A recent research study by Untangle provides some very nice data points around the managed services profession. One data point in particular caught my eye as an important lesson for all MSPs and that is automation.
According to the report once a MSP reaches approximately 500 managed devices they will need to achieve service delivery automation efficiencies in order to continue their growth. This is one of the key differentiators between a real MSP and a break/fix VAR doing remote monitoring. The real scalability of a MSP is in the efficiencies of scale achieved only when basic management tasks can be automated. When these tasks are automated this frees the MSP to do other more high value functions that make them more relevant in the eyes of their clients.
This is such an important concept and yet one that can be easily dismissed as trivial by many companies. Whether it is 500 devices or some other number it is crucial for MSPs to realize when they are reaching this point and know how to get beyond it. I have seen too many MSPs hit this so called "wall" and the inability to scale beyond it can have devastating results.
To end on a positive note though, there are some pretty easy stpes you can take that will help. First, having access to the right metrics will greatly help you understand where that wall is and how quickly you are racing towards it. Second, having the right technical people and being able to manage them effectively will also be a great help. And lastly, none of this scalability will occur without the right tools. Your technical people must be equipped with the right tools in order to become efficient and automated.
Kudos to Untangle for making this report available!
Thursday, July 17, 2008
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6 comments:
You can get a copy of the study at:
www.untangle.com/mspstudy
Any advice or ideas on obtaining a copy of the study if you are not yet an Untangle Partner?
Not sure. As a vendor I don't know if you are eligible.
You may also want to look at the 2008 State of the Market report
http://www.mspalliance.com/index.php?option=com_content&task=view&id=1246&Itemid=155
Michael
We at Cisco consult with MSPs all the time to help them design, build and operate successful and profitable managed services businesses and, for the emerging MSP, these are exactly the kind of issues we come across and agree with your comments
Up to a certain scale MSPs can gain a foothold in the market via labor intensive delivery alone and through this method they can expect to get significantly better margins over a traditional professional services business. However to really enjoy the >50% margins that a managed services business they have to achieve some kind of economies of scale ... and in our experience that can only come with investment into network management tools. When this kind of investment happens you see NOC measures move increasingly to ticket closure metrics - so called MTTX - (Mean time to Identify, Isolate, Notify, Resolve etc) and specifically the level of resources that need to be applied to resolve the issue. This investment is a step function in cost to be sure - and can be fairly binary in its nature.
Will Scott
wiscott@cisco.com
I think the inability to scale is fear. Mired in analysis, the unwillingness to step outside the confort zone, is the major reason MSP's can't scale. Really, I've seen spreadhseets, Visio diagrams that would make your head spin, but no one has the TF to say, "OK, let's do this!"
Ten years ago, I would argue the tech, but these days, it's just enable.
sf_akrn at yahoo dot com
There is a link on the site to get it even if you are not a parter. I just did yesterday. Otherwise contact:
Greg Cohen
Marketing Director
Untangle
gcohen@untangle.com
ph: 650-425-3326
www.untangle.com
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