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Managed Services Defined


Managed Services is technology maintenance and support provided for flat monthly cost, based upon metrics such as number of computers. While other industries are trying to adapt the term, Managed Services only applies to the Information Technology industry as failed usage in other sectors such as Medicine or Utilities refer only to a suite of offerings that has little to do with flattening cost or being proactive.

Managed Services developed out of legacy maintenance plans where a vendor performed regular maintenance to ensure the life of equipment and catch problems before the customer was down. While most customers understand and practice regular maintenance on their automobiles, in the previous two decades most did not understand that need for computer systems and often opted to wait unit a costly outage. For Service Providers, this customer mentality meant that  it was either feast or famine and worse yet the customer paid more when in pain.

The key customer benefits to Managed Services are as follows:

  • Strategic Plan for management understanding and cost control.
  • Proactive network monitoring on 24x7x365 basis.
  • Remote desktop and server support saving the client and provider time and cost of travel.
  • Single point of contact for all network issues.
  • Regular management review on technology issues.
  • Single supplier instead of multiple vendors.
  • Defined Service Levels for response or uptime.
  • Known costs for management & fixed price contracts.
  • Avoiding costs of building own management & reporting systems.

While many providers in the industry try to adapt, most do not have the business acumen and will not make any changes to their business model. That retail store is still trying to make margin on product, an ISP only wants to sell more bandwidth, the recruiting firm just wants to get people off the bench, and those 2-3 guys who move offices every year are just trying to do as little as possible and outsource to India.

The following are not Managed Services:

  • Lease of equipment. It’s much better to buy a server than lease for $400 per month.
  • E-mail SPAM filtering. Buy a product or go direct to the manufacturer such as paying Postini $1 per mailbox per month rather than paying a reseller $4 per mailbox per month.
  • Third-party portal. Monitoring tools and portals should be offered by the provider and not resold product or outsourced staffing.

True Managed Services offer a cost and effectiveness value proposition for maintenance and support that cannot be matched by a full-time staff or break/fix hourly charges.

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