Business Services Tag

Should Big MSPs Continue to Partner?

In a previous post, I talk about how the added efficiency from the scale of a traditional NOC service, with its shared service model, decreases as an MSP grows, and in fact the lack of process and tool flexibility can actually impede a mature MSP’s growth. This naturally leads to the question, should a large mature MSP still partner and if so why? I believe the answer is absolutely yes, but the partner selection needs to focus on different criteria.

  • Dedicated Resources – Once an MSP has enough internal scale, the additional efficiency contributed from the scale of a shared NOC is very small. At this point, the MSP is better served by finding a partner that can offer a dedicated team that benefits from a shared facility, infrastructure and management and that is located in an economically advantaged geography. This arrangement provides the MSP with the consistency that comes from always working with the same individuals, but with little facility and HR overhead. Additionally, the members of the team assigned to a given MSP will become very familiar with that MSP’s customers and will deliver better service over time. Operating within a shared facility and infrastructure, the MSP will still benefit from shared cost on those items that will not effect day-to-day service. Finally, an economically advantaged geography provides highly trained resources at a fraction of the cost that is available locally.
  • Process & Tool Flexibility – When a VAR first embraces services and becomes an MSP, they will typically be weak on processes, but as they mature, they develop a deep understanding of what works for their customers and they may even acquire some large customers that have their own process requirements. At this point, the MSP needs a partner that allows the MSP to specify the process and tool selection and to perhaps set specific processes by customer.
  • Flexible Resource Pool – Having a dedicated team is great for consistency and building specific knowledge to support your practice areas. However, there are times when a skill set is required either on a one time case or a periodic frequency that does not justify a full time resource within you team. To meet these requirements, an MSP needs to identify a partner that has a pool of specialized talent that can be drawn upon to meet a specific need or simply augment the staff to meet a temporary workload increase.

By following these considerations, the large MSP will still benefit from improved service quality and reduced service delivery cost while still focusing their internal resources on high-value projects and closing new business.

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10 Tips for Cloud Partner Selection

Cloud computing is evolving rapidly with new options and providers and services appearing on the scene daily. Many are also disappearing. VARs and MSPs choosing to leverage a cloud provider to deliver a service to your customer, you need a consistent process and criteria to select the right cloud provider and evaluate them going forward.

Here are a few things to consider as you create your selection criteria:

Reputation: Look into the provider’s history, who are their customers? What problems have they had in the past and most importantly, how do they react when they have a problem? Do they list a number of  testimonials on their site? If so, perhaps you can actually interview one of those clients without a formal introduction from the provider.

Longevity: The industry is experiencing a major consolidation. OpSource, NaviSite and TerraMark were all recently acquired. Additionally, business models are rapidly changing. None of this is necessarily a bad thing and could even be a good thing for you and your customers.  The point to understand is, if you build a service around this provider and sell that service to your customers will this provider’s service be available to you on an on going basis. Be sure the provider has the staying power and the contract terms ensure you will have access to the service you need even if their business model changes.

Security: Your customers will always have questions about security. Be sure you understand the security policies and practices of the perspective service providers and make sure they meet any special requirements your customers may need. In general, the provider should be a member of the Cloud Security Alliance, be SAS70 Level II audited and ISO 27000 certified. Beyond that, look for specific certifications to meet the specialized needs of your customers.

Flexibility: Flexibility comes in two parts: technical/operational and contractual. On the technical side, does the provider’s environment provide you with sufficient flexibility to create and support the services you want to sell. Are they making use of the tool sets that your team understands and do they integrate with your internal systems? Contractually, you need to be sure you can consume the service as you need it and scale up and scale down as needed without financial penalties.

Pricing: Be sure to understand their pricing model and how it will effect your ability to offer a competitive service to your customers. It is also important how the perspective vendor changes the price. Consider how often and with what notice. Realize that if they can change your cost with little or no notice, you may not be able to do the same to your customers.

Data Recovery: Be sure to understand the vendor’s disaster recovery and business continuity plan. Ask how long your customers will be without their service if they vendor suffers a major disaster.

Data Export: Understand how you can export any of your customers’ data and move it to another vendor in case you decide to switch vendors or if the vendor goes out of business. Be sure to ask how long it will take to export your data and the format in which it will be provided. Understand any costs related to the data export.

Failover: Well designed cloud platforms have built-in failover. Question a perspective cloud vendor about how their system works and ask to see a demo. Be sure to understand how the provider deals with local and wide-area failures and make sure their capabilities meet the needs of your customers.

Green Tech: Everyone in interested to  know how their business impacts the environment.  You should know that just because your perspective vendor is a cloud provider does not mean they are green. Ask the vendor if they are a member of The Green Grid. Find out about their energy planning process and find out if they participate in a carbon offset program. This is all good to understand so you can answer questions from your customers and use the information in your marketing.

Test it: Create a test with some internal resources. See how the service works. Was the implementation as easy as advertised? Test the vendor’s support and service organizations. Once you are satisfied with the results, then begin moving customers onto the new service.  Proceed slowly, moving a small number of customers and ensuring everything is working before moving more. This will give your new vendor an opportunity to learn how to best work with you and for your team to learn how to best work with the new vendor.

Hopefully these tips will help you develop a successful relationship with a new cloud vendor and avoid potential problem vendors.

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The Importance of SLAs

In reading a post over on one of my favorite blogs, Talkin’ Cloud, I saw a discussion that caught my attention. The post itself is titled, Top 11 Questions MSPs Ask About Cloud Partner Programs, but the discussion touched on Service Level Agreements (SLA). In particular the seeming lack of importance customers give the actual SLA service provides give them.

In my experience at NetEnrich and at OpSource prior to that, our customers would spend a lot of time on the Master Service Agreement (MSA) with many conversations between their legal team and our legal team and give and take on a number of points. Naturally, these are important conversations to have, but in this negotiation process the SLA was typically given a cursory read and accepted.

As a commenter pointed out, one can argue that the ultimate SLA is customer satisfaction and a vendor with low customer satisfaction will loose their customers. While I agree with this premise, I believe customers who do not question the SLA, miss a great opportunity to get a better idea of how the service vendor will deliver on customer satisfaction. I recommend not only reading and fully understanding of a perspective vendor’s SLA to insure it meets your needs, but also to always ask the vendor a number of pointed questions about their SLA and how they operate in a number of possible incidents and then carefully gauge their responses. This is the best way for a customer to set their expectations of how the vendor will respond to incident prior to engaging. It will also help to expose areas to negotiate on the SLA along with possible areas where you may need to augment the service to maintain that ultimate SLA with your internal or external customers.

A few things to consider in an SLA:

 

  • Evaluate the promised response time based on the severity of the incident. Does this response time fit your needs, if not is there a way you can work with internal resources to deal with it?
  • Look at the teeth in the SLA. This is what happens if the vendor does not meet their commitment under the SLA. Many vendors have great standards in their SLA, but have little or no teeth in the event they fall short.
  • Understand how breaches need to be reported. Here you need to understand how long you have to report the breach and what process needs to be followed.
  • Look for  what we call the No Harm, No Foul SLA. In this SLA, if your team does not report the breach, it did not happen. In many cases this type of SLA works fine, however, if you are relying on the service to support a series customers, then this may not work as well because some of your customers may see problems you did not see and they may be too busy or frustrated to report it to you. In this setting, you may want an SLA where the vendor is required to report to you any and all breaches.
  • Lastly, be sure you can live with the performance level defined in the SLA. If you can, then you will probably be happy when your vendor out performs it.

Let us know you thoughts and please ask questions.

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