When Selecting a Qualified MSP, Assume Nothing

Hiring a managed services provider shouldn't be a leap-of-faith decision-making process. Perhaps you have staff that could fulfill their responsibilities, but instead you entrust a key component of your IT infrastructure to another company.

You believe they can do the job better and more efficiently. However, is that belief proven to be justified?

This begs another question: who licenses or certifies a managed service provider?

The topic came onto our radar thanks to a handful of companies claiming SAS 70 certification. The SAS 70 standard was developed by the American Institute of Certified Public Accountants (AICPA) to govern service organizations. (SAS stands for statement of auditing standards; see the AICPA page relating to auditing standards for more information.)

Certification's Real Meaning
You may assume that a managed service provider claiming SAS 70 certification has submitted itself to rigorous tests relating to its internal processes. However, according to Judith Sherinsky, technical manager of audit and attest standards at the AICPA: "There is no such thing as SAS 70 certification."

Sherinsky says that undergoing a SAS 70 audit only results in what she calls a "restricted use report," one intended to help auditors at the customer determine the reliability of transaction processing at the managed service provider.

For such a report to be useful to a customer, it must have meaningful context. "If the service provider organization provides several services, the report is useless if it doesn't cover the services the customer is interested in," she says.

Let's be clear: any MSP willing to undergo an audit is good for the industry, and helpful for the buyer. I'm merely highlighting the need for due diligence.

We'll return to this topic, both to keep you updated on what we learn about other standards and certifications (for instance, the ISO/IEC 20000 standard for service providers, and the MSPAlliance Accreditation program).

Attestation vs. Certification
In fact, Sherinsky suggests that customers of managed service providers check out the AICPA's attestation standards. These encompass a review of engagements that are the responsibility of "another party," that is, a service provider. An attestation report covers the processes between two parties, while an SAS 70 report covers processes internal to a service provider.

When your service provider claims certification under certain standards, don't take them at face value. Ask them exactly what it means, and how it's relevant to your relationship.

Any "seal of approval" is only of value in the procurement process when you have a sense of how stringent the benchmark requirements are, and whether they apply to your specific needs.

Progressive Business Technology Adoption Trends

Business leaders are still upbeat about the benefits of technology adoption. It's key to their market penetration, central to competitive differentiation, and vital to their supply chain and distribution strategies.

However, according to Forrester Research, they are less than satisfied with their own IT organization's contributions. In fact, reducing the cost of operations is believed to be one of the few attributes where expectations are aligned.

Members of the Forrester Leadership Boards (FLB) CIO Group recently discussed this challenge. Forrester presented results from their business technology survey of 600 executive leaders.

The study uncovered the following significant gaps:

IT teams rarely are aligned around key business priorities. When asked to rank business drivers by their importance to the firm's technology strategies, business executives identified customers, productivity, and costs as the most important themes.

But, when asked to rate their IT organization effectiveness, there was a wide gap between critical business drivers and the perception of IT's focus -- even in the key areas of cost reduction and workforce productivity.

Business executives consider several sourcing alternatives to fulfill the IT requirements of their enterprise. When asked to rate sources of technology solutions, leaders continue to rank their IT organization as a primary source.

However, they also referred to a wide range of other viable sources -- from their own staff, consulting firms, as well as out-tasked subscription-based managed service offerings.

Proven Strategies for Success
CIO Group members noted that these survey results accurately reflect the overall situation for IT organizations today -- an unfortunate scenario where many CIOs typically spend considerable effort.

These CIO Group members have adopted best practices for IT-business alignment ahead of the general population. Almost all have dedicated relationship managers, as opposed to only 37 percent of surveyed IT organization. All have a PMO dedicated to IT governance, whereas only 47 percent of the typical firms do.

Proven strategies to integrate business and IT include: formalizing IT's role in the overall planning process; formalize, embed, and expand the role of relationship managers; embed IT skills within business organizations; create centers of excellence for business change skills; and, separate business enablement functions from IT delivery and operations.

End of the Do-it-Yourself Era
Forrester concludes, the era where IT said "we can do it all for you" is no longer viable. Business executives see IT inflexibility as a detriment to their agility. They're aware that internal IT is but one of many options.

Therefore, CIOs who insist that their role is the "sole source for technology solutions" will be marginalized. The savvy IT managers have embraced a coexistence scenario, where selective out-tasking is a welcomed addition to their solution portfolio.

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).

: 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.

Videoconferencing Enables Sales For Global Consulting Firm

The business case made the argument for Kline & Company, a management consulting and research firm about to celebrate its 50th anniversary, to investigate hosted videoconferencing. A global company, it handles approximately 40 projects at any given time. Three to six people collaborate on each project, which last three months on average. About three-quarters of its projects are global.

To collaborate and share knowledge, team members confer approximately 20 times over the duration of a project. That's thousands of in-person meetings over the course of a year, between colleagues and clients who are unlikely to be in the same location. The cost -- both financially and in terms of time -- was becoming prohibitive.

Serving Client Needs
Companies benefit from management consulting firms' insight because of their aggregated experience. But that insight needs to be shared because not every consultant can join every engagement. That's why John Hadley, Kline’s director of IT, is so bullish on WebEx's hosted videoconferencing service.

He investigated other services before settling on WebEx, impressed by its platform independence; other solutions required software to be installed on their (and clients') computers, which can be problematic in these security-conscious days.

WebEx Meeting Center, launched from a Kline-branded portal and integrated with Microsoft Outlook, provided a fully integrated Web collaboration solution that offered easy set-up of meetings and a virtual meeting experience, "as if we were all sitting in one room," Hadley says.

The improvement WebEx brought to collaboration on client engagements was so clear that Kline began deploying it elsewhere within the company. Its market research group began using it for pre- and post-sales activities, hosting 30-minute WebEx seminars for each study it produces. This lets the company reach up to 50 prospects at a time and help generate sales leads for its consulting group.

Improving Sales and Collaboration
Kline also started using WebEx internally for communication. It's used for quarterly staff meetings and sales meetings, among others.

Because of its global reach, the company also uses WebEx for sales presentations. This helps when clients are geographically dispersed as well, because the team can make presentations to up to 12 people at the same time.

When the research team launched a new database capability, using WebEx for demos helped reduce the sales cycle: the company converted 100% of its prospects to sales within 30 days.

With all companies running leaner these days, it's impossible for key personnel to cover the ground they did in the past. Think about how videoconferencing can speed up not only collaboration and information sharing in your company, but also help reduce your sales cycle.

Five Ways to Avoid Business Travel Expenses In 2009

Novell has canceled BrainShare. Apple is ending appearances at MacWorld. And thousands of businesses continue to cut their travel budgets for 2009.

I've got some unconventional advice for you: Stay on the road in 2009, and make sure you're meeting face-to-face with your best business prospects and sales leads. I plan to be on the road at least 40 to 50 percent of the time in 2009.

But on the other hand, our business continues to embrace a range of online technologies that drive conversation and collaboration with employees, customers and partners. Here are five options that can enable your business to save money and cut travel costs in 2009.

1. Hosted TelePresence: Yes, TelePresence (next-generation video conferencing) is a great way to drive communications. But building out TelePresence studios (they resemble executive boardrooms for the digital age) can cost $300,000 or more. Lower-end TelePresence solutions can cost about $12,000 and prices continue to fall.

Still, you can avoid the capital costs entirely by embracing hosted TelePresence. Much in the way that some on-premise applications are shifting into the cloud and SaaS (software as a service) model, TelePresence is gaining momentum in a hosted or pay-per-use model.

Take a look at AT&T's work with Cisco Systems, as well as Cisco's efforts to develop Public Rooms TelePresence. Over time, you will see more and more hotels, airports and public gathering places offering TelePresence rooms that you rent by the hour. And increasingly, the back-end services will involve hosted VoIP mixed with TelePresence.

2. Skype: An oldie but a goodie. Although eBay hasn't managed to monitize or fully profit from its Skype acquisition, the Skype platform continues to deliver big cost savings to my own business.

During a recent trip to Australia, I used Skype to make free VoIP calls to friends, family and my business partner in New England. The call quality made it sound as if all participants were down the hall from one another.

However, here's the challenge: To make free skype calls with your fellow employees, your peers also need have Skype accounts. Otherwise, you need to pay to "dial" from Skype to employees' traditional phones. At our business, Skype is a mandatory, cost-saving tool. And we find we communicate with many of our clients in Europe, India and Australia using the Skype platform.

3.WebEx: In February 2007 I visited Cisco Systems for an IT channel briefing. When we got on the subject of Unified Communications, I told Cisco they needed a stronger applications story to help show the power of Unified Communications. "You need an application like WebEx," were my exact words.

Two weeks later -- and by pure coincidence -- Cisco acquired WebEx. Clearly, I believed in WebEx for online meetings and Web conferences even before Cisco opened its wallet.

4. FreeConference.com: A great way to organize free conference calls with internal users or external sources. Many businesses spend thousands of dollars on conference bridges and other group-oriented phone conferences. But Free Conferences pushes the cost out to each dialer. And that cost is typically covered by each dialer's existing long-distance plan.

5. Be A Guest: Before you register for an event, conference or trade show, check in with the conference host to see if they need guest speakers for panels and breakout sessions. Then, see if those event hosts will pick up some -- or all -- of your travel costs.

If you're a dynanic speaker with unique views to share, some conference hosts will tap their own travel budgets to cover your trip expenses. But, pick your spots wisely. Plenty of conferences aren't worth your time, and many conferences will face light attendence in 2009.

Hosted Phone System Saves Time, Money and Hassles

If you've ever had to add or move employees, you know that one of the biggest hassles is dealing with the telephone system. While many companies are deploying IP-based phone systems to ease their PBX hassles, still others are turning to hosted phone systems to eliminate their ongoing operation and management responsibly altogether.

Hosted phone systems work especially well for companies that have highly mobile employees. With a hosted system, employees can just log into the system to automatically forward calls to another designated number.

One big advantage: employees need only give their clients one phone number. This eliminates the complexity of dealing with multiple phone numbers and voice mail systems.

Helios Realty, part of Real Living, the Midwest's largest independent real estate firm, has taken advantage of this concept. Helios relies on Cisco-Powered partner Geckotech to provide a scalable voice and data infrastructure for its highly mobile workforce of real estate agents, while still providing the highest level of professional service.

How Hosting Saves Time
Helios Realty has no assigned desks. When agents arrive in the office, they sit down at any open desk and type in a 3-digit code. This reprograms that phone as their office line while they're there. When agents leave the office, they can log in again and automatically forward calls over to their cell phone or voice mail.

Without ever investing in a new phone system, Helios can add agents simply by adding phone numbers. The company never has to worry about having enough "lines," because VoIP is based on bandwidth, not phone lines. The real estate firm also has itemized billing through Geckotech, so it can budget based on the number of agents.

How Hosting Saves Money
The Geckotech system saves Helios money in two ways. "Geckotech's mobility saves us money each month on rent and infrastructure," says Andrew Magliochetti, a principal with Helios Realty. "When employees are in the office they are instantly connected. We never have to pay for onsite maintenance to move a phone around, and we only need room for one-third of our workforce."

By using an outsourced IP phone system, Helios has said, its employees are completely mobile and free to communicate at will with their customers. Access to voicemail, intercoms, conference bridges, and 4-digit company-wide dialing is easier as well.

Though phone systems are crucial to most businesses, it is not crucial that they own them, as Helios has discovered.

If the responsibilities of owning, operating, managing and updating a phone system are an unwelcome hassle, then perhaps you should consider a hosted solution for your business.

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.

Exploring Managed Services - Key Performance Indicators

All business has become global. Companies of any size can now market products and services worldwide over the Internet. At the same time, competition has intensified because customers can investigate global competitors with ease.

To compete effectively in the global networked economy, companies need new capabilities:
  • Global procurement and sales 24 hours a day.
  • Integrated internal and external business processes.
  • Up-to-the-minute access to sales, order processing, production, and other business critical information required for informed decision making.
  • Flexible processes that can adapt dynamically to changes in the business climate.
The application of Business Technology is now a primary enabler of strategic advantage. However, chief executives have become impatient, as their companies have failed to keep pace with these advances. There are alternatives, for those who choose to act. The managed services model can be applied to accelerate this much needed change.

Review the following common business needs to decide if managed services can provide benefits to your business. If you answer yes to these key performance indicators, then perhaps there are areas where out-tasking could help drive change.

Are you a candidate for managed services? Consider these scenarios.

Our business is facing challenges:
  • Staffing IT professionals.
  • Staying up-to-date with evolving technologies and IT skill sets.
  • Managing and maintaining current infrastructure, hardware, and software.
  • Securing data, transactions, and communications.
  • Responding quickly to time-to-market demands.
  • Remaining flexible enough to maintain competitive position.
  • Reducing network overhead costs.
  • Operating in real time in order to meet 24-hour demand.
  • Delivering services to branch offices and remote workers.
Our business is in transition:
  • We need to upgrade, refurbish, move, or relocate existing infrastructure.
  • The scope or scale of current business operations is changing.
  • A merger, partnership, or acquisition is altering operations.
  • We need to increase the range and level of service.
  • Our growth targets depend on implementing new technologies.
  • We are expanding into new markets.
Our business must increase profitability:
  • We prefer to dedicate resources to our core competencies and mission critical processes rather than network support activities.
  • We view managed services as a good strategy for gaining efficiencies and reducing costs.
  • We need to implement a global network service but lack internal global resources.
  • We are concerned with our ability to keep up with the latest security threats and to meet privacy or security regulations.
  • We are experiencing dynamic business growth while undergoing downsizing and hiring freezes.
Initiate a dialog with a managed service provider, and you can begin to explore the possibilities of how to effectively adopt Business Technology as a Service.

How Web-Based Training Delivers Business Impact

There's a touchy little secret about call centers: their employee turnover is atrocious; it can reach as high as 26 percent per year, according to one expert's estimates. As a result, companies strive to ease the stress of their customer service agents.

Continental Airlines, the fourth largest airline in the U.S. with $14 billion in revenues, realized that by deploying VoIP technology with personal computers, it could route reservations calls to agents' homes. This not only reduced the need for call center real estate, but it also gives reservations agents the ability to both telecommute and time-shift their work. Today, almost 1,100 agents work at home.

Turning To Videoconferencing Technology
Unfortunately, even good ideas sometimes have bad side effects. Continental found that they could easily keep employees up-to-date on staff issues with regular teleconferences. But for training and evaluations -- activities that required visual interaction -- agents still had to get into their cars and drive to a call center location.

Continental solved the problem by turning to technology a second time, implementing the WebEx hosted system for improving communications with its remote employees. By using hosted WebEx Meeting Center sessions, supervisors can easily update small groups of employees on policy or process changes. They can also schedule one-on-one training sessions.

"Using WebEx, supervisors share their desktops to show agents how to use a specific feature on our reservation program," says Leslie Colbert, Continental's director of training and communication. "WebEx gives all of our agents direct and frequent contact with management."

Saving Time and Fuel
Continental estimates that it's saving more than 10 million miles of car travel, 9 million pounds of emissions, and about 500,000 gallons of fuel annually. The airline is also implementing WebEx eLearning for new hires.

Overall, it's benefiting both internally and externally. "WebEx helped us create an incredible remote worker program which aids us in our recruiting practices," says Colbert. "Our telecommuting program is now a huge draw for potential hires."

That's a double advantage for Continental. At the same time it's increasing employee satisfaction, it's also gaining a better reputation for being environmentally sensitive.

If you haven't already embraced Web collaboration tools in your organization, consider it as an appropriate New Years resolution to boost your team's productivity.

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.

A Boom in Managed Services - How to Prepare

New studies demonstrate the pros and cons of Business Technology deployments, especially as they relate to IT investments strategies.

First, the downside: in a recent study of IT management excellence, the results showed the continuing disconnect between finance and IT roles, and the value each one brings to the organization.

As the report states: "The lack of alignment within organizations is exacerbated by a lack of awareness on the part of both IT and finance about their own contributions to the problem. Nearly one quarter of the respondents report that discord between IT, business and finance is a frequent occurrence when making IT investments."

Why Clear IT Processes Matter
Lack of alignment is triggering a bigger cascade of problems relating to IT investment. For instance, sometimes companies excuse their lack of IT investment due to limited budget and resources.

In reality, "companies are unsure how to define or implement management processes, therefore they are unwilling to make significant changes and they allow other investment priorities to step to the front."

The temptation in this scenario might be to outsource the contentious area to a third-party to save money. This is exactly the wrong time to act.

Clearly, you have to get your own house in order before you take advantage of out-tasking, and then you have to apply strong governance to the service provider relationship. If you can't manage the process internally, you surely can't manage it externally.

Foundation for Competitive Advantage
Why do you need to get your house in order? Assume your competitors are going to act, and thereby gain an advantage from deploying managed services.

Forrester Research analyst Henry Dewing predicts in The Broad Opportunities in Managed Services that "macroeconomic factors, including rapid technology evolutions, a coming investment wave in IT, and market constraints on capital, increasing the attractiveness of managed services over the next 24 to 30 months."

In fact, Dewing proscribes the managed services model, represented by the confluence of faster technology change, a new technology investment cycle, and capital constraints. It's a proven way to take advantage of new technologies without capital investment -- while still having a hedge against increasing change.

Even more important, Dewing continues, "Given limited prospects for growth and the high cost of capital, Forrester believes that many businesses will turn to managed services to limit capital investments while increasing the flexibility of IT infrastructure."

Now, the upside: if you want to be in a position to take advantage of technological advancement to spur new growth -- while still hanging onto precious capital -- then managed services is likely the way to go.

Global Enterprises Opting for Managed Network Services

I'm going to pull a Paul Harvey on my colleague Joe Panettieri. He wrote a couple of weeks ago about the managed service offerings of companies such as Verizon and Cablevision. For those readers outside the U.S. who don't know radio commentator Harvey, one of his catchphrases is to talk about "the rest of the story."

In this case, it's the number of global enterprises who are signing deals with carriers to manage their networks. Since the time of Joe's story, there have been at least five announcements by major U.S. or global entities opting for large managed services contracts -- and those represent only the customers who were willing to announce the deals.

The first deal to catch my eye was Indianapolis Power & Light's three-year contract with AT&T for integrated network solutions between multiple offices and generation plants, announced November 24th.

Now, managing a network in central Indiana may not seem earth-shaking, but IPL is a subsidiary of AES, a $13.6 billion company based in Arlington, Va., that has a global workforce of 28,000 in 29 countries on five continents.

Then I saw that, four days earlier, AT&T had announced a $346 million contract to manage the WAN, LAN, and VOIP capabilities for the state of Georgia. And the week before that, online investment firm Scottrade had expanded a deal with AT&T for both network services and business continuity.

New Market Momentum
And the announcements keep on coming. This week alone, two more billion-dollar global entities announced managed services deals.

Daimler AG, the €99.4 billion manufacturer of Mercedes automobiles and Freightliner trucks, among other vehicles, hired Verizon Business to deploy and manage an IP network for its operations in Africa, Europe, the Middle East, and North America.

The Elster Group, based in Luxembourg, hired British Telecom to manage the network for its operations in 38 countries across North and South America, Europe, and Asia.

Moving Further into the Mainstream
The moral of the rest of the story is clear: when billion-dollar companies start signing up for managed services contracts, the days of early adoption are over. These entities don't sign contracts like these unless they're more than confident about the ability of the aforementioned providers to keep them up and running in a 24-hour world.

As the analysts like to say when a market takes off in a sharp upward angle, it looks like we're heading into the hockey stick portion of the show.

Managed Service in Search of a Market

There's a new term in the managed services space -- Desktop-as-a-Service (DaaS), and it's an obvious extension of the SaaS model. Desktone is a company that provides DaaS capabilities to service providers. Its customers, according to CEO Harry Ruda, currently include Verizon and Softbank Telecom.

Ruda characterizes DaaS as a service whereby users obtain their computing services through a remote connection over a network. The physical compute power, if you will, is delivered through a service provider and paid for on some usage basis.

In other words, users can access operating system and applications through a completely hosted system, and the service provider would be responsible at the back-end for storing data, upgrading applications, updating virus protection, among other activities.

Computing Power of a Utility
It relies on the whole concept of utility computing, in which compute power is delivered the same way electricity is -- when you want it in a metered fashion. DaaS proponents even promise that their service, like electricity, is instant-on, because there's no booting of an operating system.

I'm skeptical about a technology that even its proponents admit doesn't work well over wireless connections, when you consider that laptops now outsell desktops because of their ability to work even when users are disconnected.

However, proponents insist that by handing management of PC resources over to a service provider, companies of almost any size can cut maintenance and technical support costs, as well as increase security because the service provider can focus more on patches and virus protection.

Another pioneer in this new category, MokaFive offers a DaaS subscription service for $100 per user per year that uses a virtual machine, which they describe as "centrally managed but locally executed."

That means end-users can choose from among any number of devices -- laptops, Macintoshes, smartphones, tablets -- and have corporate data protected, but can still use their chosen device for other applications or personal information.

Evolution is Easier than a Revolution
The arguments and variations of DaaS go on and on. One of the biggest stumbling blocks to the DaaS model may be the fact that it requires extensive re-thinking of one's infrastructure -- either by replacing desktop computers with disk-less computers or significantly upgrading the network bandwidth, or both.

In contrast to DaaS, most of the current "fill-in-the-blank" as a Service models have been tried and proven, because they're a logical evolution from existing operational models. My skepticism remains intact.

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 for Every Type of Organization

Do you believe that the growth of managed services adoption will have little impact in the government sector, or other non-profit organizations? Think again.

Let's consider the facts. Clearly, all organizations benefit from improving their processes.

Government Insights, a global independent research and advisory firm, released a report focusing on Service Level Agreements (SLAs) and their use in managing the delivery of IT and network services.

As IT and network technology are embedded further into business processes, the apparent need for productive cross-organizational partnerships becomes evident. The state of these Business Technology partnerships can be either an enabler or an inhibitor -- when negotiating an SLA.

Demand for Service Level Agreements
Organizations may develop SLAs with internal IT staff and/or with external IT service providers. In both cases they set guidelines and minimum standards for the delivery of IT services to the end-user community.

Jan Duffy, research director, Government Insights, said "SLAs should be beneficial to the IT/business partnership, contributing to transparency and to developing objectives that are achievable. Given the large number of relationships and alliances involved in modern IT, governments can benefit substantially from developing expertise in preparing and maintaining SLAs."

As we've stated previously on this forum, relevant metrics and SLAs are a key ingredient of most managed service provider offerings, and the associated inherent benefit of an out-tasked solution.

According to the Government Insights market assessment, demands are increasing for internal IT departments to provide a combination of "invisibility and level of responsiveness" that is considered a hallmark of the seasoned managed service provider.

Imperative for Improved Accountability
To meet this strategic imperative, many IT leaders have moved their organizations toward a service delivery model. Translation: this means that the performance of IT is being judged based upon the way it is valued by the end-user community -- and not by internal IT indicators.

Government Insights describes the main characteristics of developing successful service level agreements for use in managing relationships between public sector organizations and their internal IT departments and/or with external IT providers.

As a result of their analysis, they recommend that public sector organizations -- including central, regional and local -- acquire competencies that will enable them to:
  • Define, measure, and continuously improve the services that IT delivers.
  • Continuously monitor user expectations and satisfaction, and provide timely education.
  • Deliver IT services aligned with the needs and priorities of current and future mandates.
A managed service provider can enable a government, or other not-for-profit, entity to select and implement business technology to improve the effectiveness, efficiency, and quality of service performance that's delivered to their constituents. The need for on-demand service transcends all sectors of the marketplace.

Can You Reach Your IT Manager On Thanksgiving?

As Thanksgiving approaches on November 27, many U.S. companies are heading into an extended four-day holiday weekend.

If you're an executive or CIO ask yourself the following question: If your web servers, databases or network infrastructure failed over the holiday weekend who would you call for help?

Despite the proliferation of smart phones and ubiquitous network services, many IT staff members are impossible to reach over holiday weekends.

And commuting into the office for an IT or network emergency is the last thing most employees have in mind when they sit down for Thanksgiving turkey.

Secure, Safe and Sound
On the other hand, I will rest easy this holiday weekend because our company depends on multiple managed service providers (MSPs) -- a group of companies that remotely monitor, manage and troubleshoot our Web servers, databases and network systems.

In most scenarios, our MSPs mitigate an IT or network issue before it becomes a major problem. We pay a flat monthly fee to our Web host and MSPs for those proactive services.

As a result, my business partner and I will relax with our respective families this holiday weekend -- even as thousands of readers across the world continue to visit our corporate and media Web sites.

Through our MSP relationships we've purchased peace of mind -- which is actually priceless.

Sizing Up the IT Management SaaS Market

Our prior commentary on SaaS and Managed Services: Big Service Providers Plug In does a good job pointing out how various service providers are attempting to deliver a widening array of Software-as-a-Service (SaaS) solutions and managed services.

This trend is being driven by two major forces. First, the commodization of traditional transport services. Second, the shift in customer attitudes regarding IT management.

Service providers can no longer differentiate themselves based on the quality of their transport services. As a consequence, service pricing, customer loyalty and profitability of this mainstay business continue to decline.

To compensate for this erosion of their traditional transport business, service providers are seeking to deliver a new generation of value-added services which can give them greater 'stickiness' with their customers.

It's a Win-Win Scenario
At the same time, customers are seeking to offload, or out-task, a broader assortment of IT management responsibilities so they can improve the reliability of their systems and software, reduce their operating costs, and focus their limited resources on more strategic and/or innovative corporate initiatives.

THINKstrategies uncovered the growing level of interest and adoption of IT management SaaS solutions among IT professionals in 2007 as a key finding of annual survey with Cutter Consortium (download a complimentary copy of "SaaS Penetrates the IT Department").

Forrester recently published a report entitled -- "How Big is SaaS in IT Management Software?" -- which suggests that SaaS solutions only represent 1 percent of total IT management software sales today, but will grow to 10 percent by 2013.

Given that 25 percent of IT professionals who responded to THINKstrategies and Cutter Consortium's survey a year ago said they were already using SaaS solutions to address their IT management requirements, Forrester's forecast is probably low.

Multitude of SaaS Solutions
Smart vendors, service providers and VARs are recognizing this trend and seeking to win a share of this rapidly growing market. The good news for IT professionals is that they will have plenty of SaaS solutions and suppliers to chose from.

As always, the best choice will be selecting the supplier that you trust the most to meet your particular business needs and requirements.

SaaS And Managed Services: Big Service Providers Plug In

Quick: Name the world's most successful software as a service (SaaS) companies. Most readers will likely mention Salesforce.com ... then perhaps NetSuite, two key players in on-demand CRM (customer relationship management) and accounting software, respectfully.

Salesforce.com and NetSuite certainly have momentum in their markets. But consider this: Big service providers and broadband providers like Cablevision and Verizon Business may be the best-kept secrets in both the SaaS and managed services markets.

With each passing day, I notice big service providers launching more and more SaaS and managed services offerings. Increasingly popular options include:
  • Managed and hosted unified communications
  • Hosted Microsoft Exchange and IBM Lotus Notes
  • Managed routers, switches and network infrastructure
Increasingly, big service providers provide both the pipe (broadband) and the applications flowing through the pipe (email, groupware, CRM, enterprise resource planning, and so on).

When Big Meets Small
Still, I'm frequently skeptical when big service providers strive to offer PC-like services and support to smaller organizations.

Conventional wisdom says small businesses are best served by VARs and solutions providers -- the folks who provide on-site consulting, integration and support services. Big service providers, critics claim, don't really have their fingers on the pulse of small business.

I think that's changing. Over time we'll see hybrid business engagements surface, where service providers and VARs outsource business engagements to one another.

In some scenarios, the service providers will host customer applications. In other scenarios, the VARs will continue to build and maintain network infrastructure for customers.

In all scenarios, small and mid-size businesses will seek predictable, steady IT costs by marching toward SaaS and managed services. Similar to how voice and IP came together in the late 1990s, SaaS and managed services are now inseparable.

Redefining Vendor/Customer Relationships

My colleague, Joe Panettieri, reports that Dell has won its largest managed services agreement ever with the state of Georgia.

This contract illustrates how Dell, and other technology vendors, are shifting their go-to-market strategies to respond to customers' changing IT management needs.

Anyone who follows the technology industry knows that Dell has been struggling to keep pace with HP when it comes to computer sales. What few casual observers have recognized is how Dell has amassed a new set of remote management capabilities via a series of acquistions over the past year and a half.

Why Managed Services Matter
During that time, Dell has acquired SilverBack Technologies, Everdream, EqualLogic and MessageOne to serve as the foundation for a new portfolio of Software-as-a-Service (SaaS) and managed service capabilities.

Dell understands that it will have a difficult time outpacing HP and other technology vendors on the strength of its products alone as laptops, desktops and servers become more commoditized.

Instead, Dell and other vendors must differentiate themselves on their ability to help customers generate the greatest value from their systems. This means redefining their services to help customers, and their channel partners, better manage these assets to optimize their performance.

Redefining the Meaning of Support
The most cost-effective way for vendors to monitor these devices and proactively administer them is via managed services. The best way for them to offer these capabilities to their channel partners or customers is via SaaS solutions.

These 'on-demand' services redefine the nature of vendor/customer relationships. Customers no longer have to assume the responsibility for managing their systems and software, and wait for their vendors to respond to their problems when something goes wrong.

Now, they can shift the burden on their vendor to ensure the uptime and performance of their systems and software. By the same token, vendors can no longer boast about their customer support response times. Instead, they must demonstrate their willingness to take on this greater responsibility.

Managed Service Scenarios: Choosing the Best-Fit Solution

Are you puzzled about how to choose the best-fit managed service solution for your particular business needs? As a basic guide, the following are three typical high-level scenarios for deploying managed network services.

Scenario 1: Customer Owns Network and Shares Management Responsibility

Companies that already have an internal IP network can continue to manage it while out-tasking the management of onsite equipment -- usually known as customer-premises equipment (CPE), used for the managed service (see Figure 1).

The Roles and Responsibilities are as follows:
Managed service provider -- Sets up, maintains, and administers the equipment needed for the managed service, including company-owned equipment such as servers.

Company -- Managed service customer maintains and administers its internal network.

Scenario 2: Service Provider Owns the CPE; Customer Can Share Equipment Management with Service Provider

Some companies do not own a LAN, either because the location is new or the company already out-tasks its LAN services. In this situation, the service provider can manage the equipment needed for the corporate network as well as the managed service.

Many large enterprises like this arrangement because they can maintain physical control of the equipment while relying on the service provider for 24-hour network operational support (see Figure 2).

The Roles and Responsibilities are as follows:
Managed service provider -- Sets up, maintains, and administers the equipment for the managed services as well as the corporate network.

Company -- Monitors its corporate network through a Web interface provided by the service provider, receives regular reports on the network status and managed services, and is notified in case of a defined emergency.

Scenario 3: Service Provider Owns Equipment in its Own Facility; Customer Monitors Service Provider's Management of the Equipment

The difference between this scenario and the previous one is that most of the equipment is physically located in the service provider's "hosting" facility instead of on the customer premises.

The Roles and Responsibilities are as follows:
Managed service provider -- Sets up, maintains, and administers the corporate network and related managed services; most of the network equipment is physically located in the provider's computing center; the exceptions are the equipment for the LAN and network connections, as well as gateways for computers and IP telephony.

Company -- Monitors performance of its systems through a Web interface provided by the service provider, receives regular reports on the network status, and is notified in case of a defined emergency.

Summary: each of the three basic scenarios can be customized to meet your particular requirements. In upcoming posts, we'll identify some more specific application examples.

Managed Services: Branching Out to Branch Offices

Companies with branch offices are facing a technology paradox: On the one hand, businesses are expanding their branch office locations by 6.8 percent annually. On the other hand, only 15 percent of those remote locations have on-site technology staff members, according to Nemertes Research.

Those stats beg the following question: How do you empower branch office employees with the proper technology when you can't afford to staff those remote offices with more IT staff?

The answer (as our regular readers already know) is managed services. Increasingly, companies are moving their IT assets out of remote offices and into either (A) a centralized data center or (B) an Internet cloud.

The march toward centralizing and virtualizing IT has some benefits and some challenges.

Next Generation Empowered Branch
The good news: Centralizing applications and IT infrastructure can make networks easier (and less costly) to maintain. The bad news: Accessing centralized applications from remote offices can be a painful, time consuming process. And application performance over a Wide Area Network (WAN) connection can be horrendous.

A range of managed services, however, can potentially eliminate those challenges. Application acceleration services, hosted VoIP, hosted unified communications and managed 3G services are now all mainstream solutions for branch offices.

And the trend toward managed branch office services will surely accelerate -- especially as companies explore next-generation technologies such as TelePresence.

The lesson for readers: Keep expanding those branch offices.

But, check in with managed service providers (from big companies like Verizon Business down to small companies like your local VAR or integrator) to see what type of managed branch office services they offer.

The IT Management Implications of SaaS Growth

THINKstrategies recently unveiled the initial findings of its fourth annual Software-as-a-Service (SaaS) customer survey, in conjunction with Cutter Consortium, which revealed that 63% of the responding organizations are using a SaaS solution -- almost double the 32% who were using SaaS solutions in 2007.

Over the past four years, we have seen tremendous growth of the SaaS market spurred along by rising frustration with the challenges of deploying traditional software products and the hassles of keeping enterprise applications up and running.

Our surveys were the first to find widespread interest and substantial adoption of SaaS in 2005.

Changing workplace requirements have led to more workers needing to access applications and corporate data remotely, which has also led many organizations to adopt web-based SaaS solutions.

The Shift Away from CAPEX
But, the most important consideration has been the financial savings generated by shifting from upfront capital investments in perpetual licenses and systems to a more flexible, 'pay-as-you-go', subscription model. This approach has become particularly attractive in today's tough economic climate.

Despite these advantages, many IT organizations were reluctant to accept SaaS, and even resisted its adoption in many cases because of concerns about the reliability, security and performance of these web-based applications.

However in 2007, THINKstrategies survey found growing acceptance of SaaS solutions by IT professionals who were not only learning that SaaS solutions could be trusted to successfully support their business units and end-users, but also discovered that a new generation of SaaS solutions were available to help them better manage their IT operations.

Business Case for Out-Tasking IT
Leveraging SaaS and a broader array of 'cloud' computing services is an extension of the same mindset which is driving many IT departments to recognize the benefits of contracting for managed services.

This 'out-tasking' strategy allows IT professionals to offload many of the day-to-day technology deployment and management responsibilities which can be performed in a routine fashion more economically by a specialized third-party, so the IT staff can finally focus their limited time and resources on more strategic initiatives or even innovative projects.

Click here to obtain the first of a series of three Executive Update reports based on the THINKstrategies/Cutter Consortium SaaS survey results.

Introduction to Managed Network Services

Many companies find it expensive to keep up with new Business Technologies -- or simply prefer to devote their limited IT or Telecom resources to the core business, rather than routine ongoing network management.

Managed network services can quickly enable your company to evolve, by giving business decision makers access to leading network technologies and management expertise -- without requiring high initial capital expenditures (CapEx), or ongoing investments in technology upgrades.

Deploying a Managed Service Solution
When a company subscribes to a managed service, a service provider manages the network equipment and applications on the customer premises according to the terms of a service-level agreement (SLA) established to meet the company's unique business needs.

Some managed services are also hosted, meaning that the service provider hosts the equipment in its facility instead of the customer's, and delivers services to company employees over the Wide Area Network (WAN) to wherever they are physically located.

For small and medium-sized businesses (SMBs), managed services provide enterprise-class capabilities for a predictable monthly fee -- without requiring a large, initial capital investment.

The On-Demand Pay-as-you-go Model

Companies that out-task enjoy high levels of network support and availability, enabling internal IT staff to focus on strategic activities instead of network support, and pay only for those networking services that they need.

Managed services generally include software, hardware, and other Internet Protocol (IP) networking services. The service provider's highly experienced technical experts focus exclusively on providing the network services and support that customers need to meet their business requirements.

Companies have the option to out-task some or all of their network management and monitoring tasks and retain control of the rest -- even if the equipment is physically located at the provider's site.

Key Benefits of Managed Network Services:
  • Reduces costs, including service call fees, hardware, operations, and network transport
  • Eases adoption of new technology-enabled business processes
  • Increases levels of support and network availability, without additional staff
  • Makes your IT and Telecom budget more stable and predictable
  • Provides access to the latest technology, with limited risk
  • Provides access to an enhanced technical skills base
  • Makes it easier to adapt to changing business conditions
  • Enables the IT manager and staff to focus on your core business
In upcoming posts, we will outline some typical scenarios for deploying managed network service offerings -- including simplified application diagrams that explain the basic concepts.

Is Cash Flow Holding Your Technology Back?

At first glance, some small businesses are caught in a technology paradox: They need modern technologies to drive revenue higher. But they don't have enough cash to acquire that technology.

A recent American Express survey found that more than half of today's U.S. small business owners are experiencing cash flow problems, reports StartupSpark.com. As a result, the top priority for most small businesses is maintaining current sources of revenue -- rather than building new ones.

Have Your Cake and Eat it Too
I say: Why not pursue both goals? Fact is, you don't need very deep pockets to leverage modern technology. What you really need is a predictable cost structure -- a way to know exactly how you're going to continue innovating without suffering from surprise IT costs.

By now, you likely know where I'm heading: Predictable managed services contracts can help many of those worried small business owners get a handle on their IT costs.

Our company, for instance, pays a flat monthly fee for e-newsletter marketing services from StreamSend.com. We use that service to launch new products, promote news or evangelize special offers to new target customers.

We're also learning to cut the hidden costs of business travel. One prime example: We used to pay hotel WiFi fees, which varied greatly from region to region. But now we're paying a flat monthly fee for Starbucks WiFi service, which is readily available in all the cities we visit. Also, we're thinking of shifting again, this time to a cellular Internet connections for our laptops.

Cash Flow Management Solutions
Those are pretty basic steps. But don't stop there. Look at every piece of your IT infrastructure -- applications, hardware, systems, etc., and determine if there's a managed alternative available for a predictable monthly fee.

Then communicate and innovate with minimal impact on your monthly cash flow.

Managing Enterprise IT Operations, from Afar

According to a recent McKinsey & Company report, their research results demonstrated that the potential for managing servers and other IT resources remotely is essentially underutilized.

However, changes in the current business environment will increase the adoption of this approach. Plato, a wise Greek philosopher, wrote about how "necessity is the mother of invention." Certainly, that perspective is equally valid today.

The motivation for utilizing the resources of a service provider can be considerable. A case in point: Fortune 50 companies, with budgets of $2 billion, can save as much as $500 million of their IT infrastructure budgets.

How, you may ask? Apparently, it's mostly from reducing fully-loaded labor costs.

Evaluation of IT Assets and Liabilities
McKinsey surveyed 141 CIOs at multinational corporations, and 34 percent of them said that they anticipate utilizing some infrastructure management services over the next three years -- which is an increase from 19 percent of respondents in a similar survey performed during the prior year.

Economic justification is the basis for the expected growth. As hardware costs fall, labor has become the focal point. They estimate that costs for non-labor IT components -- the hardware, software, maintenance, and facilities -- declined by almost 44 percent between 2000 and 2008 as prices have dropped.

McKinsey also estimates that total costs will fall by nearly half from 2000 to 2010, however the labor component will more than double -- to 62 percent, from 30 percent.

Apparently, the attraction of a managed service solution is due to changes in the deployment of infrastructure. Many organizations have simplified their IT and network architecture, making it easier to decouple components, and utilize service providers.

Selectively Out-tasking the Drudgery
Besides, standardization has made some management tasks ready for automation. As a result, it is now easier to manage some complex IT tasks, like network security monitoring, from a remote location.

Furthermore, organizations can selectively out-task parts of their IT infrastructure management. Some companies will choose to only out-task network monitoring, while others seek assistance with the total management of their data center needs. Clearly, it's a flexible model that can adapt to shifting business requirements.

In summary, McKinsey believes that the greater speed and security of data networking has made interactions between the service user and their provider more stable. This progress has therefore increased acceptance of the managed service delivery model.

By the way, before you rush to reduce your Business Technology deployment plans, you may also want to reflect upon McKinsey's guidance on IT spending cuts: they believe that "IT investments deliver more value to a company's top and bottom lines -- by creating new efficiencies and increasing revenues -- than any savings gained from traditional IT cost cutting."

Four Must-Have Managed Services: In Any Economy

I spent Thursday afternoon moderating a Webcast about the managed services industry. The discussion drove home the fact that small businesses will continue to embrace certain managed services regardless of the economy around them.

My guests included:
  • Gary Pica, general manager of mindSHIFT Technologies, one of North America’s top managed service providers
  • William MacLeod, CIO, Accu-Sort Systems, a mid-size business that focuses on automatic data capture solutions
  • Jim Alves, executive VP, product marketing, Kaseya
Full disclosure: Kaseya sponsored the event but the Webcast did not involve any product pitches. Rather, we were exploring how small and mid-size businesses will depend on managed service providers regardless of the economy.

MacLeod conceded that his company is "rethinking everything" -- nearly all IT projects and expenses -- during the current economic turmoil. But here's the interesting part: MacLeod mentioned several managed services that his company will continue to embrace, no matter what:
  1. Internal customer (i.e., end user) support: Here, MacLeod depends on a mix of outsourced help-desk and on-site services from mindSHIFT, his managed service provider.
  2. Enterprise business systems maintenance and support: In other words, MacLeod is not going to cut any IT costs that could harm the reliability and scalability of his applications.
  3. Data Backup/Retention: Information is the lifeblood of Accu-Sort's business. Here again, MacLeod depends on his MSP for managed services.
  4. IT Security: Rudimentary tasks -- such as patch management and network monitoring -- can be outsourced to ensure businesses can focus on more innovative projects.
I don't want to paint managed services as a cure-all IT solution for small and mid-size businesses.

But, MacLeod's strategy at Accu-Sort reinforces the fact that progressive businesses are embracing reliable, predictable, cost-effective managed services -- regardless of the economy around them.

Overcoming the Psychological Barriers to On-Demand Services

It is time for IT and business decision-makers to get over their fears of 'out-tasking' various aspects of their daily operations to specialized service providers.

Today's turbulent economic climate, intensifying competitive landscape and changing workplace requirements demand that organizations of all sizes re-think their business technology sourcing strategies.

What I believe is still inhibiting many IT or business decision-makers from adopting Software-as-a-Service (SaaS) and managed services are a few common misconceptions and interrelated fears.

Gain New Perspective, with Sharp Focus
For instance, too many IT and business decision-makers continue to resist a growing assortment of SaaS and managed services which can address their business application and IT management needs because they are concerned about losing control, sacrificing performance and/or dealing with additional security risks.

While all of these are legitimate concerns, THINKstrategies has found that they are not real issues when it comes to today's SaaS and managed service offerings.

Instead, most of these services have achieved better performance and higher security levels than many in-house application and IT operations. They also have achieved these service levels with lower upfront costs, quicker deployment cycles and less ongoing management requirements.

As a result, most SaaS and managed service users gain greater ROI on their IT/applications at a lower total cost of ownership (TCO), by focusing their efforts on overall business impact.

An Adaptable Coexistence Strategy
Many IT/business decision-makers also believe that SaaS and managed services are only appropriate for small organizations with limited financial resources or internal skills, and relatively simple functional requirements. Said another way, they think SaaS and managed services aren't sophisticated enough to address the complex needs of mid- to large-scale enterprises.

The reality is that there are a wide array of SaaS and managed service offerings which can address organizations of various sizes. Small businesses can fill voids which they couldn't afford to address with traditional applications or management products with many SaaS and managed service offerings. Mid-size and large-scale enterprises are also finding plenty of SaaS and managed services to fill unmet needs, or augment and extend the value of their existing software and systems.

The Fearless Agents of Change
Too many IT managers view SaaS and managed services as outsourcing solutions that could ultimately make them replaceable.

While this is possible, it is more likely that SaaS and managed services can help IT managers overcome the day-to-day challenges of deploying and administering software and systems, so they can refocus their time and energy on better supporting the more strategic needs of their business units and end-users.

The bottom-line is that IT managers can no longer justify doing business as usual. The sooner they put their fears of SaaS and managed services aside, the sooner they will be able to leverage these services to better serve their organizations and safeguard their positions in an uncertain world.

Closing the Business Video Communication Gap

According to Matt Cowall at Appia Communications, if you look around the business video communication landscape today, you'll see two extremes in predominant use within the marketplace.

At one end are TelePresence and other highly sophisticated solutions. These are expensive and largely aimed at the enterprise market, but the quality of the video experience is excellent.

At the other end are PC- and Web-based solutions. These products are inexpensive, but often lack the quality and reliability that business users require.

Mid-Market Video Requirements
Somewhere in the middle, SMBs and similar organizations hope for the best of both extremes -- high video quality and reliability at an affordable price.

But a recent convergence of circumstances and next-generation technologies appears to be closing the gap in both directions, fueled by:
  • The soaring costs, hassles, and inefficiencies associated with travel
  • The slowing of the economy, which puts a premium on doing more with less
  • The focus on reducing carbon emissions
  • Internet Protocol (IP) technology, which cuts video transport costs, especially in comparison with traditional ISDN services
  • New video compression codecs
  • The emergence of Video as a Service (VaaS)

The Rise in Virtual Meetings

Case in point: in survey results released last month by the National Business Travel Association, travel buyers from over 320 U.S. companies reported a 57 percent increase in the use of videoconferencing, and 81 percent of those respondents said that the increase is due to a deliberate replacement of travel with video.

Video communication is on the rise, but how will "the middle" fully adopt and employ it? What mix of products and services will meet the demand? It will be fascinating to find out. Maybe next time, we can discuss it face to face.