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


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  • 1. Managed Services, Monitoring Services and Basic IT Support Services – Pros and Cons and How to Choose #12NTCITsup Lisa Rau3/25/12 | @ConfluenceCorp
  • 2. 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 Study3/25/12 | @ConfluenceCorp 2
  • 3. 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 you3/25/12 | @ConfluenceCorp
  • 4. Introductions• Lisa Rau – CEO and co-founder, Confluence ( – Computer Scientist – 20 years experience in IT / support services industry3/25/12 | @ConfluenceCorp
  • 5. 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 sector3/25/12 | @ConfluenceCorp
  • 6. 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 Support3/25/12 | @ConfluenceCorp 6
  • 7. Services Breakdown3/25/12 | @ConfluenceCorp 7
  • 8. Introductions – Lisa Rau • CEO and co-founder, Confluence ( • 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 Program3/25/12 8 | @ConfluenceCorp
  • 9. 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 staff3/25/12 | @ConfluenceCorp 9
  • 10. 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 fixing3/25/12 | @ConfluenceCorp 10
  • 11. 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 accessible3/25/12 | @ConfluenceCorp
  • 12. 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 server3/25/12 | @ConfluenceCorp
  • 13. 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?3/25/12 | @ConfluenceCorp
  • 14. 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• Backup3/25/12 | @ConfluenceCorp
  • 15. 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 here3/25/12 | @ConfluenceCorp
  • 16. "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 provisioning3/25/12 | @ConfluenceCorp
  • 17. 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 unmanaged3/25/12 | @ConfluenceCorp
  • 18. Magic Quadrant – Gartner Client Services3/25/12 | @ConfluenceCorp
  • 19. 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 segment3/25/12 | @ConfluenceCorp 19
  • 20. 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”3/25/12 | @ConfluenceCorp
  • 21. 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 software3/25/12 | @ConfluenceCorp
  • 22. 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 Now3/25/12 | @ConfluenceCorp 22
  • 23. 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 MSP3/25/12 | @ConfluenceCorp
  • 24. Advantages and disadvantages of these different approaches?• Capital expenses vs. Operating Expenses• Control• Security• HaaS – Guaranteed Refresh – Lease vs. Buy3/25/12 | @ConfluenceCorp
  • 25. 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 business3/25/12 | @ConfluenceCorp
  • 26. 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 demand3/25/12 | @ConfluenceCorp
  • 27. 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 regulations3/25/12 | @ConfluenceCorp
  • 28. 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?3/25/12 | @ConfluenceCorp
  • 29. 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 NOC3/25/12 | @ConfluenceCorp
  • 30. 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!3/25/12 | @ConfluenceCorp
  • 31. What are Others Doing?• 2010 Southwestern PA Nonprofit Tech Survey; Bayer Center for Nonprofit Management, Robert Morris University - 260 organizations3/25/12 | @ConfluenceCorp
  • 32. What are Others Doing?3/25/12 | @ConfluenceCorp
  • 33. What are Others Doing?• 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 contributor3/25/12 | @ConfluenceCorp
  • 34. 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 hour3/25/12 | @ConfluenceCorp
  • 35. 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 3/25/12 | @ConfluenceCorp
  • 36. 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 terms3/25/12 | @ConfluenceCorp
  • 37. 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 preventable3/25/12 | @ConfluenceCorp
  • 38. 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 pricing3/25/12 | @ConfluenceCorp
  • 39. Case Study by• 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 expense3/25/12 | @ConfluenceCorp
  • 40. 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 users3/25/12 | @ConfluenceCorp
  • 41. 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 $30,1683/25/12 | @ConfluenceCorp
  • 42. 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 hour3/25/12 | @ConfluenceCorp
  • 43. • 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 hours3/25/12 | @ConfluenceCorp
  • 44. 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 hours3/25/12 | @ConfluenceCorp
  • 45. 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 basis3/25/12 | @ConfluenceCorp
  • 46. 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 techengineer3/25/12 | @ConfluenceCorp
  • 47. 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 party3/25/12 | @ConfluenceCorp
  • 48. 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 manpower3/25/12 | @ConfluenceCorp
  • 49. 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 you3/25/12 | @ConfluenceCorp
  • 50. TIME FOR QUESTIONS!!3/25/12 | @ConfluenceCorp 50
  • 51. Evaluate This Session! Each entry is a chance to win an NTEN engraved iPad! INSERT QR CODE HERE or Online using #12NTCITsup at | @ConfluenceCorp