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Strategy Brief | IT

The Evolution of
Managed Services
IT Must Shift from Provider to Integrator in this New
Sourcing Model

An Evolving Landscape controversial book, Does IT matter?

Global sourcing, open source, and Information Technology and the
Moores law have made technology Corrosion of Competitive Advantage,
widely available, standardized, and Carr presented a strong case that IT
If traditional IT is no longer cheaper than ever. Further Cloud, products and services are becoming
Virtualization, As-a-Service, Business increasingly commoditized and as
a strategic differentiator, such provides little opportunity for a
Platforms and new forms of delivery
IT Executives are then are changing the technology landscape. business to gain competitive advantage.
forced to gain a better Although cost and service levels are For example, he asked, How much
still important, ensuring that IT is market differentiation does email
understanding of the optimized to deliver value back to provide to an organization? His
value and source of the the business is now a top priority answer: none. In todays world, more
for leading companies. Management and more aspects of IT are being
services they provide and outsourced and while important to
expects more productivity but lower
rethink their role in the costs from their IT investment and keeping the company running are not
organization. are investigating initiatives that the source of competitive advantage.
will reduce their OpEx and enable If IT is no longer a strategic
Daryl Meske
them to focus on core competencies differentiator, IT Executives are then
Principal, WGroup
and strategic priorities. forced to gain a better understanding
The willingness to outsource IT of the services they provide, and
functions and entire IT departments undertake an accurate cost-benefit
has increased dramatically in the last analysis of why the services they offer
several years. Increasingly, organizations internally are a better value than
are becoming mature outsourcers services being offered by a managed
with second and third generation service provider that promises
contracts. Today it is estimated service excellence at a defined cost.
that 90% of the Fortune 1000
companies outsource infrastructure
and/or applications in some way.
Service Management
is the Future of IT
Meanwhile, almost ten years later All organizations depend on IT to
after first hitting the market, Nicholas be successful. If IT resources and
Carrs book still rings true. In his processes are implemented, managed
1
W Group recommends that before embarking on an initiative to make extensive use of managed
services, it is highly desirable for an organization to be well into implementation of an ITIL version
3 strategy. As part of this strategy, efficient processes should be in place for service planning, service
design and service evaluation.version 3 strategy. As part of this strategy, efficient processes should be
in place for service planning, service design and service evaluation.

and supported in the appropriate specialist partners for the delivery of Telephony, Telecommunications,
way, the business can become more component services. One option is and Web Conferencing Services
productive, more efficient, and most to partner with a Managed Service Transportation Services
importantly better able to compete in Provider (MSP). A managed service
the marketplace. To do this, IT must is an offering by an MSP for a
view itself as a provider of services to complete service solution including Managed Service
the business. The challenge for todays all infrastructure, software and Providers (MSP)
IT manager is to coordinate and work management. Managed services There are well over 500 MSPs today.
in partnership with the business to transfer day-to-day management Through specialization, advanced
define, design and deliver high-quality responsibility to the specialist remote networking tools, and
IT services at a competitive cost. organization and provide for improved pervasive use of the Internet, many
and efficient overall operations small- to middle-sized players have
The primary objective of IT Service
for the customer organization. entered this space with excellent
Management (ITSM) is to ensure that
IT services are aligned to and actively Generally, but not always, managed results. A few examples include:
support business needs. It is imperative services are delivered from outside Rackspace Provider of
that IT services underpin the business a companys internal network hosted Windows, Linux,
processes; it is also increasingly with a special emphasis placed on and Exchange Servers
important that IT acts as an agent integration and certification of Salesforce.com Provider of CRM
for change to facilitate business Internet security for applications Software as a Service (SaaS)
transformation. Using principles of and content. MSPs often serve as Kaseya Integrated IT
the ITIL, these objectives can be outsourcing agents for companies, automation framework
achieved. ITIL provides an excellent especially other service providers like Secure24.Com - Dedicated
and widely used framework for IT ISPs, that dont have the resources hosting of disaster recovery
services. It provides the necessary to constantly upgrade or maintain and ERP Systems
processes for planning and managing faster and faster computer networks.
Fortiva email archiving solution
services whether provided internally or
Managed services are not a new idea. Brixtel Managed security service
by an external service provider. It also
In fact, they have been around in
provides needed mechanisms to control The managed service space is starting
some form for more than 40 years.
costs, manage service providers, manage to become very interesting. Many of
Managed services are now available
quality, perform capacity planning, the offerings are quite specialized.
for the many areas, for example:
and resolve service-related problems. Because of such specialization
Application Services
Under an ITSM model, IT needs and focus, small and niche players
Backup and Recovery Services can often provide superior service
to develop a catalog defining the
Content and Knowledge offerings compared to internal
scope, characteristics, and costs
Management Services IT departments or larger, more-
of available services and manage
those services effectively to Desktop Services traditional IT outsourcing suppliers.
provide value to the business. Email Services In addition to the smaller players,
Help Desk Services large players such as Cisco, Microsoft,
Hosting Services and Dell have entered the market.
Managed Services Cisco Systems is aggressively pushing
IT Services
It is also clear under ITSM that it is its IP communications and WebEx
not imperative for IT organizations Network Services
capabilities, while Microsoft promotes
to provide the service with internal Security Services
the virtues of its various software
resources. In fact, increasingly IT Storage Services plus services solutions. The two are
organizations are reaching out to

2 WGroup
on a collision course in the unified The SaaS market is shifting from that IT doesnt matter. They arent
messaging and communications point solutions to a platform strategy. saying IT isnt important to their
market, meaning each will spend Software-as-a-Service (SaaS) is rapidly business, but they recognize that in
plenty on market education and evolving to emulate the software the face of escalating competition
channel sales programs. At the same industry as a whole. Although most and budget pressures, they must
time, Dell is leveraging its SilverBack people associate SaaS with Googles refocus on core competencies to
Technologies and Everdream collaboration and productivity oriented strengthen their corporate positions.
acquisitions to deliver a new set of applications and with Salesforce.coms
As a result, a growing proportion
automated, remote desktop and server customer relationship management and
of customers now believe it doesnt
management capabilities through sales automation solutions, the truth
make sense to dedicate as much
channel partners and direct support is that SaaS alternatives now exist for
staff and systems to IT management
services. Finally large IT services nearly every legacy application category.
when a third party can do it better
firms like Accenture and IBM offer
at a lower cost. Also, users have
various Managed Services offerings.
The Future of become accustomed to the ease of
use of todays on-demand consumer
Managed Services services and would like a similar set
Software as a Despite numerous analyst predictions
of online storage, security and other
Service (SaaS) and good press around the prospective
on-demand services in the office.
Software as a Service has also emerged future benefits of managed services,
as a managed service. Past concerns customers have remained reluctant
regarding SaaS reliability, security and to relinquish all or part of their IT Replacement of
compliance are fading as organizations operations to a MSP. Sometimes its
Traditional IT Outsourcing
of all sizes discover that SaaS often because the MSP is located remotely
outperforms traditional on-premises and cant establish a face-to-face Agreements
applications. SaaS vendors are also relationship to create enough trust Many organizations are also
responding to the need for increased In other cases, local VARs seeking considering using managed services
customization and integration. to add managed services to their as a replacement for traditional
portfolios have failed to understand information technology management
Now that the functional capabilities tools and mega-outsourcing
the significantly different sales and
of SaaS have been proven, customers arrangements because they provide
support requirements of the model. In
are reaping the business benefits. a more cost-effective method of
both scenarios, aspiring MSPs have
Lower upfront costs and quicker managing and protecting enterprise
pushed the managed services concept
deployment cycles produce faster networks, systems and applications
on generally uninterested customers
time-to-value and lower total cost of Managed service providers
However, times are changing.
ownership. Given todays commonplace generally offer several different price
concerns about the economy, SaaS In the past, many customers considered structures for the managed services.
has quickly becoming a preferred IT operations an essential corporate However, the most commonly used
approach. SaaS Web-based design also asset, and even a competitive weapon, structure is a per month per unit
permits better access and collaboration which they could not offload to a third fee as price per user, desktop, server,
for increasingly dispersed workers party, especially when outsourcing gigabyte, or network device.
and better communication with arrangements missed business
customers and external partners. SaaS objectives and were either restructured Remote technology is rapidly moving
archiving and tracking capabilities or terminated early. Today, a growing forward by leaps and bounds. Remote
will also help companies meet number of customers have accepted tools allow MSPs to virtually
escalating compliance requirements. the infamous words of Nicholas control companies entire network
Carr, who suggested in back in 2003 operations from off-site locations in

The Importance of Governance and Relationship Management in Outsourcing 3

low cost countries without having of our services are listed below. Please
Incident Management
to step foot onto company premises. contact WGroup for more information
This allow the MSPs monitor Anti-Virus and Spam Management on our services or to learn more about
the clients IT infrastructure and Secure Messaging/E-mail our case studies and experience.
resolve any issues that arise. Threat Assessment Monitoring Managed Services Strategy
Managed services provide small Managed Business and Business Case
business and medium sized businesses Continuity Service Planning and Governance
an option to have their IT needs taken Before embarking on an initiative to for Managed Services using
care of instead of paying an on-site make extensive use of managed services, the ITIL V3 framework
staff. It provides larger companies a it is highly desirable for an organization Requirements Definition
viable alternative to traditional IT to be well into implementation of for Managed Services
infrastructure (ITO) or Application an ITIL version 3 strategy. As part Managed Services
and Maintenance Outsourcing of this strategy, efficient processes Sourcing Assistance
(ADM). The following types of should be in place for service planning, Specialized Next Generation
services have been turned over to service design and service evaluation. Contract renegotiation and
MSPs by several large companies. Retendering services
Managed Windows and How WGroup Can Help Transition Management
UNIX Servers WGroup can help you identify the ideal Vendor Management Office design,
Managed Microsoft managed services strategy and chose and implementation services
Exchange Servers and contract with the right service Vendor Management, Transition
Managed Voice Access management provider enabling you to Management Leadership staffing
and Networking achieve such results as reduce operating
Managed Integrated Access costs, increase productivity and focus
Managed Remote Access on strategic responsibilities. Examples
Network Monitoring
Network Element Management
Network Management
Fault and Performance Management
About WGroup
Configuration Management
EDI
Founded in 1995, WGroup is a boutique management consulting that
Managed Router Service
provides Strategy, Management, and Execution Services to optimize
Managed Server Service
performance, reduce costs, and create value for Fortune 1000 companies. IT_EVMSSB_091712_006
Managed VPN / IP-VPN
Our consultants, who have years of experience, both as industry
Managed Wireless LAN (WLAN) executives and trusted advisors, help clients think through complicated
Asset Management and pressing challenges so they can drive their business forward.
Managed Videoconferencing
Managed IP-PBX and Applications For more information on WGroup, visit http://thinkwgroup.com
Web Conferencing Services
Hosted IP-PBX and Applications
Managed Voice Security Contact Us
Managed Firewall WGroup
Managed Intrusion Detection 301 Lindenwood Drive, Suite 301
Vulnerability Scanning Malvern, PA 19355
610-854-2700
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