Premium Services Without Premium Overhead Equals Increased Revenues

In today's critical business environment, change is the only constant. Businesses have learned to cope with change by concentrating upon their core competencies and outsourcing those activities that are not core to the business. This allows business to remain light and able to quickly adjust to the then current needs. In the beginning of executing this outsourcing philosophy, Information Technology was viewed as not strategic to business. With this view, in some companies all of IT was outsourced to companies in the business of outsourcing large operations. With the application of the Internet and virtually unlimited bandwidth to business processes, it soon became apparent that indeed information availability is a core competency in a large number of businesses regardless of size. The small London bakery whose business is dependent upon selling pastries to Japanese businessmen to be used as business gifts while they are in London survives on information availability. The large brokerage firm survives and competes on its ability to trade online. Information availability through network management is a needed skill set. Control of the network infrastructure is a core competency in large businesses that thrive and survive using the Internet.

Organizations of all sizes require exceptional network management to survive especially given the need for 24X365 uptime driven by the Internet. Small to midsize companies seldom have the needed skilled technical resources in-house to approach 24/365 coverage. While this should be an internal skill set, with small to medium sized business it must be outsource. Small to midsize businesses are turning to service companies that are participating in a newly evolving concept: the Management Service Provider (MSP). According to Stephen Elliot, a former Gartner Group analyst credited with coining the term Management Service Provider

Information and its timely access are corporate assets. "If systems and Web sites are not available, companies are not doing business," according to Caryn Gillooly, a senior analyst with the Hurwitz Group. "If the information resources are not available too often, customers go elsewhere. Management of the network infrastructure and its critical components has become a business critical necessity." Dial tone expectations or in the vernacular of Scott McNealy, CEO of Sun Microsystems, "Web Tone", is the requirement that governs network management services. To meet these requirements, small to mid-sized companies are buying network infrastructure management as a service, rather than purchasing enterprise frameworks, or developing management systems in-house.

In the past, network, systems, and storage management were viewed as black boxes that companies knew they needed but did not understand the real business implications. Now that information availability is a corporate asset, companies understand the impact of downtime on their business bottom line. Management of network infrastructure is not a question of if but when and how much. The answer seems to be a lot and soon. According to IDC, MSP revenue will grow from 90 million in 2000 to 500 million in 2004. According to Elliot, the growth will be steeper at a rate of 133% annually reaching 4 billion dollars in 2005.

Management Service Provider capabilities differ considerably. Most monitor the applications or systems for problems, informing the customer company, which then does the troubleshooting and correction with its own resources. Few of today's MSPs actually fix the problems they uncover. According to Hurwitz's Gillooly, MSPs are therefore missing a key component. If customers have neither the time nor the money to monitor their business critical network infrastructure, they might not have the means to find and fix the problems. MSPs need to move to shore up this gap and customers need to demand this service level. What MSPs need to provide is a premier services offering based upon console management servers with remote and out of band functionality.

Management Service Provider (MSP) can be an entire business model but it does not have to be. Every technology firm that specializes in service and integration as business components can have a business segment that offers premier management services. These firms can then outsource the management of the network infrastructure from their clients and include storage and servers if their skill set dictates. Firms that are totally dedicated to the MSP business model do exist and are growing in number. Firms that offer other services in addition to just being an MSP may have advantages. A consulting firm that specializes in infrastructure and uptime as a practice, can add continuity to their fees by continuing to be engaged after the infrastructure has been implemented. A firm that specializes in construction and integration of SANs can add a premium service offering to their clients by managing the SAN or the entire network infrastructure. Service level agreements can be offered and honored to earn the premium fees associated with these business terms. Previously the barrier to entry into managed services was the lack of access to network infrastructure and bandwidth when the network infrastructure was not operational. Preciously resources had to be dispatched to remote sites often just to reboot a device. In addition to disasters, to maintain service levels, health checks need to be run periodically without impacting bandwidth severely. Remote access and troubleshooting is a key ingredient to offering a profitable service.

By employing the technology associated with Console Management Servers with remote and out of band capabilities, every device in the network infrastructure can be accessed through its console port from any location by either using the network if it is available or via dial technology if it is not. Every device in the network infrastructure has a serial I/O port that serves as the console to the device. Whenever a skilled technician wants to troubleshoot, administer, configure, or maintain one of the devices in the network infrastructure they want to be at the device plugged into the console port. From this posture without the aid or interference of agent software, the technician can engage the device using best of breed tools or just superior knowledge. The devices in the network infrastructure can even have their power recycled or they can be rebooted remotely. Firms that have skilled technicians can maximize the revenue received from the use of these skills without unnecessary travel or other nonproductive time.

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