What are Managed Services, and Why Should You Care?

(Originally published in Small Business Computing, September 25, 2009)

Technology insiders tend to throw around technical terms and business jargon, assuming people outside the industry understand what it all means. By its nature, technology vocabulary is often confusing and complicated, and insiders often add to the confusion by over-complicating things. To help add a sense of clarity to the confusion, each month, Laurie McCabe, a partner at Hurwitz & Associates (a business consulting firm), will pick a technology term, explain what it means in plain English, and then discuss why it may be important to you. This month, Laurie takes a look at managed services.

What are Managed Services?

Managed services let you offload specific IT operations to a service provider, known in tech parlance as a Managed Services Provider. The managed service provider assumes ongoing responsibility for monitoring, managing and/or problem resolution for selected IT systems and functions on your behalf.

Managed services providers can offer services such as alerts, security, patch management, data backup and recovery for different client devices: desktops, notebooks, servers, storage systems, networks and applications. Offloading routine infrastructure management to an experienced managed services professional lets you concentrate on running your business, with fewer interruptions due to IT issues.

Managed services providers usually price their services on a subscription basis. Depending on the services they provide, pricing is usually based on the number of devices, with different packages priced at different levels. Some provide customer support onsite when required. Basic services often start with a monitoring service, which notifies you of problems, which you resolve on your own. At the upper end of the spectrum, service providers offer fully managed services that cover everything from alerts through problem resolution.

Typically they perform an initial assessment of your current IT environment and management requirements to help you decide what services and service levels you need.

Why Should You Care?

Just like larger companies, small businesses need technology to operate efficiently and to compete effectively. But as reliance on IT grows, the resources to support an increasingly complex IT environment may not. In many small businesses, IT resources are scarce, and can be quickly overwhelmed with the day-to-day responsibilities of keeping the IT infrastructure that the business depends on up and running.

If you fall behind in keeping up with things such as backups, patches and security, the odds are that you’ll face an IT outage or another problem down the road that will negatively impact your business. For instance, if your e-mail server, customer relationship management system, financial application or network goes down unexpectedly, you face substantial productivity and revenue losses as a result.

MSPs act as an extension of your IT department, taking care of routine IT infrastructure monitoring and management around the clock—freeing up your IT staff to focus on higher-value projects. By proactively monitoring and maintaining your systems, an MSP can help you avoid many technology problems in the first place. Should an issue occur, an experienced MSP can troubleshoot and resolve it more efficiently.

Unlike traditional outsourcing situations, where you surrender complete control of your IT assets, you decide what you want the service provider to take care of, and what you want to handle. You retain full visibility into the process and management of your systems. In addition, the MSP subscription model gives you more expense predictability than a consultant-type time and billing model.

What to Consider

MSPs offer a wide range of different services. Many focus on managing specific areas and functions, such as storage and related management services, or desktop management and help desk services. Some provide management services for server hardware, operating systems and middleware, but limited support for applications such as e-mail. Many provide onsite services as required, but may have limited regional or local coverage areas.

If you are looking for more comprehensive services, including alerts, monitoring and management services for a wide range of client, network, servers and applications, Dell offers ProManage-Managed Services for SMBs. The service offers small businesses a choice of service levels, priced on a per-device, per-month basis. Most services are provided remotely, but Dell and its channel partners supply onsite service when required.

With so many different types of MSPs and offerings, the MSP label can be a confusing one. So, when considering managed services, think first about your requirements. How satisfied you are with the level and quality of support that you have today? Where are the gaps, pain points and inefficiencies in IT infrastructure management? How do downtime, outages and other problems impact your business?

With these requirements top of mind, evaluate MSPs that map to your IT, business and budget requirements and provide a flexible, proactive approach that can adapt with you as your needs evolve.

Prescription for Subscription Fatigue? Time for New SaaS Pricing Models

As an analyst that’s covered the software-as-service (SaaS) market since 1999, I am briefed by vendors introducing new subscription services into the market on a regular basis. Many of these solutions provide small businesses with real solutions to real problems—whether helping you market your business, keep your books, manage projects or pay your bills (just to mention few). In many ways, SaaS or “cloud” pay-as-you-go subscription pricing model is ideal for small businesses. It eliminates the barrier of big upfront capital investments, and reduces financing requirements, freeing up capital for other needs. The SaaS provider takes on the burden of IT support and maintenance, enabling the small business to focus more resources and attention on the business.

And there’s no doubt that the SaaS model provides tremendous economies–which vendors can pass on to customers. Multi-tenant architecture enables vendors to service customers much more efficiently, and Web-centered marketing makes it much more affordable for companies to effectively reach prospective customers with their offerings. All else being equal, its highly likely that a SaaS solution will be easier for a small business to digest—both financially and technically—than a packaged software offering.

But, I have to wonder, how will subscription fatigue affect adoption of software-as-a-service (SaaS) or cloud computing solutions in the small business market? While the threshold for purchasing an individual solution may be quite reasonable, when you start adding more services, how many of these monthly subscription fees can the average small business afford? And how many different service provider contracts does a small business want to manage and monitor?

From a consumer standpoint, just stop and tally up what you spend every month on mobile and land lines, cable TV, Internet connectivity, and other services from Netflix to satellite radio to online gaming–not to mention traditional media subscriptions. For a family, it can quickly creep up to enough to feed a family of six in a third world country.

In the SaaS world, these monthly fees can add up even more quickly for a small business, who may be purchasing a service for $10, $25, or $60 per user per month, for several users. At a certain point, individuals and decision makers in small businesses balk at forking out for another subscription. Unless the service just whacks you over the side of the head with its value, many businesses will decide to just continue to do without. As they tally up monthly fees, they may also determine that some services haven’t really provided enough value—and are, in fact, dispensable.

All of which points to the fact that, for the most part, the small business SaaS per user, per month pricing model hasn’t changed in the past 10 years! Oh sure, there are ad supported free services, and a few vendors, such as Zoho, that give companies a couple of free seats before fees kick in. But for the most part, the per user, per month model reigns, no matter how much or how little individual users actually use the solution, or the value that they get out of it.

SaaS vendors targeting small businesses need to start experimenting with some different options if they want to create a true volume market for their solutions. How about trying pricing models that would allow for concurrent use, instead of specific named users?  Or unlimited use for businesses of different sizes? Or (and I’m sure that this will send shudders down some vendors’ spines) pricing based in part on measuring the effectiveness of the solution, in terms of time or cost savings, or increased web site traffic, or some other relevant variable? SaaS has been a huge leap forward in how software is delivered, it’s time for vendors to experiment with the next big leap—new pricing models.

What is a Thin Client, and Why Should You Care?

(Originally published in Small Business Computing, August 27, 2009)

Technology insiders tend to throw around technical terms and business jargon, assuming people outside the industry understand what it all means. By its nature, technology vocabulary is often confusing and complicated, and insiders often add to the confusion by over-complicating things. To help add a sense of clarity to the confusion, each month, Laurie McCabe, a partner at Hurwitz & Associates (a business consulting firm), will pick a technology term, explain what it means in plain English, and then discuss why it may be important to you. This month, Laurie takes a look at thin clients.

What Is a Thin Client?

A thin client is a computing device that’s connected to a network. Unlike a typical PC or “fat client,” that has the memory, storage and computing power to run applications and perform computing tasks on its own, a thin client functions as a virtual desktop, using the computing power residing on networked servers.

They typically have just enough processing power, information and parts to access and use the computing resources of a server. The thin client can’t run applications or store data or documents on its own; it functions as an interface to convey your keystrokes and connect to the applications, documents, data and storage on networked servers, where the actual work is done.

Most thin clients run Web browsers and/or remote desktop software, such as Microsoft Terminal Services or Citrix XenApp, so you see the familiar browser or desktop environment that you’re used to.

With thin clients, you run the desktop environment on the server, and remotely display the desktop screens on the thin clients. You need to manage this on the server side with what’s called a virtual desktop infrastructure (VDI) — software that creates the desktop images, stores them on servers and sends them over the network to the thin clients. Both desktop and mobile thin clients are available from a wide range of manufacturers. Some such as Wyse, specialize in thin clients, while others, such as Dell and HP provide thin clients as part of a larger client device portfolio.

Why Should You Care?

Because they lack hard drives, CD-ROM drives, fans and other moving parts, thin clients are smaller, cheaper and simpler for manufacturers to build than traditional PCs or notebooks—and cheaper for you to buy.

Thin clients decrease client maintenance costs and hassles. With fewer moving parts, and very little software running on the device, fewer things can go wrong with a thin client, so they’re easier to maintain and fix. If a thin client does fail, you can easily swap in a replacement without losing productivity because employees don’t store any data on their client device.

Since everything is managed, stored and secured centrally, from the data center, thin clients eliminate the issues of installing, updating and patching applications, backing up files, or scanning for viruses on individual computers. Because employees see and have access only to what they need to do their job, thin clients are easier for non-technical people to use.

Centralized management also provides security benefits. You’re not storing any data or information on the thin client, so you don’t need to worry about exposing confidential data if a thin client gets lost or stolen. In industries such as healthcare, where adherence to privacy regulations is of paramount importance, thin clients can give medical personnel access to patient records without concerns about confidential information being downloaded. Thin clients also use less energy than standard desktops and notebooks.

Because they run cooler, they can help reduce air conditioning requirements as well.

What to Consider

Companies have traditionally turned to thin clients to give employees access to certain applications and functions, such as in a call center or retail setting via remote desktop software. Thin clients are also a good fit for remote offices, where it can be difficult and time consuming to get PCs fixed. However, as cloud computing becomes more prevalent, the use of thin clients has the potential to expand significantly, as they can also provide a gateway to an almost limitless number of Web-based applications.

However, thin clients aren’t right for all situations. Thin clients must be connected to the network at all times. Performance for graphically intensive applications can be slow, since people access them over the network instead of on their own device. People may also balk at giving up desktop applications and control over their workspace. And, companies need to also factor backend infrastructure and remote desktop licensing costs into the equation to determine whether thin clients are the right fit for their needs.