Key event reveals debate on services and standards as new customers emerge Managed Services is now a mature business sector, although by its nature, it will continue to stimulate new entrants, innovations and growth as it takes over from the traditional IT industry. This still requires many changes in the industry, especially in sales styles and the way it addresses its customers. These were some of the conclusions from the successful Managed Services and Hosting Summit (below) held in London on 17 September.
However one of the issues in what is still a fast developing area is customers holding back from decisions because of so many changes - “analysis-paralysis” as one speaker put it. MSPs need to get smarter at understanding their customers and their potential areas for technology upgrade, as well as knowing how the different users among customers respond to the use of technology.
It was clear from the start that a lot of the changes will affect how both the new breed of managed services providers and other service providers and resellers sell their solutions. Mark Paine of Gartner used his research to show how traditional inbound sales techniques such as telesales were giving way to better customer communications generally with a better informed customer also providing impetus to sales. He said that selling to the new type of customer would be a challenge, with some 45% of IT spend already decentralised and rising.
While some of the debate later was on the possible commoditisation of the sector, clear guidance was given by David Bellini, president of ConnectWise, who has been selling managed services in some form or another for 25 years. He said that he was always sure of a premium over other service providers because his people were better, could sort issues out quicker and was generally more reliable. “The commoditision scare comes round every few years, and we've seen them off each time,” he argued. But it did depend on better internal management of the managed service provider. “Everything has a ticket, including people,” he explained.
It was the ability to monitor everything including customer expectations that lay at the heart of the success of the “services” part of a managed services business. A lively debate on services provision agreed that while hosting companies, suppliers and MSPs themselves understood most of the contract terms and SLAs, the end user often seemed to have a view of what they were entitled to that was at variance with what was provided. This is an area of potential dispute, and one that MSPs themselves, and their suppliers need to pay close attention to.
Customers' rising expectations was a constant theme in the debates, and this is such a fast moving industry that what was perhaps regarded as a special term a year or so ago is now standard, he said. This move will be given an extra twist by the millenials now in the workforce. These people expect always-on communications, constant innovation and are less keen on face-to-face engagement; even turning against voice and phone communications. As customers, they will have very different demands on managed services from earlier generations, yet the MSPs will need to cater for a wide range of circumstances.
Mark Banfield, VP of International, Autotask talked about the customer experience using technology. Autotask did a survey earlier this year and found quality of service, on time, to budget and specification was important; and it is also about a working relationship between MSPs and their customers. “And getting customers to ask you for advice, through a single point of contact,” he says. “Lastly price – which should not become an issue if you get the other things right. This works for us, we are absolutely not the cheapest in the market; we obsess about the customer experience.”
There are plenty of new technologies which are starting to impact connectivity and productivity trends in the datacentre said Bob Aitchison, Sales Director, QLogic. He cited the new connectivity levels for ethernet which will deliver not just greater speed and lower running costs, but more abilities in terms of management. The massive scale needed by cloud companies is driving the hardware market, and small changes in performance can mean very large savings at hyperscale. “We are moving to a commoditised server, generic hypervisor and some sort of storage with apps that link into common apps below them.” The vendors do not care whose individual parts are used so long as you use their cloud platform. With data moving faster and faster through the datacentre, the pressure is on the connectivity, hence the 25Gb, 50Gb and 100Gb technology roadmap which can be used easily and will gives users early benefits, giving more bandwidth at lower cost.
SolidFire CEO Dave Wright explained how his business was built specifically to work with service providers. “We sit behind many of the largest service providers in the world, with 100,000 customers. As a storage company we probably have the largest percentage in the service provider space of any storage company today. So this is an area we know a lot about, and where we work with customers to improve.”
The success of the cloud in some ways causes “analysis-paralysis”, however. where customers wait for the market to shake out, prices to stabilise and getting these customers to move is an issue, he said. There is a missed opportunity on differentiation - “We see that there are a lot of problems in identifying differences – in many cases customers can't do this and tend to go with brands or names they know. Many service providers are struggling with ways to stand out from the crowd, and in some ways this is limiting their success.”
Nadia Karatsoreos, Community Manager, MAXfocus had an updated presentation with new data, collected from its customer base of some 12000 service providers worldwide. “Data is at the core, and we monitor 2 million endpoints.” She outlined how a new system will support MSPs with insights into trends among users.
Organisations of all types from SMB up to enterprise have become more critical when it comes to data – the consequences of lagging data has become more pronounced. The management and analytics of big data is a whole new issue. MSPs customers see email and instant messaging as providing the fastest growing cause of data growth.
The clear talking point throughout the day was about growth and expansion, while it was clear that everyone regarded managed services as a sector as having arrived. As Nadia Karatsoreous said in the final debate: “It is forever evolving; we re in the middle, probably the best place possible. There is no end point, though.” Also optimistic on this question was Bob Aitchison, sales director at QLogic “We are still finding customers who are just starting out on this.”
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