Managed Services Shake-Up!

Managed Services seemed like the Holy Grail for distributors and IT service companies as everyone wanted to add managed services to their profit picture, so why is revenue falling? Offering and selling managed services sounds like a great thing and managing your network is important.Managed Services seemed like the Holy Grail for distributors and IT service companies as everyone wanted to add managed services to their profit picture. Offering and selling managed services sounds like a great thing and managing your network is important.

If you are a network service provider managing networks for others then you are familiar with the companies barking the most about their services. N-Able, Level Platforms, Silverback Technologies and Kaseya are the most prominent companies in the news. The current but shifting methodology is to place a small computer appliance at the client site where it talks to the local network and “phones home” the information to the IT company that sold it to them. The appliance or service provides monitoring and reporting for the local network priced by device. This is billed monthly and generates a recurring revenue for the IT company.

Revenue stream thinking is wonderful and if you can get your customer to pay you monthly for the service so your job as an IT company is easier that’s all the better but it’s not really making the clients business better. The truth about 95% of the networks installed is the monitoring and reporting is already in place on the network servers. If you run Linux or Microsoft Windows 2003 server, standard, small business edition(SBS) or enterprise the tools are already there with alerting email etc… Management reports are very useful and the managed service vendors customize them based on personal tastes.

It is no surprise then that the prices for the IT companies to get into the game has plummeted. Silverback just reduced the cost of it’s appliance based MSP product offering from $76,000 to $2,999. This should tell investors and others just how much fluff is involved here. Perhaps this entry fee should fall down to $299-499. Others have also had huge drops. The cost is spread out among clients and is designed to make the IT company have a single “console” to view the status of it’s client base. That’s a benefit to the IT company. These MSP tools help the IT company a lot more than they help the client.

-Find yourself a good IT consulting firm who will listen and deliver your business solutions that add real value and process improvement.

Comments (2)

Category: Archive,Shorts

2 Comments

Comment by Rosemary

Made Thursday, 23 of October , 2008 at 6:57 am

Good words.

Comment by Vevay

Made Monday, 27 of October , 2008 at 7:15 am

Good for people to know.

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