Demand for IT Managed Cloud Services

Business technology has gone through several major changes over the decades. Each transformation brought new ways to perform work -- it also allowed some organizations to leapfrog over their less-agile competition.

"Today's CEO concerns provide an advanced look at what will become CIO priorities in six to 18 months," said Jorge Lopez, vice president at Gartner, Inc. The focus for the IT agenda in the face of economic uncertainty and risk is flexibility, and renewed business agility.

According to Gartner's assessment, CIOs need to ensure that their IT operations are ready for the ongoing challenges and shifts that are sure to emerge.

Defined as the ability to achieve financial and strategic plans, effectiveness gives enterprises the flexibility to meet challenge with change. So, how will CIOs improve effectiveness to meet new economic and operational challenges?

Business Imperative for Cloud-based Services
IT leaders are increasingly being asked to move all non-strategic IT functions to the cloud; to develop IT core competencies and skills to manage virtual resources; and to embrace new applications that capitalize on cloud computing, collaboration, mobility and social media.

Worldwide cloud services revenue will reach $56.3 billion in 2009, a 21.3 percent increase from 2008, according to the latest study by Gartner. The market is expected to reach $150.1 billion in 2013.

Much of the cloud computing news centers on systems infrastructure as a service (IaaS). In 2008, these services accounted for only 5.5 percent of the overall cloud services market and are forecast to reach 6 percent in 2009.

"Cloud-based infrastructure services are expected to see significant adoption through 2013," said Ben Pring, vice president at Gartner. "This segment probably has the largest range of possible outcomes, depending on how aggressively cloud computing is embraced."

Cloud application services, evolving from software as a service (SaaS) offerings, were almost twice as large as the market for systems infrastructure and will continue to show strong growth.

Lower Cost Drives Cloud Services Growth
Over the next five years an increasing array of application functionality will become available as IT managed cloud services -- to supplement those current cloud applications.

"The IT market trends for the next couple of years remain highly uncertain. While short-term growth is expected to be inhibited, the potentially lower cost of cloud services is attractive to customers and will drive growth for these offerings," said Mr. Pring.

Given that backdrop, what new demand are you experiencing for cloud-based services? Are you reaching out to service providers, to learn more about their evolving on-demand service offerings?

How Managed Service Provider Accreditation Helps Buyers

In today's changing volatile economy, companies find the predictable monthly service charges of a managed service provider (MSP) highly attractive. They can deploy technology, confident that they're not pouring money down a black hole. The problem is, scads of technology providers are now trying to recast themselves as MSPs.

How can you tell which ones are qualified?

That's Charles Weaver’s job. He's CEO of the 8,000-member International Association of Managed Service Providers. His nine-year-old group offers an accreditation program for managed service providers, and it's closer to a bar exam than a pro forma blessing. No MSP has ever received a perfect score, and it can take as many as three tries before a company passes. (For more on MSP accreditation, see When Selecting Qualified MSPs, Assume Nothing.)

Part Technology, All Business
The Managed Services Accreditation Program (MSAP) has two parts: a written exam and a physical inspection. The written exam is only about one-fourth weighted toward technology, says Weaver. The other 75 percent relates to the business. "It's not a technology certification. We look at everything from their financials to their facilities. We make sure they're a healthy stable company. We ask questions about disaster recovery and security, but a lot of the exam is designed to determine their financial stability."

The physical inspection follows, during which Weaver or one of the 15 IAMSP board members visits the facility. They check for physical security and process documentation, among other issues. "Documentation is a big problem at the small and midsize service providers," says Weaver. "They fail to write things down, and that puts their business at risk." If they fail the test, the IAMSP shows them how to improve, and they can take the test again (at a cost of $1500).

Dealing with Growth
The accreditation program has been so successful that Weaver is hoping to set up partnerships with consulting firms to help MSPs prepare. The IAMSP has already added sub-categories relating to accreditation for green IT facilities and master MSPs (those who lease services to smaller MSPs).

But keeping up with the growth in the industry is keeping Weaver busy. "Companies are demanding managed services because they're trying to cut costs. But they're finding very green, very immature vendors who say they're an MSP because they went to a seminar," he says.

If you're entrusting your company's technology to an MSP, then invest the time to determine whether your MSP is accredited, and what that accreditation process involved.

Four Places to Find Managed Service Providers

We spend considerable time educating businesses about the value of managed service providers (MSPs). Now it's time to tackle the next logical question: Assuming you're ready to outsource some or all of your IT infrastructure, where can you find a qualified, reliable MSP?

The search for an MSP that fits your business is a bit like finding a doctor: There are thousands of qualified people ready to help you, but ultimately your choice may come down to personality and bedside manner.

In some cases, MSPs may serve as a virtual extension -- or complete replacement -- for your IT department. With that reality in mind, your service providers will need to have corporate cultures that blend well with your own business culture and working style.

Treat your search for an MSP similar to an employee search. Interview the candidates carefully, ask about past successes and failures, and ask for plenty of references that you can contact directly.

Step One: Finding MSP Candidates

I still need to answer the most basic question of all. Where can a small, midsize or large enterprise find qualified MSPs to manage some or all of their IT systems? Here are four potential starting points:

1. Your Existing IT Partners: Chances are, your current IT consulting firms, solutions providers and integrators have launched -- or will soon launch -- managed services practices.

If you already depend on external firms for IT project work, ask those firms if they offer hosted applications, remote monitoring and IT management, and other ongoing, fee-based monthly services.

2. The MSPAlliance: This association has roughly 7,000 member MSPs from across the globe. I'm not suggesting that all of the MSPs are top-notch, but a growing number of them have earned so-called MSPAlliance Accreditation, which means the association has inspected their data centers, network operation centers and business processes. Check in directly with the MSPAlliance to see if they have any member organizations in your areas that offer the IT services you need.

3. MSP Partners: This vendor-driven organization -- originally launched by Cisco Systems, Ingram Micro, Intel, Level Platforms and Microsoft -- educates MSPs across North America. Chances are, they can direct you to qualified MSPs in your region. You'll find MSP Partners contact information here.

4. The MSPmentor 100: The annual MSPmentor 100 list identifies the world's top managed service providers. The research is based on a global MSPmentor reader survey, and it ranks MSPs according to more than a dozen metrics (including annual revenue growth and number of devices remotely managed).

Disclosure: I'm MSPmentor's founding editor, and even top-ranked MSPs can stumble in a bad economy. But if you check the MSPmentor 100 list, you can search for MSPs in your area.

Let me know how your search for an MSP goes and best wishes for a successful 2009.

The More Things Change, The More They Stay the Same

I received an email the other day congratulating me on a column I wrote for NetworkWorld nearly three years ago entitled, "Why Managed Services Fail."

The 'shelf-life' of web content always amazes me, but it is gratifying to have people stumble across my past writings and still find them timely.

What struck me as I revisited this 2005 column was how many of my points were still true,

• "...Almost every supplier and service provider I talk to admits that selling managed services has been harder than expected."
• "The first problem these managed service providers face is packaging."
• "The second issue is pricing."
• "The third challenge is positioning these services properly."
• "But the biggest obstacle to selling managed services is poor sales skills."

Sound familiar?
Although industry research clearly shows that customers are becoming more receptive towards managed services and the economy is even driving an increasing number of customers to actively pursue managed service alternatives, many MSPs are still suffering from poor sales and marketing skills to respond to these opportunities.

They are still thinking in terms of selling products rather than services. They are still promoting the 'speeds and feeds' of their technical capabilities rather than the business value of their service capabilities.

As a consequence, many MSPs end up selling their services to IT managers who are only interested in continuing to buy systems and software rather than selling solutions to higher level decision makers who are interested in the business impact of their services.

Worthy of Your Business?
So, if you are an IT or business decision-maker who is seeking to acquire managed services, don't be surprised if your potential MSPs are talking to you in the wrong terms and trying to sell you the wrong value propositions.

Managed Services Momentum Shifts to Mid-Market

While traveling across North America in recent weeks, I've heard about the same two-part trend from multiple sources: Some small businesses are reducing their IT service contracts and delaying outsourcing decisions. But on the flip-side, mid-size businesses are accelerating their move to managed services. These trends are pretty easy to explain.

Consider this: 18 percent of small-business owners in October said they were at risk of going out of business because of economic conditions, up from 9 percent in August, according to an American Express survey involving 602 businesses with 100 or fewer employees.

Even worse:

• 79 percent of small-business owners said sales are decreasing.
  
• About two-thirds of the respondents said the tightening of credit has affected their business.
  
• 51 percent said they have had to tap personal assets in order to pay business expenses.
  

With those concerns in mind, it's increasingly difficult for small business owners to focus on their IT strategies. They're so consumed by cash-flow issues, that they overlook the fact that managed services can deliver predictable, reliable IT services at a fixed monthly cost.

Let me be clear: Small business owners should embrace managed services as a way to improve their own cash flow. But many entrepreneurs will hesitate to do so because they are afraid to make any long-term financial commitments in today's economy.

Mid-Market Managed Services Boom
In stark contrast, mid-size businesses are accelerating their move to managed services. I hear this again and again from CXOs within mid-size organizations, and from managed service providers themselves.

The explanation is simple: Mid-size companies are eager to trim costs. Big, sprawling on-premise application projects are out of fashion. Instead, easy-to-deploy software as a service (SaaS) engagements are the rage.

But that's not all. Mid-size companies are investing in managed security, managed storage, and other basic services that no longer require full-time internal IT employees.

Yes, some mid-size IT staff members are going to lose their jobs as companies outsource more functions to managed service providers. But that was a trend even before the recession kicked in.

Fearless Migration to Managed Services
Instead of fearing managed service providers, IT staff members should closely evaluate their skill sets and develop expertise in such emerging areas as unified communications, telepresence and open source applications.

Nobody is immune to the recession. But mid-market IT managers who keep their skills sharp will mitigate the risk of losing their jobs, and wind up working more closely than ever with managed service providers.

Making Sure The Numbers Favor Managed Services

As industry analyst forecasts mount predicting the rapid growth of managed services, an increasing proportion of IT and business decision-makers are taking a closer look at how these alternatives can impact their operations.

The challenge is effectively measuring the costs and benefits of these options.

Gartner kicked off 2008 predicting, "By 2011, early technology adopters will forgo capital expenditures and instead purchase 40 per cent of their IT infrastructure as a service." And with today's unprecedented economy crisis, THINKstrategies believes the shift to managed services will be faster and more pronounced than predicted.

As a consequence, every responsible IT and business decision-maker is obligated to carefully reassess their current operations and thoroughly evaluate all of the available alternatives to better manage their IT environments so they can better support their business objectives.

Substantive Cost Comparisons
However, many of the current methods for evaluating the financial impact of today's managed services fall short because they don't effectively measure the full cost implications and additional business benefits of these services.

For instance, many managed service providers (MSPs) utilize web-based total cost of ownership (TCO) or return on investment (ROI) calculators to help potential customers understand the cost-savings they can generate using managed services.

Yet, these calculators often include generic cost comparisons which are irrelevant or of little value to specific companies. Or, they suggest that managed services can eliminate valuable staff positions which raises fears among potential customers that they will lose their jobs by hiring a MSP.

Comprehensive Assessments
What thoughtful IT and business decision-makers need instead are interactive tools which enable them to work with MSPs to more thoroughly measure the real cost-savings and additional business benefits -- both tangible and intangible -- that managed services can produce for their organization.

This requires more sophisticated calculators and skilled salespeople who can work with customers in utilizing these tools effectively.

Managed Services Reality Check for Small Business Owners

Somewhere between the economic panic and the managed services craze their resides a simple truth: Now is the time for all small businesses to carefully consider their IT strategies for 2009.

I'm tired of reading wild statements that say managed services and Software as a Service (SaaS) are immune to the economic turmoil. It's far more accurate to say we've reached an inflection point of sorts, where small businesses need to review what they spent on IT in 2007 and 2008 to help their planning in 2009.

Traditionally, many small businesses acquired IT assets -- PCs, servers, networks, applications and other infrastructure that they ran internally. But those acquisitions required big lump-sum capital investments.

During the current economic turmoil, we're seeing a shift in the market. Smart small businesses increasingly depend on IT services.

Much in the same way that they pay flat monthly fees for broadband and cellular services, small businesses are embracing managed services to gain far more predictable -- and far more reliable -- IT options.

Look Back to Get Ahead
If you're a small business owner or manager, take a look at your 2008 and 2007 IT expenses. Be sure to underline purchases involving storage, security and application infrastructure.

Going forward, investigate how those big-ticket items could be shifted (partially or entirely) into the cloud.

Hundreds -- perhaps thousands -- of IT solutions providers now offer managed firewall and managed endpoint security services. And new cloud storage services -- such as Amazon's Simple Storage Service -- can bolster your own on-site storage area networks with key disaster recovery capabilities.

The trend certainly includes any applications you're seeking to license or "purchase." I am not suggesting that all on-premise applications will shift to the cloud. But before you build -- or buy -- your next business application, check to see if it already exists on the Web. Chances are, it does.

Managed Service Providers: Serving Small Businesses Worldwide

Thousands of small businesses in the United States have already embraced managed services. Now, thousands of additional businesses across the globe are climbing aboard the managed services bandwagon.

Consider the following data points:

• Asia Pacific organizations will spend more than $10.25 billion on hosted and managed services by 2010, up from $6.47 billion in 2007, according to Frost & Sullivan.
• Australia's managed security market will grow roughly 20 percent annually through 2013, the same research firm predicts.
• Small and mid-size enterprises will drive nearly half of Europe's managed services revenues -- jointly spending nearly 11 billion euros in 2008, estimates Forrester Research.
• Small business managed services spending will reach $5.4 billion in 2008, according to Techaisle. The data covers the US, United Kingdom, Australia, China, Brazil and India. In the US alone, small business managed services spending will hit $1.5 billion this year, Techaisle predicts.

Quest for Managed Service Guidance
When you string those data points together a clear pattern emerges: Small businesses worldwide have overcome their fears of the IT unknown, and they're turning to trusted advisers for managed services guidance.

So, what services are small businesses outsourcing most frequently to MSPs? The answers include:

• Remote administration (94%)
  
• Help desk services (90%)
• Managed security (82%)
• Managed storage (65%)
• VoIP and telephony (57.1%)
• and unified communications (32.1%)

The data, culled from MSPmentor.net's global survey of managed service providers, reinforces a clear fact: Small businesses across the globe are realizing they need to focus on their business strategies, while outsourcing core IT responsibilities to external professionals.

Small Businesses: The Greatest IT Innovators of All?

When you're a start-up company or a small business, you enjoy a key freedom: You don't have any legacy equipment and you can make sure your IT dollars drive innovation.

But over time -- as your staff, network and application infrastructure grows -- you'll wind up spending more and more IT budget on maintenance rather than innovation.

According to various estimates, mature businesses spend anywhere from 80 percent to 90 percent of their IT dollars maintaining systems they already have in place. That's pathetic. And it's also impractical. Small businesses must either innovate or die.

So, how can a small business remain focused on innovative IT solutions? I've found the answer in my own company. Generally speaking, we outsource just about every piece of IT possible. Here's how we do it:

1. Get Predictable: We seek managed service providers, web hosting companies, developers and other partners who can handle day-to-day maintenance issues at a reasonable, predictable monthly cost.

More than 90 percent of PC and network issues can now be solved remotely, according to ConnectWise CEO Arnie Bellini, whose company specializes in professional services automation (PSA) software. With that fact in mind, small businesses can depend on managed service providers for the vast majority of their support needs. Plus, MSPs typically have technicians they can dispatch to fix any on-site issues that aren't resolved remotely.

2. Build Assets, Not Technology Temples: Empowering your employees with the latest technologies can be fantastic. But that doesn't mean you necessarily need to "own" the technology.

Through leasing programs and managed service programs, you can ensure your technology tools remain ahead of most rivals. And you won't need to open your wallet for big hardware upgrade cycles every few years.

3. Explore Hardware as a Service: Yes, even your network hardware (switches, routers, servers, desktops) can move to a managed service model. Fact is, small businesses can't afford to "buy" many of the latest hardware and broadband solutions. But they still need the capabilities of those services.

A prime example: Small businesses can't build out $300,000 TelePresence centers. And they often can't afford to fly to all corners of the world meeting customers and business prospects. Still, those same small businesses can use shared TelePresence locations (available in more and more hotels) to network with peers across the global.

4. Oh, And Innovate: Now that you've shifted all the "maintence" issues to a service provider, you can focus on driving new innovative applications across your organization.

My small (but growing) business, for instance, leveraged a mix of contract developers and MSPs to launch a series of major media Web sites. We "own" the completed Web sites, but all of the site underpinnings (the content management system, database, server, broadband, etc.) are outsourced to managed service providers and data center partners.

The result: We did not purchase a single piece of software or hardware to launch immensely popular, profitable Web sites. And yet those sites run on state-of-the-art software and hardware.

With the help of our managed service providers, we'll keep innovating.

Online Security in a Global Networked Economy

Because of the expanding growth and complexity of communication networking, and the risks presented by a new breed of skillful hackers, serious security threats are an unfortunate certainty within the highly interconnected office environment of today.

These threats are very real and the results are costly to those businesses that have been affected. Apparently, the victims aren't entirely at random, which is often assumed to be the case.

According to the 2007 CSI Computer Crime and Security Survey, almost one-fifth (18 percent) of those respondents who suffered one or more kinds of security incident further said they had suffered a "targeted attack" -- defined as a malware attack aimed exclusively at their organization or at organizations within a small subset of the general population.

Beyond the Virus Threat
Moreover, financial fraud overtook virus attacks as the source of the greatest financial losses. Virus losses, which had been the leading cause of loss for seven straight years, fell to second place.

In today's global marketplace, every business needs to be vigilant in pro-actively protecting its corporate assets. Gone are the days of simply scanning for viruses. Today a comprehensive, layered approach is required to secure the network and company resources from multiple types of threats.

Small and medium-sized businesses (SMBs) are particularly vulnerable because they typically do not have expert resources on staff to ensure the network is secure, that regulatory compliance issues are being properly addressed, and that network monitoring and updates are effectively maintained 24 hours a day.

Alternative to the In-House Solution
Managed service providers can help SMBs secure their network by deploying a layered approach that uses various advanced technologies and solutions, protecting the network, and anticipating multiple types of potential security breaches -- from Trojan horse attacks and spyware, to data tampering and information theft.

Managed security services create a resilient multilayer defense:

• Prevention -- proactively keeps the intrusions out
• Detection -- identifies when an intrusion is occurring or has occurred
• Response -- takes action to defeat a potential intrusion once detected
  

The advantage of working with a managed security provider is that services can be scaled to meet an organization's exact security requirements. This flexibility allows companies to minimize service outages and operational expenses, thereby reducing the overall financial impact.

The Challenge to Stay Current
Frankly, a large enterprise IT team can also benefit from an out-tasked network security solution, as the demands to ensure that in-house staff is staying current increases exponentially over time.

Ask a managed service provider to help you assess your security needs and design the best solution for your business. A comprehensive security audit is often the first step in this process.

By all means, be prepared for the unexpected, and keep your business safe. However, this is a complex task that's best left to the experts, while you free-up time to focus on your core business objectives.

Can You Rely On Your Current Resellers For Today's Services?

Managed services, Software-as-a-Service (SaaS) and 'cloud computing' are gaining increasing attention in the press and among IT and business decision-makers because they promise to alleviate many of the day-to-day hassles of deploying and administering technology and applications.

While these new forms of remote and web-based services have demonstrated many tangible business benefits, they have also disrupted the traditional value-chain of the technology industry.

Traditionally, technology vendors relied on channel partners to extend their reach into market segments they couldn't address either by offering lower costs of sales or by delivering more customized solutions. Often the channel partner also took on the role of pre-sales consultant and on-site support provider.

This model worked well when customers needed help with the initial planning and design, as well as the installation, integration and ongoing maintenance of the hardware and software. And, customers needed plenty of help in all these areas because of the complexities and costs of traditional hardware and software.

A Different Set of Challenges
Today's SaaS solutions and cloud computing services were designed to eliminate, or at least substantially reduce, these challenges. They have been architected so that the vendor now operates the hardware and assumes responsibility for the deployment and ongoing availability of the software functionality. This approach fundamentally changes the relationship between the customer and vendor, and raises questions about the role of the channel partner.

However, while the burden for the success of the 'solution' has shifted from the customer to the vendor, THINKstrategies believes that there is still plenty of room for channel partners to play a role in this relationship. Once again the SaaS and cloud computing vendors cannot afford to help individual customers with adopting their solutions to meet their unique requirements. They also cannot afford to customize their solutions to address these requirements. Channel partners can help with these tasks, as well as helping their customers with change management and training.

However, those channel partners who are wedded to the past formula of hands-on software deployment and maintenance will be adversely affected by todays' SaaS and cloud computing movements because these new services substantially reduce these opportunities.

Adapting to the Change
Even the many channel companies who have tried to transition their businesses from traditional on-site support to remote managed services have found the shift difficult.

Rather than sell the value of their rapid response to system failures or software problems, channel partners must demonstrate their ability to keep customers' systems and software up and running with limited on-site presence via managed services. This requires a different set of service systems, skills and operating policies.

The Right Skills for the Task
For IT and business decision-makers within customer organizations, today's new service alternatives represent an important time to reevaluate their supplier relationships to ensure that your traditional service providers are adjusting to the new market opportunities and challenges.

Globalization and the Small Business Teleworker

The trend of globalization, and the need to connect remote employees, now touches nearly every segment of American business -- regardless of organization size or industry. Here’s a case in point.

Founded in January 2001, Illinois-based Kirix began as a data analysis specialist for the recovery audit industry. They've done a lot of data analysis and software development work in that time and have had a particular specialty in identifying duplicate payments and other overpayment errors in large corporate accounting systems.

More recently, by generalizing their tool set and incorporating Web connectivity into their software, they apply that analytical firepower to all kinds of data -- regardless of where it is located -- even data that's on the Web.

The Borderless Communication Challenge
Benjamin Williams, one of the company founders, had been planning to relocate to Germany. As a valuable asset to their corporation, Kirix wanted to retain his services, but wasn't sure how the international transition might work -- particularly with the potential latency of connecting a Voice over IP (VoIP) phone halfway around the world.

Kirix turned to Geckotech to provide a fully hosted communication solution to enable their corporation to utilize Ben's services overseas, without compromising the quality of their voice and data network.

In this scenario, one feature has proven to be very beneficial -- four-digit extension dialing. This enables simple "internal" calls by dialing the last four digits of a direct-dial number -- even if that employee works in a different country, in another continent.

Unified Communications for the Teleworker
By using Geckotech's outsourced IP phone system, Kirix has been able to retain a key employee while conducting business overseas. The corporation's staff has been pleasantly surprised by the actual quality and reliability of their voice and data network.

"Four-digit dialing to my co-workers from Germany is obviously tremendous, but the quality of service is unbelievable," marvels Mr. Williams. "All that was required was a DSL broadband connection and my Cisco phone and I was making perfectly clear calls to my U.S. office as if I was in the next room over."

As more companies entertain the idea of employing the best talent that's available globally, the demand for the out-tasking of multinational IT and networking services will escalate. It's efficient, it's effective and infinitely more flexible to adapt to the changing communication and collaboration needs of a geographically diverse organization.

Questions to Ask a Managed Service Provider - Part 2

With more and more managed service providers (MSPs) entering the market, your choices are expanding. If you choose the wrong one, however, you might wind up with more challenges than benefits.

How do you know? According to Matt Cowall at Appia Communications, it’s often as simple as asking.

In part one of this post, we covered three of the top five questions to ask a managed service provider: How long has an MSP been in business? What kind of support does the MSP offer? And what kind of redundancy does the MSP offer?

Today we’ll cover the remaining two questions that Matt recommends you ask, and they’re arguably the two most important:

What quality of service does the MSP provide?
This is probably the most important question, of course. You’ll learn quite a bit about an MSP’s service quality when you check its references. Be sure to ask what happens when there are issues. Does the MSP respond quickly and take ownership of the problem?

Another key indicator is the MSP’s service level assurances. A service level agreement (SLA) is a document describing the minimum performance standards an MSP promises to meet. It should also clearly describe remedies — and even penalties — if the MSP ever fails to meet the minimum standards. An SLA is an essential part of a contract between you and an MSP.

Does the MSP have formal SLAs? Do the assurances cover what you’re buying? And do the assurances have ramifications? The willingness of an MSP to offer SLAs with significant penalties for service interruption is a sure sign that the MSP is a high-quality provider. No MSP can remain in business if it has strong SLAs and can’t deliver on its promises.

How willing is the MSP to meet your specific requirements?
Your company or organization is unique; it’s often that very uniqueness that has resulted in your success. Unless an MSP is willing and able to tailor its services to meet your specific requirements, you may find yourself bending your operations to suit the MSP — instead of the other way around.

You can tell a lot about an MSP’s flexibility during the procurement process. Do they ask a few questions and then send you a quote, or do they take the time to listen to your specific needs and develop a custom proposal? And since no MSP can meet every requirement, are they forthcoming about what they are able — and not able — to do, so you can make a fact-based determination of how well their offerings fit your needs?

Lastly, ask about a roadmap for their products or services. Your needs will evolve over time, sometimes quickly. Therefore, your MSP should have a plan that aligns with your future business needs.

Can Retailers Respond to Changing Corporate Needs?

Joe Panettieri did a great job describing the IT management and business implications of the growing dispersion of today's workforce in his post "Managed Services: Safe at Home".

This trend is not only creating new challenges that are driving greater corporate interests in managed services, it is also attracting a broadening array of managed service providers (MSPs) to satisfy businesses' escalating needs.

The office supply retailers are increasingly nibbling around the edges of the IT services market. The most obvious example is Best Buy's Geek Squad which has primarily served the consumer needs of the residential market, but is also responding to the needs of the small office/home office (SOHO) market which Joe described in his post.

The latest example of this trend is the recent news that Staples is going to deliver a portfolio of IT services to small and mid-size businesses (SMBs). These services are going to center around the acquisition Staples made in late 2006 of Thrive Networks Inc., and the online storage services offered by EMC's subsidiary, Mozy Inc., formerly Berkeley Data Systems which was acquired in 2007.

Although Staples' new services are primarily aimed at SMBs, they could also appeal to large-scale enterprises trying to support remote workers working in branch offices or out of their homes. Both Thrive and EMC are already serving large companies grappling with these challenges.

So, should you consider out-tasking your IT support and management requirements to these retailers?

Your Selection Criteria
Staples' on-site and remote services will appeal to many companies who could get the best of both worlds -- economical field support and cost-effective managed storage services. You can also bet that Staples will continuously expand its portfolio to include managed security and desktop services, along with a wider array of on-site capabilities.

But selecting a retailer to support your IT needs will still depend on the complexity of your end-user requirements, and the geographic reach of the retailers' local personnel.

The Scalability Challenge
While EMC's Mozy service is location agnostic, the scalability of Staples' Thrive Networks staff is still unknown. Best Buy has been able to grow its Geek Squad to satisfy the bulk of its residential customers' needs. The key to success for Staples will be the retailer's ability to recruit and retain IT professionals to satisfy the on-site needs of SMBs anywhere, anytime.

If Staples, and other major retailers, succeed in delivering these on-site and managed services they will disrupt the highly fragmented IT services market in the same way they disrupted the office supply industry.

Managed Services: Safe At Home

As more businesses allow employees to work from home, a new IT challenge -- and opportunity -- arises. It's impossible for employers to offer on-site, full-time tech support to all of their stay-at-home workers. But the rise of managed services -- including remote monitoring and pro-active administration -- can bring order to these highly distributed workplaces.

The trend toward telecommuting is undeniable. More than 40 percent of American and Canadian companies let their employees telework, according to WorldatWork, a global HR association. As energy prices continue to fluctuate and businesses increasingly focus on environmental issues, the march toward telecommuting will surely accelerate.

Home Networks Become Complex
As a small business owner myself, my home office includes a network with multiple nodes -- three PCs running a mix of Ubuntu Linux and Windows XP; and my trusted MacBook Pro running Max OS X.

Now, multiply that IT complexity across hundreds of home offices and you'll understand why many small, midsize and even large organizations struggle to keep their home-based employees online and productive.

That's where managed services enter the picture. Increasingly, managed service providers (MSPs) and VARs (value-added resellers) use remote monitoring and administration tools to troubleshoot small and mid-size business networks.

The New Executive Suite
The managed services trend is now spilling over into the home market, where entrepreneurs and executives now demand the same level of IT service and support that they experience within corporate offices.

Small business owners and midsize business executives need to rethink their IT outsourcing strategies. In fact, all IT projects and network administration decisions must now include the extended enterprise -- including home offices and mobile devices.

The old corporate network as we know it is dead. The clear line between your enterprise and your employees' homes are gone. Going forward you need an IT architecture that blankets all of your employees -- regardless of where they're working.

Make Your Move for 2009
As you negotiate IT service contracts for 2009, ask your IT consultants and integrators how they're addressing the growing trend toward stay-at-home workers.

And make sure your IT contracts for patch management, security, storage and other automated services cover those telecommuters.

Questions to Ask a Managed Service Provider

The benefits of outsourcing make a simple and strong case, and more organizations are choosing to do so. As a natural result, more and more companies are entering the managed services provider (MSP) market.

According to Matt Cowall at Appia Communications, some of them are well-qualified; others are simply trying to take advantage of a market opportunity. Price is important, but it's not the only consideration, and the benefits of using an MSP can quickly evaporate if you choose the wrong one.

Matt recommends five key questions to ask before selecting an MSP. We'll discuss three of them today.

How long has an MSP been in business?
As in any business, there's an art and science to offering managed services. One obvious way to separate the experienced MSPs from the wannabes is to ask how long they've been in business.

If they've been operational for some time, they probably will have already addressed any service delivery issues they may have experienced in the beginning. Length of time in business is also an indicator of financial stability and client satisfaction.

What kind of support does the MSP offer?
One of the reasons you choose managed services is to turn your headaches over to someone else. If the MSP's support is weak, then you'll need to manage both the MSP and the problems you thought you were outsourcing.

Does the MSP have a support center that is staffed 24/7/365 (as opposed to being on call)? Does it have formal ticketing and escalation procedures? And does it monitor your services for you, or are you expected to bring problems to its attention?

What kind of redundancy does the MSP offer?
As you shop for an MSP, you'll learn about the infrastructure they use. Don't forget to ask if that infrastructure is redundant. Redundancy is the duplication or repetition of critical components in a system to provide alternative functionality in case of a failure. Even the best equipment fails from time to time, so it's essential that there are sound backups in place to ensure service isn't interrupted.

This is part one of a two-part blog post. In part two, Matt will share his thoughts on questions that managed service buyers should ask about provider quality and flexibility.

Erasing the Line Between Business and Technology

During a recent CIO seminar I hosted in San Francisco, some attendees told me how they were trying to blur the line between business and technology. Other attendees told me they wanted to "close the gap" between business and technology.

To me, business and technology are already one and the same. Business Technology (BT) is the next evolution of Information Technology (IT). Many technology bloggers write about information, applications, data, voice or video. In stark contrast, the term Business Technology acknowledges the convergence and interactions of these elements together.

Where we came from
When I was with InformationWeek in the 1990s, we wrote about data processing, management information systems and IT. But today, BT is a new view of technology; a 360-degree view, if you will, where technology is woven throughout the business operations, decisions and functions.

The role of BT should be placed within the sequential context of people, process and technology. Meaning, a dialogue about the inherent benefits of BT should not focus on technology, but rather on how it aids businesses in completing their goals, or how it enables streamlined business processes and improved efficiencies.

Where we're going
Looking ahead, the measuring-stick for incumbent providers will shift to measuring a defined, expected experience overall -- inclusive of applications, processes and the network foundation. And, the head of BT (a next-generation CIO) aligned with executives who are running the operation and is focused on improving process and finding new sources of revenue, and/or strategic competitive advantage in the marketplace.

Business Technology as a service
Business Technology is a new way of thinking about the business experience and IT, certainly. However, its delivery and ongoing management involves two options:

• in-house management
  
• and/or selectively out-tasked functions to a managed service provider

How do you decide which BT services to keep in-house, and which ones to outsource to MSPs? We'll explore those considerations in the weeks ahead.

You know the line between business and technology is fading away (in fact, I think it's gone). Now, it's time for executives to focus on the strategy of technology -- rather than the ongoing management of it.

Selectively out-tasking the day-to-day management to a so-called "Business Technology as a Service Provider" may prove to be the flexible, scalable and reliable choice.