a fine line between keeping your service offering on the cutting edge and introducing new, untried technology into your business that can cause serious problems. But as an MSP, you need to walk that line. Just as you need to make an initial evaluation of your technology offerings, it s important that you constantly stay up to date with the newest trends. Whenever you learn about a new innovation in technology, honestly hold it up against your current offering and see whether or not it fits. If it does, make plans to test it on a limited scale before rolling it out in your regular service. Part of keeping up to date with your technology also means making sure you and your technicians understand how your current technologies work. Once you ve selected the technologies that work for you, work with the vendors of those technologies to stay up to date with the most recent versions and training. The IT industry is growing and changing so fast it s easy for an MSP to get stuck with outdated technology. It s a good idea to keep up with your clients evolving businesses as well. What new technologies could you offer that would help

13 Three Keys to a Better Managed Service Provider Business 13 them? How can your MSP help them grow? In the long run, the health of your MSP will be a reflection of the health of your clients. By being aggressive in trying to assess their changing needs, you can be prepared to offer the solution that works best for them. Conclusion Ultimately, the key to MSP success is being proactive. Your clients are paying you to plan ahead and to be prepared for anything. By taking time to sit down and honestly evaluate your technology, cutting solutions from your offering or updating them where necessary, you can be confident in your managed service product. You can then work with clients to help them achieve their IT goals. As IT needs continue to diversify, more and more MSPs are going to enter the market. Competition will increase and it is the MSPs who really think about their offerings and plan how to be successful that will rise to the top.

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