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Why It Makes Sense for Telco Providers to Add Managed IT Services (Now)
By Raymond Vrabel
It seems like a simple question for an IT provider specializing in telco services. “Do you offer managed IT services — why or why not?" It sounds simple, right? Well, not exactly, since it really is more than just a “Yes" or “No" response. As someone who is focused on mainly the telephony space, this situation has undoubtedly come up in conversation with your staff, industry vendors and distributors and, of course, with your SMB customers.
While we can’t get inside the inner workings of each provider’s mind as to why they currently do (or don’t) offer a managed IT services model, here’s a breakdown of the types of providers that currently exist and why it makes sense for each of them to add managed IT services to their respective business models. Which category best describes you and your current thoughts on this offering? Also, more importantly, let’s understand more about why managed services is something that IT providers should be considering. It’s more attainable than you might think!
1. Break/Fix/Reactive Approach. This category doesn’t need much of an explanation as it is basically the polar opposite of a managed IT services model. In this particular case, I am referring to those who likely consider themselves VARs and/or resellers and are mainly focusing their business on selling phones, phone systems and other business products such as printers/copiers, etc. Of course, they are dedicated to their customers the same way an MSP would be except their concentration is on the hardware aspect, rather than looking to explore additional options and business operations services. They haven’t really looked at a managed services model. Or rather, they have thought about it, but haven’t found the right vendor and processes to help them make the switch.
- Advice and Analysis: The cloud is coming, and now more than ever, technology is continually being built into traditional hardware devices and being further consolidated. Look at the advent of the virtual server and BYOD. If you aren’t already beginning to explore additional options, now is the time to start the process. Work with your vendor and distributor partners as they can help with this. It’s not as much of a daunting process as it might seem.
2. Progressive IT Solution Providers. Someone who falls into this category has likely begun to refer to themselves as a solution provider. While they may not be completely sold on managed services, they are beginning to look at its benefits and are leaning toward a cloud model for their services offerings. They see the telco industry is becoming more commoditized and they want to know how to further capitalize on this. They are also likely to see that the margins for pure hardware sales are declining, and they are making less money, so they see managed services as a more attractive model and are driven by this.
- Advice and Analysis: Progressives will be on the winning team when it comes to managed services because they are doing their homework. They know the cloud is coming and that BYOD is taking over IT departments within both the large and SMB spaces. Progressives are looking to grow their businesses 40-60 percent within the coming years. They see the margins, and they recognize and understand that in order to increase profits, they need to offer the whole package, not just phones or printers.
3. The Transformational IT Solution Provider: Those in this group are already ahead of the curve when it comes to managed services. They want to refer to themselves as an “MSP." Their thought process now is, “When and how?" rather than “Should we?" They are well-primed for a transition to a managed services model, but need a little bit of assistance when it comes to making the move. So, if you fall into this category, you probably are thinking, “Ok, so now what do I do?"
- Advice and Analysis: The first step in making this move is ensuring that you are picking the right vendor, are choosing someone who’s aligned with your business goals and is willing to make the investment with you. Make sure they understand what stage you are at and how they can help when it comes to moving to a managed services model. This includes assisting your techs on how they will work with your SMB customers when it comes to managed services.
Despite what category you fall into, it’s important to move forward with (or begin to look at) an IT managed services model. This entire market is converging, and more and more, I am seeing instances of MSPs now adding managed print services, and telco providers offering managed networking services. This also goes for IT providers who specialize in office products. With the profit margins on consumables, such as cartridges, toner, ink and paper currently dipping, managed services can provide additional revenue streams, making the incentive even higher to make the switch.
Remember, your competition is likely having the same thoughts you are, so if you don’t make the move soon, they might get there before you do!
Raymond Vrabel is Continuum's director of technical cccount management and participates in product and service growth initiatives. He also manages Continuum's Technical Account Management team which supports more than 3,300 partners worldwide. Vrabel has more than 15 years of experience in the IT industry, specializing in managed services, disaster recovery and cloud solutions.