Managed Services, Monitoring Services and Basic IT Support Services - Pros and Cons and How to Choose

Managed Services, Monitoring
Services and Basic IT Support
Services – Pros and Cons and
How to Choose
#12NTCITsup
Lisa Rau

3/25/12 www.ConfluenceCorp.com | @ConfluenceCorp

Agenda
• Definitions
• History
• Background on IT Support Business Model / Types of Plans
/ Models
– HaaS; Fully managed; On-site Hourly; Everything in between
• Where is the industry heading?
• What type of model might be right for you?
• Pros and Cons
• What are others doing?
• How do these types of plan work?
• Selecting the Model / Questions to ask
• Case Study
3/25/12 www.ConfluenceCorp.com | @ConfluenceCorp 2

Takeaways
• What different support models (managed,
monitored, basic) entail
• What the pros and cons of the models are
• How to select a model that is right for you


Introductions
• Lisa Rau
– CEO and co-founder, Confluence
(www.confluencecorp.com)
– Computer Scientist
– 20 years experience in IT / support services
industry


Introductions - Confluence
Mission:
– To help our nonprofit clients achieve the greatest
strategic value from their technology resources
• Founded 3/01
• Close to 500 clients nationwide
• Over 30 full time staff and consultants
• 95% of our work is for the nonprofit sector


Breadth of Services
• Open source implementations
– CiviCRM, Joomla, Drupal, custom web software
• Strategic technology consulting
• Website design, development support
• Salesforce implementation
• Interface Design
• Full branding, print and graphic design
• Infrastructure Support


Services Breakdown


Introductions – Lisa Rau
• CEO and co-founder, Confluence
(www.confluencecorp.com)
• Computer Scientist
– BS, MS in Computer Science from UC Berkeley
– Ph.D. from University of Exeter specializing in
Information Retrieval and Artificial Intelligence
– 20 years experience in IT / support services industry
• VP on the Board of the YWCA of the National
Capital Area
• Peer Reviewer, for MD Nonprofits’ Standards of
Excellence Program
3/25/12 8
www.ConfluenceCorp.com | @ConfluenceCorp

Definitions
• Managed Services vs. “Break / Fix”
• Remote Monitoring and Management (RMM)
• Managed Service Provider (MSP)
• Professional Services Automation (PSA)
– Ticketing, Dispatch, Configuration, Escalation, Billing
• Customer Premises Equipment (CPS)
• Network Operations Center (NOC)
• "Hardware as a Service"
• Small Medium Business (SMB) < 1,000 staff

History
• Before 2000, everything was “break / fix”
• In between:
– Preventative, scheduled maintenance visits
– Combined with break/fix as needed
• Enter – Managed Services
– Transfer day-to-day tasks to Services Provider
– Fundamental Dimensions
• What Devices are covered
• What Services are provided
• Monitoring only, or monitoring and fixing


RMM from LabTech
• Remote, proactive monitoring of computer
and network health
• 24x7 issue detection and reporting
• Efficient issue resolution from a remote
location
• Comprehensive set of IT management tools
accessible


RMM Attributes from LabTech
• Remote agents connect
– Without VPNs, firewall issues or router
configurations
• Can perform tasks for clients while offline
• Enables technicians to fix problems without
logging directly into the affected machine
• Problems can be resolved remotely
– From the agent and console
– While a client is still using a computer or server


What Devices are covered
• Anything “smart”
• Server
• Desktops
• Firewalls
• Surge Protectors
• Software systems, including remote access
• Website(s)
• Network (LAN or Internet)
• PDAs (which ones??)
• Printers / Copiers / Other Peripherals?


What Can be Included
• Alerts • Options
– Uptime – Backup
– Storage – Spam filters
– Connectivity – Mail bagging
– Backup
– Web hosting
– Security (virus and
patches)
• Security (Anti-virus)
• Patch Management
• Backup


IT Support Business Model
• Types of Plans / Models
– Fully managed
– On-site Hourly
– Everything in between
• Next up: RMM in the Cloud
• Prices are dropping / Competition is here


"Hardware as a Service" models
• Differs from leasing in that support is included
in hardware cost
• Buyout provisions
• Even MORE predictable IT expenses
• Benefits in speed of provisioning


Sample Offerings in the RMM Market
Space
• All are the same; all are different
– Kaseya
– LabTech (purchased by ConnectWise)
– N-Able
– Citrix GoToManage (formerly Paglo)
– Level Platforms
– Windows InTune
• N-Able says nearly 80% of SMB devices are
unmanaged

Magic Quadrant – Gartner Client Services


Where is the Industry Heading?
• Gartner in 2009
– Forecast had RMM growing at +30 percent CAGR
rate through 2012
• Significant pricing pressure in RMM services
made the offerings more attractive and
available to SMBs
• Vendors have found the SMB to be their
fastest growing market segment


Where is the Industry Heading?
• Insight Research Group
– 2011: Managed services market would experience double-
digit growth through the next four years
– U.SS. managed services market will balloon from $29
billion in 2010 to $47 billion in 2015
• Visiongain
– 2011: Global MSP market will reach $86 billion by 2016,
from an estimated size of $55 billion in 2010
• CEO of MSPAlliance: “service providers are going to
need to learn to change their services to adjust to the
shifting technology demands of their customers”


RMM Models / Vendors
• Some develop and sell a PSA software
• Some are owned by a company that also
develops and sells a standalone RMM
(Remote Monitoring and Management)
software
• Some include complete PSA in their RMM
software


What is Right for You?
• Focus on mission, not IT
– Managing contractors is a skill
• Service Level Agreement
• Predictable Pricing
• Users preferences
– Personal touch
– 1-800- Help Me Now


Pros and Cons – Managed Services
• Items are always out of scope
– Personal smart phones
– Computers over X years
• Multi-year Commitments
• Theory:
– It costs more to fix a problem after it occurs
– Down time is a cost
– No travel time charges or delays
– Multi-tasking – perform one operation of multiple
machines at once
• As more migrates to the cloud, less needs to be
managed by a MSP

Advantages and disadvantages of
these different approaches?
• Capital expenses vs. Operating Expenses
• Control
• Security
• HaaS
– Guaranteed Refresh
– Lease vs. Buy


Cisco’s View of Key Benefits of
Managed Services
• Reduces costs, including traditional service fees, hardware, IT
• operations, and transport
• Eases adoption of new business processes
• Increases levels of support and network availability without
additional staff
• Makes the IT budget more stable and predictable
• Provides access to the latest technology with limited risk
• Provides access to an enhanced skills base
• Makes it easier to adapt to changing business conditions
• Enables the IT group to focus on the core business


Scenarios for RMM – Presenting
Problems
• 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
• Operating in real time / 24-hour demand


Scenarios for RMM
• The scope or scale of current business
operations is changing
• Preference to dedicate resources to core
competencies and mission critical processes
– Rather than network support activities
• Managed services is viewed as a good strategy
for gaining efficiencies and reducing costs
• Concern with ability to keep up with the latest
security threats and to meet privacy or security
regulations


How to Select a Vendor
• Trust
• Cost
• Lock-in
• Up-front cost
• Guarantees
• Inclusions and Exclusions
• References
• Match between your culture / their process
– Single POC or “free for all” help desk?

What to Look For
• Service Level Agreements
– Response time and remedies
– Response time triggers
• Tailored proposal
• Documentation provided
• Tools Used (length of time, not home-grown)
• Bench strength
• Visit NOC


What to Look For
• Transition plan
• Account management plan
• Staff training, investment, retention
• Staff certifications, credentials, experience
• Other services
• Customer focus
• Responsiveness and proactive IT leadership
– This is actually hard!


What are Others Doing?
• 2010 Southwestern PA Nonprofit Tech Survey;
Bayer Center for Nonprofit Management,
Robert Morris University - 260 organizations


• NPower 2009 Survey of 1,019 nonprofit respondents
• Outsourcing IT support:
– One third completely outsource their IT needs,
– One third uses a combination of external and internal support
– Rest has either opted out of or are considering outsourcing
• Independent of method, one third are either not satisfied
or somewhat satisfied with their current technology setup.
• The main issues with current IT support solutions include:
– Responsiveness (56%)
– Cost and quality of service (1 out of 4)
• A lack of available resources is a major contributor


How do these types of plan work?
• Agent installed on managed devices
• Images of machines centrally managed
– Reimage rather than debug approach
• When all support is included
– Vendor incentivized to fix problems quickly
• No, hourly contractors do not want to create
work, even when paid by the hour


What is included in them?
• SERVICE PLAN ON DEMAND SERVICE BLOCK HOUR PLAN MANAGED SERVICES
• Rates Standard Reduced Fixed
• 1 Hour NW Eval FREE FREE FREE
• Remote Local Support Hourly Hourly Unlimited
• Onsite Support Hourly Hourly Unlimited
• VOIP/Phone Syst Support Hourly Hourly Unlimited
• Weekly Monitoring NO YES YES
• Online Tracking NO YES YES
• Server Maintenance NO NO YES
• Exchange Maintenance NO NO YES
• Inventory Reports NO NO YES
• Patch Management NO NO YES
• File Restore Test NO NO YES
• Discount on Projects NO NO YES


Pricing Analysis Considerations
• You know to know your current costs
• Try to “apples to apples”
– Number “incidents” included
– Help desk
– Hours of support included
• Smaller is usually Cheaper
• Expertise is usually more expensive in hourly
rate but not overall terms

How to Evaluate Expected Cost
• 4-6% of revenue spent on technology - YMMV
• $1,000 - $3,000 per machine
• Best predictor of future is past
• Hourly support is minimum cost if each hour is
productive / not preventable


What kind of monitoring makes sense
and what is a waste of time and why?
• Vendors will have set up their own thresholds
and conditions
– What’s important to you may be different from
what vendor thinks is important
• Monitoring consumes bandwidth
• Time to look at alerts is factored into pricing


Case Study by Customcpuview.com
• Typical nonprofit:
– 30 user desktops
– Three servers (one Mail server, one Database server and
one File/print server)
– One router, one switch and one network printer
• Self-managed:
– Hire one full-time staff – a decent network or IT
administrator
– At $45K, with benefits, sick, vacation, payroll tax, training
– $10K for internal management
– Training $12,975
– $60,475 annually and ~$10,000 one time expense


IT support on break fix or hourly
model:
• Third-party vendor to manage IT infrastructure
• $100 per hour with an average call time of 1.5 hour per
call and $25 travel charges.
• One call per server per month
• Eight calls for workstations per month
• Two calls per month for Firewall, Switches and Network
Printers
• $2,275 per month or $27,300 / year
• Average 40% of the IT issues are managed by the
vendor,
• Balance being handled by end users


Managed Services:
• Proactive monitoring of servers
• Preventive maintenance on desktops
• Maintenance of Network devices
• End-users can call help desk
• $59 per month per desktop
• $199 per month per Server
• @$49 per month for Network devices
• Annual cost $30,168


Summary – Sample Comparison
• Self-managed: $60,475 and $10,000 setup
– $35K lost productivity
• Break fix support: $27,300
– $70K lost productivity
• Managed Services: $30,168
• $14K lost productivity
• Lost productivity computed @ $35 per hour


• Soft ROI factors - Self-managed
• Average time to response is dependent on
workload.
• Percentage of IT problems addressed 100%
• Loss of productivity per year, per employee 25
hours, 1000 hours total, estimated dollar cost
$35,000.
• Type of support is reactive
• Performed during business hours

Soft ROI Factors - Break Fix Support
• Average time to response is one day depending
on workload
• Percent of IT problems addressed is 40%
– End users try to fix some issues by referring to their
colleagues to avoid the cost of calling for IT help
– Sometimes live with the problem
– Loss of productivity per year, per employee 50 hours,
2000 hours total, estimated dollar cost $70,000
– Type of support is reactive
– Performed during business hours


Soft ROI Factors - Managed Services
• Average time to response is a guaranteed 2 hours
• Percent of IT problems addressed is 100%
• End users report all problem
• With remote control, problems resolved
immediately for 93% of issues
• Loss of productivity per year, per employee 10
hours, 400 hours total, estimated dollar cost
$14,000
• Type of support is Proactive monitoring
• 24×7 basis


Managed Services
• Advantages
– Proactive management of IT infrastructure
– 24 x 7 monitoring by a group of experts
– Remote Management reduces mean time to repair
– Comprehensive management system for Desktops, Servers, and
Networks
– Reporting portal – access to inventory, availability and performance
– Enterprise Class IT management platform using Industry best practices
– Predictable monthly billing
– SLA based
• Disadvantages
– Dependency on third party
– Slightly Higher cost
– Most work performed off-site so Customer does not see the
techengineer


Break Fix Reactive Support
• Advantages
– Classical Model / Easy to Understand
– Friendly vendors
– Eliminates headache of hiring staff, training and system
maintenance
• Disadvantages
– Reactive treatment
– No 24×7 monitoring
– Pay as you use (unpredictable bills)
– Pay when systems are “Down”
– Lack of expert group support
– Delay in attending to problems due to physical travel to-site
– Dependency on third party


Self Managed
• Advantages
– In house IT management process
– Choice of management tools
• Disadvantages
– IT management not a core business activity
– Retaining IT experts may be difficult
– High cost of training manpower


Takeaways – Sanity Check
• What different support models (managed,
monitored, basic) entail
• What the pros and cons of the models are
• How to select a model that is right for you


TIME FOR QUESTIONS!!


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