MSP University Managed Services Blog

Virtualization and Cloud Computing

I recently received the following question from one of our Partners:

"I’ve been noticing Microsoft is getting closer and closer to Cloud Computing and lately announced Exchange Server via the “cloud”. Where does Managed Services fit in? Does Managed Services have a future with Cloud Computing? What are your thoughts and how are you preparing for the future of “Cloud Computing”?"

Having just returned from Everything Channel's (formerly Gartner's) ITChannelVision conference, where statistics presented support my belief that Virtualization and Cloud Computing are the "next big thing".

irtualization is here now, and in a big way. With vendors like HP shrinking blade servers to the point that you can fit 144 servers in a rack half the size of a standard datacenter rack and consuming half the power and requiring half the cooling, hosting service providers have a cost-effective hardware solution to leverage.

Cloud computing in a business environment will take a bit longer to grow, as today's business owners operating traditional businesses won't be early adopters, but the new "Millenials" already are. Here is my reply to our Partner:

"Virtualization and Cloud Computing are the next big things, and MSPs must position themselves to take advantage of hosting opportunities as Manufacturers and Vendors begin spending marketing dollars to educate prospects and sell these services to them directly.

We must leverage these marketing efforts to agree with the importance and benefits of Virtualization and Cloud Computing when it makes sense for our clients (addresses their business needs – improves efficiencies, reduces pain and mitigates risk)

I see the promise and  benefits of Hosting and Virtualization immediately for clients, and Cloud Computing a little further off when the “Millenials” enter the workforce, as they are more likely to have grown up in the cloud (texting, Facebook, MySpace, Gmail, Google Apps, etc.) and thus be more open to starting or running their businesses or meeting their job responsibilities through Cloud Computing and Services. To take advantage of these opportunities, we must be agile enough to influence, deliver or manage these services directly and layer value-added benefits over the top to keep our relevance as Trusted Advisors."

What are your thoughts? I'd like to hear your feedback.

Erick Simpson
MSP University

2008, The Economy and minimizing its impact on Service Revenue with vPro

I've just posted a timely blog on Intel's vPro Expert Center regarding the current state of the US economy, where it's heading and what we as Service Providers can do to grow our business during uncertain economic times with the right tools and technology, such as vPro, which lets us manage desktops and laptops when they're out of band (in an "off" state), and best practices processes and procedures, such as those disseminated by MSP University. Here is the intro to that blog:

There has been a lot of chatter lately on the boards and newsgroups I monitor about the economy in 2008, and whether we can classify its current status as an economic downturn, mini-recession, recession, etc. It's been generally accepted by noted economists that we are certainly experiencing an economic downturn, if measured by a significant decline in activity spread across the economy, and lasting longer than a few months. On the other hand, the technical indicator of a recession is defined as two consecutive quarters of negative economic growth as measured by our GDP.

We'll need to wait for this quarter's numbers to see if the US economy will indeed be categorized as in recession, based upon last quarter's decline in growth, even though most economists agree we are heading that way, led by indicators such as the fall of the housing market to its lowest level since 1993, and consumer spending posting its smallest gain since 1991. The most telling news heralding the severity of our current economic climate is Sunday's announcement of the buyout of Bear Stearns, one of the world's largest and most venerable investment banks by JPMorgan, for the fire-sale price of only $2 a share.

So what does this economic downturn mean to us as service providers? Businesses traditionally are much more careful in their spending during times of economic uncertainty, and I.T. projects are normally among the first batch of initiatives to be placed on hold, as clients and prospects tighten their belts to weather the storm. It's important for us to identify this reality and shape our internal processes, deliverables and their supporting technologies, message and value proposition accordingly so that we can take advantage of these opportunities.

To read the entire blog, click here.

Erick Simpson
MSP University
www.mspu.us 

Managed Services – What you need to know in 2008 to be successful

Managed Services – What you need to know in 2008 to be successful

Join my good friend Stuart Crawford and I tomorrow at 9am PST for a great discussion on what we see happening in the IT Service Delivery industry in 2008, and what we as Service Providers can do to weather periods of economic uncertainty, downturns and potential recessions.

Click here to register for tomorrow's webcast.

Also check out Stuart's latest blog post about achieving your business goals here.

See you on the call tomorrow!

Erick Simpson
MSP University
www.mspu.us

Is the concept of Indian Outsourcing threatened?

Sramana Mitra writes that the future of Indian Outsourcing is bleak. In fact, her article on Forbes.com Friday titled “The Coming Death Of Indian Outsourcing”, frames the basis of her argument by indicating that the cost advantage for offshoring to India used to be 1:6, whereas today it is 1:3 at best, with high attrition. She further predicts it will drop as low as 1:1.5 over time.

MItra goes on to say that that automatable Indian jobs will disappear over the next decade. We know that as MSP’s, this concept is not hard to believe – we do it here today. The article continues by stating that India’s tech industry is a “services” industry, and that Indians don’t do the thinking, their customers do, then India executes. As a result, India has failed to learn how to invent technology products of its own.

According to the article, Forbes’ recently published wage statistics for India reflect that salaries rose 15.1% in 2007, up from 14.4% the previous year, with 2008 forecasts of a hike of 15.2.%, signaling the fifth consecutive year of salary growth above 10% - incredible numbers in any job market, and when paired with the devaluation of the US dollar against the Indian rupee, these numbers are even more striking.

Mitra’s final thoughts forecast the cost advantage of Indian Outsourcing disappearing by 2015, leveraging a 15% year-over-year Indian salary hike rate and projecting the aforementioned continued decline in the cost advantage for Indian labor to 1:1.5 over time. Read the entire article here.

These are very interesting statistics and conclusions, as we ourselves have seen our Partners begin to adopt Outsourcing/Offshoring solutions in regions such as Russia and Eastern Europe in 2007. In fact, at the 2007 ConnectWise Summit, I had the opportunity to speak with representatives from a South African organization that were working to put together a back-office support offering for Managed Services RMM Vendor Level Platforms (www.levelplatforms.com).

These indicators signal to us that we will indeed see more Offshoring opportunities move away from India and to other developing nations, as well as back to the United States. IT Distributor Ingram Micro's Services Division is on an aggressive Partner acquisition strategy in this regard with its Seismic offering, which delivers traditional back-office outsourcing services to Solution Providers; and is attempting to differentiate itself from competitors by adding additional products and services valuable to Solution Providers to its Sesimic portfolio, such as email protection and archiving, online backup and restore services and a nationwide network of Partners who can provide onsite project delivery and support services (www.ingrammicro.com/servicesdivision).

Zenith Infotech, the recognized leader in Indian Offshoring and back-office support for MSP’s, has also recognized the reality that, as its back-office services become commoditized and it becomes more difficult to maintain its dominance through delivery of these services alone, it needs to diversify its product offerings to the channel. In this regard, Zenith has recently announced its partnership with A-Server, a Belgian company that has created a mash-up of Virtualization and SaaS technologies to create DaaS – Datacenter as a Service. This announcement follows closely behind Zenith’s BUDR Solution for Partners, whose newest version has just been released (www.zenithinfotech.com).

As both Ingram and Zenith compete for the back-office business of IT Solution Providers, they are either creating or Partnering with other organizations to add value-added products and services to their core Outsourcing attractiveness as a hedge against Sramana Mitra’s predictions.

What do you think? I’d like to hear your comments…

Erick Simpson

Intel and vPro - Why Aren't You Using It?

Intel in the house.

We recently delivered a Managed Services Boot Camp for some of Intel’s Field Service Reps (FSR’s) to educate them on the challenges Service Providers face when transitioning to a Managed Services delivery model. The objective of this Boot Camp was to develop a training program for Intel FSR’s that will give them the tools and education necessary to help their Partners in the field become more profitable by delivering services to their end-user clients, instead of continuing to try to eke out profits from hardware-only, or project-based deliverables.

We all learned much from this initial Boot Camp, and from our viewpoint, understand much more clearly the challenges faced by product vendors such as Intel and Cisco as they try to alter their Partner’s traditional attitudes toward selling solutions from a transactional perspective to a service, or annuity service-oriented perspective.

One fact that struck me as odd is the reality that many Solution Providers are selling solutions with Intel vPro Technology, but not availing themselves of its benefits by failing to activate its features. Intel vPro is a platform comprised of several specific components: a Core 2 Duo processor, a Q-965 chipset, an Intel vPro Gigabit NIC, Active Management Technology (AMT) and Virtualization Technology (VT) which, when combined allows the Solution Provider to manage desktops and laptops even when Out of Band (powered down). For the most part, this means that as long as they are connected to a network, devices can be powered up remotely, and managed throughout the POST process – providing access to the BIOS, or even allowing re-imaging of the device across the network, in addition to other features – the perfect solution to those service calls when a PC or laptop won’t boot, or is blue-screening, allowing the ability to remotely diagnose the issue, instead of waiting to roll a truck on site to begin more costly troubleshooting.

Although vPro won’t allow us to fix hardware remotely, it adds tremendous value for software-related issues that would normally require an onsite visit. Let’s face it – it’s not that difficult to keep a base image of equipment on a network share somewhere and call it down when needed – vPro now allows us the ability to manage that process much more easily, as well as work outside of the operating system environment without physically sitting at the console. Read more about Intel vPro Technology here.

So if Solution Providers are selling and influencing purchases of vPro-enabled equipment (this typically adds $30 or so to the total cost), why aren’t they activating its features? And for MSP’s whose monitoring tools provide much greater functionality and integration with vPro technology, why aren’t they leveraging the investments they’ve already made in their Remote Monitoring and Management Platforms to increase their utilization and save on truck rolls?

Anybody?

Erick Simpson
MSP University
www.mspu.us

Microsoft Teams with Citrix, Enables new Functionality in Vista to Better Compete with VMWare for Virtualization Market

The Mercury News reports today that Microsoft will unveil a new Virtualization Strategy tomorrow to better compete with VMWare – the current Virtualization Solution market leader. The article goes on to state that Microsoft will announce its alliance with Citrix Systems and its purchase of Calista Software of San Jose, in addition to allowing for the first time the ability for consumer versions of Windows Vista to run in a virtual environment.

According to the article, Microsoft stated that its alliance with Citrix includes a co-marketing agreement, and it will use Calista’s software to speed up the performance of applications running in a virtualized environment.

VMWare of Palo Alto California had the best performing Silicon Valley IPO last year, and is majority owned by EMC. See the entire article here.

This article continues to reinforce the importance and impact that Virtualization and Software as a Service will have as organizations continue to seek out new ways to cut operating costs. For two excellent resources on SaaS and upcoming IT and MSP Trends, visit Jeff Kaplan’s site www.thinkstrategies.com, and Joe Pannettieri’s www.mspmentor.net.

Erick Simpson
MSP University
www.mspu.us 

Want to know how much it will cost Solution Providers to enroll in Dell's Managed Services Program - in order to compete against Dell itself?

Want to know how much it will cost Solution Providers to enroll in Dell's Managed Services Program - in order to compete against Dell itself?

In a new article on eWEEK’s Channel Insider, Jessica Davis writes about her recent interview with former Silverback CEO Dan Phillips, who is now Dell’s channel MSP chief, whatever that means. Mr. Phillips enlightens Jessica to the following:

·         Dell is looking for quality partners in the hundreds, not thousands

·         Silverback had 150 partners before acquisition by Dell, who will be automatically enrolled in the Dell partner program

·         New Dell Managed Services Partners must go through Dell online product training for certification to sell Dell products – Mr. Phillips remarks that “it’s a simple online exam”

·         Dell online product course completion focuses on areas such as Microsoft, Cisco, 3Com, networking and security

·         New MSP’s must pay $8,999 to finish Dell’s Business Builder program, which includes technical training a handful of licenses and sales and marketing assistance, as well as completing the online product training and passing the aforementioned online exam

·         Existing MSP’s must complete a Dell Managed Services audit program, ensuring that the partner has the capability to deliver Managed Services at a certain level to be deemed a Dell Certified Partner – this costs the MSP $4,999

·         Existing Silverback Partners who have completed Silverback training don’t have to do these things

·         Recertification may be required on an ad-hoc basis, and based on the judgments of Dell’s dedicated sales organization for this program

·         Dell will be announcing plans for their direct Managed Services offering to end-user clients shortly, along with other significant announcements through next year

See the entire article here.

I don’t know about you, but I would never trust a technician in our organization to scope, spec, implement, deliver and maintain any end-client solutions after simply taking some online trainings and passing an online exam – come on, is this what Dell believes creates Trusted Advisors? Consultants that are able to build lasting relationships with clients, identify business needs and pain points, and create technology roadmaps to help them improve efficiencies, reduce costs and mitigate their business pains and risk?

Dell’s approach certainly seems one-dimensional from an MSP training perspective. In our experience training MSPs all over the world, we know that there needs to be a multi-faceted training and support structure in order to give Partners the best chance at success. These areas are:

·         Education

·         Training

·         Ongoing Support

See my previous blog on this concept here.

What about the price of admission to get partnered up with Dell, for the privilege to compete directly with them in the future for end-client business (take a look at Dell’s full page advertisement marketing remote technical support to end-clients here). I’d love to know what kind of training $8,999 will buy, and more importantly, who these Solution Providers are that will pay it (for my own selfish reasons!). And what qualifies an MSP for the $4,000 discount.

I wonder just what does that “audit” entail? Even if a Partner does receive an MSP MBA for nine grand – they’ll still be competing with Dell!

The whole thing just doesn’t make sense to me, so I must obviously be missing something….something big. How do existing Silverback Partners get a pass? Did Silverback put their Partners through Dell online product and certification training, and Microsoft, Cisco, 3Com, networking and security training as well?

Questions, questions….

How about the “recertification” possibility? The Dell sales team will be evaluating Partners and deciding who needs to get recycled through the challenging online training and testing regimen (better make friends with those folks fast) and I wonder if that means paying more fees for the sheer excitement of going through boot camp again?

It’s going to be interesting watching how this all unfolds, especially with Mr. Phillips’ cryptic statement that we will be seeing some significant announcements from Dell through next year.

I don’t know about you, but I just can’t wait…

Erick Simpson
www.mspu.us

Ingram Micro Inaugural Seismic Partner Conference Keynote

I had the honor of delivering the Keynote address at Ingram Micro’s Inaugural Seismic Partner Conference in Dallas, TX yesterday.

For a complete copy of my Keynote Address and PowerPoint, click here.

The conference had 135 Ingram Partners registered, and was supported by Vendors such as Intel, Level Platforms, VaultLogix, Autotask and MX Logic. Also conducting presentations were Ingram Seismic Partners, and covering the event was Pedro Pereira, editor of eWEEK Strategic Partner and columnist for eWEEK Channel Insider. For Pedro’s initial article on the event, click here.

I am very impressed with Ingram’s Seismic offerings engineered to help their Partners in the Managed Services model. In addition to training and other offers, Ingram provides services its Partners can use to become more efficient and effective from an operational perspective, as well as many they can resell as Annuity-Based offerings to their clients such as:

·         Remote Monitoring and Management

·         Email and Web Defense

·         Network Operations Center

·         Help Desk

·         Print Monitoring and Management

·         Online Backup and Restore

·         Professional Services Automation

I must say that I was extremely impressed with the makeup of the Partners in attendance. These Partners were there to learn and apply what they learned from the Speakers and Presenters, including Justin Crotty, Vice President, Services Sales, from Ingram Micro. I am very pleased to see how far these Partners, Vendors and Distributors have come in just the last 12 months in the field of Managed Services. We are really starting to stretch our collective legs in this arena, and I mentioned in my Keynote that these were the types of alliances and resources we sorely needed in 2005, when we were trying to figure Managed Services out all by ourselves, through trial and error. We certainly would have been much more successful a great deal sooner had we had these types of resources to leverage.

My Keynote focused on my perceptions of large retailers such as Dell competing directly with Solution Providers for end-client business, and what we can do about it, the effect our current economic situation will have on Solution Providers, and Managed Services Providers in particular, and my recommendations to help Managed Services Providers increase their revenues in 2008. Here are the key takeaways:

2008 will be a good year for Managed Services Providers.

·         Don’t eat your pig all at once – go one leg at a time (you’ll need to be familiar with my 3-legged pig joke to get this)

·         Build deep client relationships as your clients’ Trusted Advisor and outsourced CIO to ward off competitive threats

·         Become Managed Services Ninjas and leverage our competitor’s marketing against them, proving our value over theirs to prospects

·         Leverage our Vendor and Distributors’ services and support offerings, as well as other benefits such as facilities tours and product and solution demos and Marketing Development Funds

·         Expand your annuity-based Service Offerings to your Clients

·         Weight your deliverables close to 60% Services and 40% Hardware and Software

·         If your client base averages less than 26 users, move up to the 26-100 user space

·         Modify your Managed Services Agreements to extend their terms, and allow you to modify their value during the term

·         Add financing as an option to each and every Proposal

·         Take advantage of this event to strengthen your relationship with Ingram Micro – accelerate the opportunity for a win-win relationship

For a complete copy of my Keynote Address and PowerPoint, click here. I request that you download it, as the takeaways will be much more meaningful in their intended context.

Erick Simpson
www.mspu.us 

How much market share can Dell afford to keep losing?

How much market share can Dell afford to keep losing?

ChannelWeb reports today that HP continues to lengthen its lead over Dell in the worldwide PC space. With shipments of 13.7 million PC’s in Q307, HP increased its PC’s shipped by a whopping 32.7 percent over the same period the year prior.

Research firm iSupply said Thursday that Hewlett-Packard (NYSE:HPQ) Co., which recently surpassed the $100 billion market in annual sales, continued to build its lead over Dell (NSDQ:Dell) in the worldwide PC space.

The El Segundo, Calif.-based firm said that HP shipped 13.1 million PCs in the third quarter of 2007, a staggering 32.7 percent increase from the 9.9 million PC units it shipped during the same period a year earlier. But Dell still lagged and much of the industry's growth has passed it by, iSupply said in a statement.

According to ChannelWeb’s source for the article, iSuppli, Dell underperformed the market for the same period by shipping 9.9 million PC’s, a meager growth of 1.5% over the same period the prior year, dropping in market share to 14.6 percent from 16.3 percent a year ago. iSupply posits that Dell’s lackluster growth is due to the delay in execution of their channel expansion plans, and notes that Dell’s growth is the weakest among the top 5 PC OEMs during this period.

"Dell underperformed the market with meager growth of 1.5 percent. Dell shipped 9.9 million PCs worldwide in the third quarter of 2007, compared to 9.8 million during the same period in 2006," the firm said. "(Dell) market share fell to 14.6 percent in the third quarter, down from 16.3 percent a year earlier. Dell posted the weakest growth among the Top-5 PC OEMs during the third quarter."

iSupply analyst Matthew Wilkins attributed Dell's sluggishness largely to the fact that its channel expansion plans have yet to take off.

See the entire article here.

Meanwhile, in a separate article on ChannelWeb, Dell CFO released a statement that reinforces Dell’s commitment to a growth strategy that includes acquisitions. Dell has made recent strategic acquisitions of MSP Tool Silverback Technologies, ASAP Software, Equalogic and has most recently announced the acquisition of Everdream Corp., a Software as a Service provider. These purchases foreshadow Dell’s restructuring to add more services to its deliverables. The debate among service providers has centered around Dell’s plans to include or exclude its Partners in their new service delivery model.

See the entire article here.

Recent opinion in the industry has reflected negatively upon Dell as a result of directly marketing to end-user customers for their remote help desk services, along with their new offering which bundles desktops, servers, networking and service – but will only sell it directly to end-user customers as well, again shutting out their partner channel. See my blog on this announcement here.

It remains to be seen how long it will take Dell to regain its positioning among the top OEMs, and how much more restructuring and acquisition they will continue to execute – not to mention how much of their Partner base will jump ship to other OEMs such as HP in the interim. Many of MSPU’s Members have done exactly that in the current quarter, looking for a better Vendor relationship and feeling of security and support. What about you?

Erick Simpson
www.mspu.us 

Speaking of Invasions...or The Invasion Has Begun Part 2!

Well, Partners - it appears we not only need to be mindful of Dell infiltrating our Client base - we have now been notified that Microsoft will be following suit!

See this news release: http://www.microsoft.com/presspass/press/2007/nov07/11-14MSComcastPR.mspx. Here's an excerpt:

Comcast and Microsoft Launch Microsoft Communication Services From Comcast for Small and Medium-Sized Businesses

New offering provides SMBs with hosted corporate-grade e-mail, scheduling and document-sharing services backed by 24x7 support.

PHILADELPHIA, and REDMOND, Wash. — Nov. 14, 2007 — Comcast Corp. (Nasdaq: CMCSK, CMCSA), the nation’s leading provider of cable, entertainment and communications products and services, and Microsoft Corp. (Nasdaq: MSFT), the worldwide leader in software, services and solutions, have launched a new Internet-based communications product for small and medium-sized businesses (SMBs), giving SMBs access to services that have traditionally only been available to larger companies with IT staffs. Comcast’s SMB customers will be the first in the country to receive Microsoft Communication Services from Comcast, which will provide them with corporate-class e-mail, calendaring and document sharing. This product is Internet-based, so SMBs do not need additional server capacity, and is backed by 24x7 Business Class customer support from Comcast, which will serve as an SMB’s “help desk.”

Apparently Microsoft feels that small businesses need the assistance of Comcast to provide technical services to them - I guess we're just not getting the job done. Shame on us as Solution Providers who are shirking our duties to provide consultative IT services to needy Clients, underutilizing our years of training, certifications, experience and Vendor relationships!

It's obvious that our Clients need a better answer - a Cable TV service provider that can leverage their years of Cable TV Programming experience to deliver business-class IT services to the Clients we have so willfully wronged and abandoned.

I really hate it when our perceived Manufacturer/Vendor Partners force me to re-think my positions and eat my words....see this post: http://mspu.typepad.com/weblog/2007/10/should-msps-fea.html. Here is an excerpt:

So I always tell our Partners that are worried about the 800lb gorillas stealing their clients that the key to keeping them is their relationships with their clients. I'm confident that Microsoft, Dell, Ingram, Best Buy, Staples, Circut City, etc. would never be able to replace our relationship with our clients.

As Karl writes so effectively in this post: http://smallbizthoughts.blogspot.com/2007/11/selling-technology-vs-selling-business.html, we need to transition from being Technology Consultants to becoming Business Consultants - it's the only way to stave off the invasion.

Erick Simpson
www.mspu.us

The Invasion Has Begun - Dell is Boldly Marketing Technical Support Services to End Users

I see Dell is a firm believer in the "rolling stone gathers no moss" philosophy. I was thumbing through this month's Smithsonian magazine (November 2007), and came across a full-page Dell advertisement in prime real estate - the page directly opposite the Smithsonian's table of contents.

Of course I've seen plenty of Dell ads before (who hasn't), they're all kind of like noise anymore, but this one struck me differently. After reading, and re-reading it to make sure I wasn't misinterpreting it, I've concluded that this is a salvo aimed directly at our clients to deliver the very remote technical support that our Managed Services philosophies are based on.

The Invasion Has Begun...

Erick Simpson
www.mspu.us