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Thursday, August 14, 2008

Managed Services Hype, Fear, Uncertainty and Doubt

Are you getting tired of being told that if you don't reinvent your business and become a managed services provider that you'll be "extinct"?

And then ground up into fossil foil?

What a load of you-know-what!

Many people in the computer consulting and more broad IT services industry are being fed a complete load of self-serving baloney by PR people, ad agencies, and disguised spokespeople (even some that I might loosely consider "colleagues")... become a Managed Services Provider or small businesses will no longer want you.

There are a few problems with that.

  1. To afford the R&D to develop your own managed services product line, that completely replaces time & materials based Small Business Virtual IT consulting, you typically need a seven-figure business to have a big enough client base to support that heavy five-figure annual R&D.

  2. Providing limited scope managed services to non-technical small business owners creates an enormous managing-expectations challenge. Hey it's not a server problem, it's a workstation problem. No buddy, it's not the workstation hardware, it's the OS. No way, no how, it ain't the OS, you gotta call your ISP. Welcome to human ping-pong ball syndrome. A really bad way to develop trust and long-term relationships with small business clients.

  3. If you resell someone else's managed services, there goes your profit margins. Remember back when you could make a few bucks selling produts?!?

  4. If everything, or just about everything you do, can be delivered without face-time, why do your small business clients need you. There are certainly lower-cost providers ready to deliver managed services facelessly in lower wage nations. (which supposes of course that non-technical small business owners would even "take the bait"... most wouldn't... relationships are everything)

  5. And you might even have to give up account control. They say one of the reasons you study history is so it doesn't repeat itself. I still remember aggressive account enroachment issues like the kind that caught CRN's attention back in 2001. Do you really think human nature and greed has changed that much among ISV's, IHV's, OEM's, ASP's, and MSP's? Watch your back!

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