Four Must-Have Managed Services: In Any Economy

I spent Thursday afternoon moderating a Webcast about the managed services industry. The discussion drove home the fact that small businesses will continue to embrace certain managed services regardless of the economy around them.

My guests included:

• Gary Pica, general manager of mindSHIFT Technologies, one of North America’s top managed service providers
• William MacLeod, CIO, Accu-Sort Systems, a mid-size business that focuses on automatic data capture solutions
• Jim Alves, executive VP, product marketing, Kaseya

Full disclosure: Kaseya sponsored the event but the Webcast did not involve any product pitches. Rather, we were exploring how small and mid-size businesses will depend on managed service providers regardless of the economy.

MacLeod conceded that his company is "rethinking everything" -- nearly all IT projects and expenses -- during the current economic turmoil. But here's the interesting part: MacLeod mentioned several managed services that his company will continue to embrace, no matter what:

1. Internal customer (i.e., end user) support: Here, MacLeod depends on a mix of outsourced help-desk and on-site services from mindSHIFT, his managed service provider.
2. Enterprise business systems maintenance and support: In other words, MacLeod is not going to cut any IT costs that could harm the reliability and scalability of his applications.
3. Data Backup/Retention: Information is the lifeblood of Accu-Sort's business. Here again, MacLeod depends on his MSP for managed services.
   
4. IT Security: Rudimentary tasks -- such as patch management and network monitoring -- can be outsourced to ensure businesses can focus on more innovative projects.

I don't want to paint managed services as a cure-all IT solution for small and mid-size businesses.

But, MacLeod's strategy at Accu-Sort reinforces the fact that progressive businesses are embracing reliable, predictable, cost-effective managed services -- regardless of the economy around them.

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Overcoming the Psychological Barriers to On-Demand Services

It is time for IT and business decision-makers to get over their fears of 'out-tasking' various aspects of their daily operations to specialized service providers.

Today's turbulent economic climate, intensifying competitive landscape and changing workplace requirements demand that organizations of all sizes re-think their business technology sourcing strategies.

What I believe is still inhibiting many IT or business decision-makers from adopting Software-as-a-Service (SaaS) and managed services are a few common misconceptions and interrelated fears.

Gain New Perspective, with Sharp Focus
For instance, too many IT and business decision-makers continue to resist a growing assortment of SaaS and managed services which can address their business application and IT management needs because they are concerned about losing control, sacrificing performance and/or dealing with additional security risks.

While all of these are legitimate concerns, THINKstrategies has found that they are not real issues when it comes to today's SaaS and managed service offerings.

Instead, most of these services have achieved better performance and higher security levels than many in-house application and IT operations. They also have achieved these service levels with lower upfront costs, quicker deployment cycles and less ongoing management requirements.

As a result, most SaaS and managed service users gain greater ROI on their IT/applications at a lower total cost of ownership (TCO), by focusing their efforts on overall business impact.

An Adaptable Coexistence Strategy
Many IT/business decision-makers also believe that SaaS and managed services are only appropriate for small organizations with limited financial resources or internal skills, and relatively simple functional requirements. Said another way, they think SaaS and managed services aren't sophisticated enough to address the complex needs of mid- to large-scale enterprises.

The reality is that there are a wide array of SaaS and managed service offerings which can address organizations of various sizes. Small businesses can fill voids which they couldn't afford to address with traditional applications or management products with many SaaS and managed service offerings. Mid-size and large-scale enterprises are also finding plenty of SaaS and managed services to fill unmet needs, or augment and extend the value of their existing software and systems.

The Fearless Agents of Change
Too many IT managers view SaaS and managed services as outsourcing solutions that could ultimately make them replaceable.

While this is possible, it is more likely that SaaS and managed services can help IT managers overcome the day-to-day challenges of deploying and administering software and systems, so they can refocus their time and energy on better supporting the more strategic needs of their business units and end-users.

The bottom-line is that IT managers can no longer justify doing business as usual. The sooner they put their fears of SaaS and managed services aside, the sooner they will be able to leverage these services to better serve their organizations and safeguard their positions in an uncertain world.

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Closing the Business Video Communication Gap

According to Matt Cowall at Appia Communications, if you look around the business video communication landscape today, you'll see two extremes in predominant use within the marketplace.

At one end are TelePresence and other highly sophisticated solutions. These are expensive and largely aimed at the enterprise market, but the quality of the video experience is excellent.

At the other end are PC- and Web-based solutions. These products are inexpensive, but often lack the quality and reliability that business users require.

Mid-Market Video Requirements
Somewhere in the middle, SMBs and similar organizations hope for the best of both extremes -- high video quality and reliability at an affordable price.

But a recent convergence of circumstances and next-generation technologies appears to be closing the gap in both directions, fueled by:

• The soaring costs, hassles, and inefficiencies associated with travel
• The slowing of the economy, which puts a premium on doing more with less
• The focus on reducing carbon emissions
• Internet Protocol (IP) technology, which cuts video transport costs, especially in comparison with traditional ISDN services
• New video compression codecs
• The emergence of Video as a Service (VaaS)

The Rise in Virtual Meetings

Case in point: in survey results released last month by the National Business Travel Association, travel buyers from over 320 U.S. companies reported a 57 percent increase in the use of videoconferencing, and 81 percent of those respondents said that the increase is due to a deliberate replacement of travel with video.

Video communication is on the rise, but how will "the middle" fully adopt and employ it? What mix of products and services will meet the demand? It will be fascinating to find out. Maybe next time, we can discuss it face to face.

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Managed Services Reality Check for Small Business Owners

Somewhere between the economic panic and the managed services craze their resides a simple truth: Now is the time for all small businesses to carefully consider their IT strategies for 2009.

I'm tired of reading wild statements that say managed services and Software as a Service (SaaS) are immune to the economic turmoil. It's far more accurate to say we've reached an inflection point of sorts, where small businesses need to review what they spent on IT in 2007 and 2008 to help their planning in 2009.

Traditionally, many small businesses acquired IT assets -- PCs, servers, networks, applications and other infrastructure that they ran internally. But those acquisitions required big lump-sum capital investments.

During the current economic turmoil, we're seeing a shift in the market. Smart small businesses increasingly depend on IT services.

Much in the same way that they pay flat monthly fees for broadband and cellular services, small businesses are embracing managed services to gain far more predictable -- and far more reliable -- IT options.

Look Back to Get Ahead
If you're a small business owner or manager, take a look at your 2008 and 2007 IT expenses. Be sure to underline purchases involving storage, security and application infrastructure.

Going forward, investigate how those big-ticket items could be shifted (partially or entirely) into the cloud.

Hundreds -- perhaps thousands -- of IT solutions providers now offer managed firewall and managed endpoint security services. And new cloud storage services -- such as Amazon's Simple Storage Service -- can bolster your own on-site storage area networks with key disaster recovery capabilities.

The trend certainly includes any applications you're seeking to license or "purchase." I am not suggesting that all on-premise applications will shift to the cloud. But before you build -- or buy -- your next business application, check to see if it already exists on the Web. Chances are, it does.

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Creative Applications for Managed Network Services

Perhaps the restaurant sector doesn't immediately come to mind when you think of creative applications of current business technology. But, that's exactly why it can provide a distinctive competitive advantage for a savvy forward-looking company.

Popeyes quick-service restaurant was founded in 1972 and has expanded to over 1000 franchised locations globally. A Popeyes franchise owner of multiple U.S. east coast locations became interested in using the latest communications technology to reduce his operational costs and streamline back-office functions at each site.

This upgrade included installing a new voice and data network that could manage secure credit card transactions. The decision was made to research a solution to update communication capabilities with a private Internet Protocol (IP) network.

A network using Multi-Protocol Label Switching (MPLS) technology was procured, replacing the cumbersome and outdated analog communication lines. Once the private voice, data, and video network was in place, the next logical step was to determine how to further gain cost advantages by leveraging this advanced infrastructure.

Built on a Solid Foundation
After carefully evaluating several telephone system solutions, the decision was made to use a hosted Voice over IP (VoIP) service from Geckotech, layered over the new backbone network. As a hosted service provider, Geckotech manages an off-premise voice solution that has built-in disaster recovery and very high reliability.

The Popeyes franchises are now able to fully realize the advantages of an outsourced VoIP phone system without having to purchase, maintain, or manage separate phone systems at each location.

All restaurant sites can easily reach each other using simple 4-digit extension dialing. They also benefit from one consolidated monthly telecom bill -- which includes unlimited local and long distance, advanced features like Auto-Attendant, eFax, Conferencing, and Unified Messaging.

Moreover, all of the outdated phone systems were replaced with one advanced VoIP solution, using Cisco Systems hardware end-to-end. As a result, Geckotech enabled the franchise owner to prepare for future business needs, based on a solid communications foundation.

The multiple locations benefit from a built-in disaster recovery plan, which reroutes all calls to a different office location should any site experience a disturbance or natural disaster. The new voice system has reduced overall operational costs by almost 40 percent at each site.

The Power of Strategic Foresight
In reality, there are few enterprises in the 21st century that are inherently low-tech. Every industry has its early-adopters of business technology that assess all the options, survey the competitive landscape, and then take decisive action.

The rewards clearly go to those business leaders who keep and open mind, and willingly embrace change –- especially when it equates to a quantum leap in progress.

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