Struggling with the Transition from Break/Fix IT Service Company to MSP? You’re Not Alone.
The industry seems to be asking VARs and IT service providers to change their business model, going from a well-established break/fix model to a managed services model nearly overnight, which can be a risky proposition.
Transitioning your organization from a break/fix to an MSP contract in a profitable way can be difficult. Customers want to save money (CAPEX & OPEX), and MSPs need to make money on each contract (OPEX).
So where are the big levers for MSPs?
The MSPs OPEX model, requires that the MSP provide a solution more efficiently, reliably, and with less overall cost than the customer can provide for themselves. So where are the big levers for MSPs?
When it comes to CAPEX and OPEX, storage is the most expensive resource for IT shops to provide for themselves. Traditional storage operations are often unreliable, inefficient, and lack performance. Moreover, they have the unpleasant habit of reaching obsolescence every three years due to normal wear and tear — not to mention the OPEX of highly-trained and skilled engineers and admins to design, architect, and maintain these infrastructures. In addition, storage performance often degrades over time as arrays fill up, causing the need to expand and grow before ROI has been realized by end-users. Further, ambiguity in the workload parameters, I/O patterns, and application response times demands, all introduce risk into the MSP pricing model for IaaS contracts.
Fortunately, today MSPs have new ways to keep all storage costs easy, straightforward, predictable, and – most importantly – repeatable for the operationally-excellent managed service provider. This makes it profitable for the MSP to take on the risk of providing easy-to-implement, fast, reliable, predictable, scalable, and cost-effective storage both in CAPEX and OPEX.
With a correctly chosen managed storage solution, you have the building blocks to migrate a break/fix oriented customer into a low-risk, profitable Managed Service customer. MSPs need a wide range of scalable storage array products highly suitable for a variety of customer use cases for plug and play and scalably hot-swap in and out, on an as-need basis. This is the new foundational approach required for the lowest TCO, profitable, and competitive Managed Service Providers of IaaS, SaaS, and DaaS products.
Ten characteristics that secure operational excellence and reduce risk for profitable Managed Services practice:
- Low Touch
- Lights-Out Operation
- Remote 7 x 24 Monitoring
- Remote Management
- Standard 5-year Hardware Warranty
- Predictable Performance
- 100% Efficiency
- Fully-scalable Architecture
- Flexible Configurations to match any workload requirement
These characteristics help MSPs confidently host customer I/O workloads without regular (and irregular) storage array care and feeding. There are new storage ops solutions designed to run unattended and without physical component replacement for the duration of the warranty period. Low-touch means with 99.9996% reliability, it’s highly unlikely an engineer needs to have physical access to perform hardware replacement of drives or other components. Thus, true lights-out operation is achieved in either a remote or customer premise data center. Self-healing drive technology allows the firmware to do many internal operations to re-manufacture failed drives in-situ. All status indicators of the health of every component, as well as performance and connectivity, is monitored remotely 7×365 with management and email logs via ActiveWatch systems. Remote administrators can now perform any function via a full featured web UI or command line, as well as the XML-like RESTful interface API.
A five-year hardware warranty, with options for a sixth, is critical to cost modeling and predictability. With consistent performance levels, overall capacity, and hot-swappable storage that delivers anywhere from 15,000 to 400,000 IOPS, MSPs can confidently satisfy a customer’s workload requirements. With hot-swappable storage that comes with unbeatable warranties on either traditional spinning disks or newer enterprise-class solid-state disks, MSPs eliminate the risk of customers “outgrowing” performance or capacity. These new storage approaches are 100% efficient – so the MSP doesn’t have to bear extra costs or pass through cost of hot-spare space to their customers, nor cover the overhead RAID5 costs to protect against data loss. These new highly-scalable storage arrays allow you to make multiple configurations on all Hard Disk Drive (HDD) or all Solid State Drive (SSD), or a hybrid mix. Configurations can range from 7TB to 28TB of usable space after all overhead and RAID protection is applied at no additional cost. Properly engineered arrays are specified, designed and engineered to deliver on the promise of low-touch, highest efficiency, and maximum performance.
For example, consider an MSP end-customer looking at a “make vs. buy” scenario of an enterprise-class storage array and the skilled engineering to provide the design, implementation, care and feeding for five years.
The “make vs. buy” formula takes many factors into consideration.
Factors that may influence a organization’s decision:
- Lack of in-house expertise
- Smaller or larger than usual volume requirements
- Desire for multiple sourcing
- IT operations may not be critical to its business strategy
Many companies want to offload the operational minutia of IT to a Managed Service Provider, if it makes sense to the business to do so and the costs can be predictable and controlled.
Consider the costs of customers making an enterprise-class SAN solution for 28TB of usable, higher than average performance, resilient, low-latency storage and operational excellence:
Now, consider the cost modeling that makes sense for the MSP to acquire the hardware and talent using X-IO Technologies Intelligent Storage Element (ISE), acting as a fully certified value added reseller partner for X-IO Technologies:
Notice the dramatic cost containment achieved by the MSP using superior storage hardware such as X-IO Technologies Intelligent Storage Element (ISE), designed specifically to dovetail with the MSP value proposition of profitability.
To get rock-solid resilience, performance, and profitability, MSPs must partner with present-day storage solutions. If not, one pillar will fail, consuming valuable time and economic profits from monthly recurring revenue and puts customers’ data at risk. In other words, traditional large company SAN solutions put MSPs at risk due to hidden hardware and software costs, high maintenance costs, licensing schemes, and up front professional service fees.
MSPs can eliminate risk and increase profitability by partnering with X-IO Technologies award-winning, best-of-breed storage solutions.