How to Choose the Right MSP
When looking for additional help on the technology side of your business, a Managed Service Provider may be the help you need. Managed service providers (MSPs) are companies that can manage IT services for a company through the Web. In an article from Redmond, Scott Bekker explains many of the reasons for using an MSP, as well as questions to consider so that you can choose the right one for your company. The following is excerpted from his article, Picking the Right MSP. To read the full text, follow the link at the bottom of the page.
Starting off, you must consider what you want to get out of an MSP.
- Greater efficiency – sectioning off some IT duties and outsourcing them at a fixed monthly cost to an MSP could bring cost savings, presuming that through its repeatable processes and presumed scale, the MSP could do the tasks better than your internal department and still make a profit from the service.
- A refocusing of tasks – refocusing your IT department on higher-order tasks, for example, can drive business value by improving or creating line-of-business applications rather than patching servers and chasing down helps desk tickets.
- A new transition – transitioning your IT infrastructure to a cloud-first approach may require professional help that can manage the move and administer those cloud services on your behalf.
- Expertise in the Industry – MSPs can bundle high-value vertical solutions along with standard IT services, and that total package could give your company a competitive advantage in your geographical area.
MSPs are one of the hottest options for delivering IT products and services to businesses nowadays. According to last year’s MSP business model survey conducted by tech industry association CompTIA, managed services are the second-most popular business model among those delivering technology on behalf of system infrastructure vendors.
If you’ve worked with a Microsoft partner or another type of IT services provider before, working with an MSP is slightly different. While systems integrators are often engaged on a project-by-project basis—and even many service contracts are a sort of break-fix retainer relationship—MSPs ideally present a monthly bill for services that doesn’t vary depending on how many problems arise. Initiation of MSP relationships can result in an up-front service bill for some MSPs who require that customers come up to a certain infrastructure standard that they feel they can guarantee, but after that the risk falls on the MSP’s shoulders. The more smoothly your infrastructure runs, the more profitable the MSP is: a win-win. The rockier your experience—and the more hands-on the MSP needs to be—the less profitable it is for the MSP, meaning your pain is its pain, as well.
There is a lot to consider before choosing an MSP. It requires deep evaluations of whether the costs of an MSP will really result in savings when the actual bill comes due if the move is about efficiency, whether the current IT staff has the ability to grow into higher-value roles if it’s about repurposing low-level IT spending into investing in business-growth IT, and whether those cloud or vertical bundles will be better or more efficient for your company, among other things. Before picking an MSP, the following are some questions to consider so you can choose the MSP that is right for your company.
WHAT IS MY CUSTOMER SIZE? AM I IN THIS MSP’S SWEET SPOT?
Characteristics of MSPs are radically different depending on what size customers they typically serve. The biggest group of MSPs serve small and midsize businesses (SMBs) that are looking for a generalist to take care of all of their IT needs. This one-stop-shop style of MSP often emerges out of the Microsoft Windows Small Business Server market, and it tends to interact directly with the president or owner of the company, helping set overall technology strategy and then handling maintenance of IT systems. MSPs that work directly with IT managers tend to be focused on midsize organizations. They can be general-purpose MSPs that stand in for much of the IT department. While those types of contracts tend to be for smaller midmarket companies, there are general-purpose IT services contracts that handle most technology needs for very large companies. More commonly, midmarket and enterprise shops might contract with one or more MSPs to meet specific needs — for example, a managed security services provider (MSSP). For midsize organizations and larger, the use of MSPs ideally can free up the IT department for higher-order tasks.
DO I SEE EYE TO EYE ON CLOUD?
Integrating cloud services with IT infrastructure is a train that most observers think has left the station. Yet just as many IT departments haven’t gotten on that train, a surprising number of MSPs feel the same way. The issue is especially common among SMBs, where small MSPs that got their start with Small Business Server still favor on-premises solutions.
As CEO of St. Petersburg, Fla.-based connectwise Inc., Arnie Bellini often speaks to MSPs about the cloud. Microsoft’s pricing strategy on Office 365 is making the cloud productivity suite increasingly compelling for all businesses from small organizations to enterprises. “If you look at the pricing strategy, it’s very difficult for any company to justify not going to Office 365,” Bellini says. Yet, he sees a surprising lack of movement among MSPs that are actually taking customers to the cloud.
Another ISV executive with a broad view of the MSP landscape is Geeman Yip, CEO of bittitan Inc. Yip says modern MSPs are developing deep expertise in integrating a full set of cloud applications to maximize value for their customers. “A cloud-first approach is really important because organizations are already asking for these cloud/SaaS-type of applications,” Yip says. “If you look at the buying cycle, it used to be a single ecosystem, like a Microsoft shop or a Linux shop. Now organizations are moving into what I call a cloud shop. It is a multi-ecosystem environment that can span Amazon, Azure, Office 365, Salesforce, etc.”
No matter whether you’re on board with becoming a Yip-style “cloud shop” or you want to keep as much of your infrastructure on-premises for as long as possible, you’re best served by an MSP that understands the pitfalls and benefits of several approaches and can lay out a full menu of options. WHAT IS THE MSP’s COMMITMENT TO PROVIDING MANAGED SERVICES?
Just because a company bills itself as an MSP, doesn’t mean managed services make up the bulk of its business. Demand for managed services, especially, is driving a lot of Microsoft-focused systems providers to add these services to their portfolios, but those services are in various stages of development. A central issue among Microsoft’s hundreds of thousands of them is that upgrading Exchange Server every three years for a set of customers was a solid business. The blossoming of Office 365 has challenged that business model, causing those partners to look for other opportunities and causing Microsoft to try to steer them to the MSP model. “Partners are getting hammered by Microsoft and others to become managed services providers and to evolve beyond project services,” says Christopher Hertz, former president and founder of New Signature.
With his lens into that community, bittitan’s Yip says movement is relatively slow. “When we look at where they are today, about 80 percent of them really are professional services organizations and one-time project services. Less than 20 percent of them actually have any sort of recurring revenue or managed services type of offerings for their customers,” Yip says.
One pro tip: Ask about playbooks. “One of the biggest challenges of managed services is reliable delivery. Consistent delivery of service excellence is really, really hard to do,” says Hertz. MSPs with detailed checklists, playbooks, runbooks or standard operating procedure manuals covering the services you want them to provide to you probably have their act together.
WHERE DOES THE SERVICE LIVE?
When it comes to MSPs, it’s good to get into the nitty gritty on certain things. One is the help desk. If you’re considering moving your help desk functionality into an MSP, it’s important to understand exactly what the MSP is offering. Many MSPs say they have 24×7 help desk, but they’re not necessarily offering it. Instead, they may be white-labeling the service. In other words, they are contracting with a bigger provider who answers the phone under the local MSP’s name either 24×7 or at nights or on weekends. That’s not a bad thing, necessarily—sometimes if you’re contracting with a small MSP, it’s hooking you into a better and more robust service than its techs could provide or the use of a third-party provider will reduce hold times. On the other hand, it might be an offshore service with possible language challenges or the provider of the third-party help desk may be low quality. Whatever the MSP has may work well for you, just be aware of the nuance and ask.
Another area is backup and recovery. Don’t take an MSP’s word that the backups are running as scheduled and working, no matter how good its documentation looks. Make sure you frequently work with the MSP to regularly test recoveries to ensure that backups are current and the MSP’s backup provider is capable of bringing your business back into operation in case of an outage. IS MY MSP SEARCH BROAD ENOUGH?
Before you commit to a provider, there are a few resources for gathering a few more proposals on your own. One organization working to set standards and establish best practices is the MSP Alliance, an international association of cloud services providers and MSPs. The MSP Alliance offers an accreditation called the Unified Certification Standard for Cloud & Managed Service Providers. Several media lists of top MSPs are out there, as well.
Leveraging an MSP can make your IT department more efficient and effective under the right circumstances, if you choose your provider carefully by asking the right questions.