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MSP Pricing Survey – Service Offerings Expand

MSPs are adding new service capabilities

One of the strongest trends in the managed services market, highlighted by our most recent Pricing Survey, is the increase in the number of different services (or bundled service components) now offered by Kaseya MSP customers. Our 2014 survey asked MSPs to identify which of a series of 17 services they offered. These responses were then compared to those from our 2013 survey which requested input on 11 categories of service. The results are shown in the chart below. The overall response indicates that more MSPs are offering more services. In fact, a greater proportion of MSPs are now offering all of the services we asked about in 2013. In addition, a significant number are offering the newer service capabilities we added.

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MSP Pricing Survey – Increased Hourly Rates

Worldwide Average Standard Hourly Rates Increased from 2013

The overall average standard hourly rates MSPs charge for their engineers and technicians went up by about $10 per hour between 2013 and 2014 according to the results of the last two Kaseya MSP Pricing Surveys. In our 2014 survey we asked about pricing for three tiers of technician support – level 1, level 2, and level 3 – whereas the previous survey simply asked about “average” hourly rates. However, despite various differences in the number and size of respondents between this survey and the previous one, the results were generally consistent. Rates in the United States and Australia were the highest followed by rates in Europe, Canada, New Zealand and South Africa. Hourly rates were lowest in India – see the table later in the post that highlights the differences on a regional basis.

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MSP Pricing Survey – Growth Leaders Sell Value

Strong value pricing trend

The fourth annual Kaseya MSP Customer Pricing Survey was conducted in September and October last year and it attracted almost 700 responses from MSPs around the world. One of the strongest results to come out of the survey is the significant movement towards value-based managed services pricing and away from cost-based or market-based pricing. The chart below contrasts the differences between the 2013 MSP pricing survey results and the more recent responses. the trend towards value-based pricing is clear. The results support the notion that managed services customers are increasingly interested in business value and linking their purchases to key performance indicators (KPIs), such as system availability, or performance levels, or business outcomes.

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MSP Pricing Survey – Sticky Bundles, Higher Fees

Bundling strategy increases value and stickiness

The message is clear, small and medium businesses are very interested in bundled services. A recent newsletter from AMI-Partners, I-Signal*, which reports findings from their research programs, indicates that SMBs are 3 to 4 times more interested in bundled services than in single services. They gain more value from bundled services and are loath to switch service providers unless they can do so without disrupting their existing business. The strong interest in bundled services supports the notion that SMBs are indeed more interested in value than price, despite their insistence to the contrary.

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Product Design in the IT Management Cloud Era

Product Design Image

I think many of us are more aware of the impact of product design than ever before. Recently, you may recall that the rounded edges of the iPhone 6 were widely considered newsworthy; even with mainstream television media! Apple has a long history of setting styles for product design and striking a balance between style and usability.

The advent of smart phones and tablets has resulted in millions of user-friendly apps being made available to the consumer market. As a result, there’s a lot of interest in work applications that are just as easy to use. Software for the IT management market is an area where applying modern product design principles can yield significant productivity and value for the companies using these products.

So what are the design principles that you should watch for as the next generation of IT management tools arrive? From a functional perspective, products need to help you centrally command your infrastructure, manage remote and widely distributed environments with ease, and automate everything. To deliver against these key functions, IT management products need to evolve based on the following four design principles:

Mobile First.

All aspects of the product should be designed so they can be used from a tablet or mobile phone – even if they will be used in a browser. By meeting this goal, it will be easy to deliver them within a web UI on a laptop or desktop. This is often described as Responsive Design. Basically, this means that what is available in the UI and how you interact with it will adapt to the form factor of the device you are using. If you have a laptop or tablet, you can expose more features. On a small device such as a mobile phone, navigation and other information is available, but not in your way. Another important aspect of a mobile first approach is to make sure that the apps have a native feel – so the iOS, Android and Windows apps should look and behave like they are native to the device.

Simplify everything.

You need to leverage powerful, policy driven automation, and be able to implement it simply. You don’t have the time to train your technical staff on highly complex products. Well-designed apps will take highly complex actions, but not expose this complexity to users so that they can be highly productive. For example, you should be able to quickly create policy and apply it reliably and at scale, with just a few clicks. One great way to simplify things is to be consistent in the features provided. For example, always include a Search driven approach to find things and take actions, and have it work the same way in every context.

Use pre-defined content.

Apps should deliver out-of-the-box building blocks to make simplification real. Part of the evolution towards a simpler, easier IT management solution is using content to deliver value quickly. Delivering configuration in the form of pre-packaged settings is an excellent example. Apps can include policy and profile definitions so that you don’t have to construct them before you can start using them. This applies to other app content. Apps can include prepackaged dashboard templates, agent procedures and automation scripts, profiles, and reports to deliver high productivity. Intelligent default values are probably the simplest form of content, and apps can make implementation much simpler by providing recommended choices by default.

Provide measurable impact.

You need apps that capture and present metrics demonstrating the positive impact of management apps on your business as part of the design. The whole reason for getting an IT management tool in the first place is to enable your business. It only makes sense that the app should provide the data to demonstrate value too.

By applying these principles, Kaseya is now building a new generation of IT management cloud apps that are really easy to use and maximize productivity, efficiency and quality for you. Our new Enterprise Mobile Management (EMM) app will reflect these principles in its beta release at the end of October. Kaseya customers can sign up to participate in the beta here. And this will be followed by reimagined apps for software delivery, patching, antivirus and antimalware. So stay tuned, we’ll provide you more specifics on these solutions in future blogs.

Author: Don LeClair

The Significant Value of MSP Advanced Monitoring Services

Kaseya Monitor

There’s no doubt that server virtualization has had a tremendous impact on the IT operations of many small and mid-sized businesses (SMBs). For example, the benefits* have included:

  • Reduced administrative costs
  • Improved data resiliency
  • Better application availability
  • Greater business agility, e.g. faster time to market
  • Increased disaster recovery readiness, and even
  • Higher profitability and business growth

However, a recent survey report from VMWare and Forrester** suggests that SMBs may not be achieving the ROI they originally expected from virtualization. It also points to the fact that while the majority of SMBs expect their virtualized environments to grow, they are not able to optimize their server installations and are experiencing difficulties in meeting agreed-to IT service levels.

In particular, many SMBs are challenged to optimize the use of their existing servers. A major problem is lack of skilled resources. Partly this is due to the tight budget constraints that prevail in small and mid-sized companies. Partly it’s due to the difficulty of finding and hiring personnel with the right IT skills. The result is that there is a significant opportunity for MSPs to step into the breach and help.

The Forrester report indicates that the average SMB operates a hybrid-cloud environment. About half of their workloads are virtualized and Forrester expects further virtualization to occur, including the virtualization of strategic applications. Other research suggests that a majority of SMBs are now using public cloud services as well as private cloud services, including significant up-take of software-as-as-service (SaaS) and Infrastructure-as-a-service (IaaS) offerings. Coupled with these changes operating budgets have been moving from IT to line-of-business managers over time.

Together these factors amount to a considerable set of challenges, particularly for IT in mid-sized organizations. For example:

  • In virtualized environments applications share the processing, memory, storage and bandwidth resources made available by the host server. When one application begins to hog any of these resources performance can be impacted for the other applications. To overcome this, virtualized server loads need to be rebalanced on a frequent basis e.g. monthly. As installations grow this can be time consuming and impose unbudgeted costs for IT departments with constrained resources.
  • To provide for IT service continuity during maintenance, critical applications performance, and rapid disaster recovery, many virtualized environments support the dynamic switching of applications between servers. The benefits are significant but there is also a substantial impact on visibility. In the past when each application ran on its own server, troubleshooting was comparatively easy. With dynamic switching, knowing where an application was running at the exact instant of a fault so that root cause can be determined, can be difficult to identify.
  • Managing the performance of public cloud services is also challenging. While IaaS services, such as Amazon EC2, offer management APIs, most SaaS offerings do not provide management capabilities. The best that customers can expect from many of these services is availability guarantees. However, many SaaS applications run in the same kind of virtualized environments as their on-premise counterparts, which means they can be subject to the same kind of co-resident application instance interference. Yes they are available but the performance can definitely degrade during peak usage periods.
  • One of the expectations from virtualization was that it would free IT resources to assist business counterparts make better informed technology decisions. However, judging by the results so far, this has been hard for many SMBs to achieve. IT resources have been reduced during the economic downturn. Plus there’s an expectation that virtualization and self-service private cloud capabilities should significantly improve IT productivity. Lacking resources, IT is now often placed in a position where it’s easier to decline a request than to support it. The result is that line-of-business managers may view IT as the department of “no” versus the department of “know”.

MSPs who offer advanced monitoring services and can take on the risk of providing availability (up-time)-based SLAs are in a great position to help. Firstly, they have the skilled resources that can quickly support the virtualization growth plans of SMBs and to help them optimize their server farm installations. Secondly, they have tools which enable them to track, monitor and manage critical application service levels across the entire infrastructure, including being able to keep track of applications as they migrate dynamically between different virtual machines and different servers. Thirdly, they can provide detailed reporting and analyses to aid discussions about the infrastructure investments needed to maintain SLAs and to inform business/IT decision making.

Tools such as Kaseya Traverse support proactive service-level monitoring, enabling MSPs (and enterprise customers) to get advance warning of pending issues (such as memory/storage/bandwidth constraints) so that they can remediate potential problems before they impact service levels. In addition, by tracking business services (such as supply chain applications) at the highest level, while still being able to drill-down to the appropriate server or virtual machine, Traverse allows MSPs to quickly and accurately identify route causes even in the most complex of environments. Add to that support for public cloud APIs, predictive analytics and a powerful reporting capability, and Traverse-equipped MSPs are primed to provide valuable support for today’s mid-sized companies and their hybrid-cloud environments.

By helping the IT departments of mid-sized companies meet their SLA mandates, MSPs can help free in-house IT staff to better respond to business requests, can bolster the reputation of IT within their own organizations, and can help provide the detailed intelligence needed for IT to add strong value in conversations regarding business innovation.

Learn more about how Kaseya technology can help you create advanced managed services.
Read our whitepaper, Proactive Service Level Monitoring: A Must Have for Advanced MSPs.

What tools are you using to manage your IT services?

Author: Ray Wright

References:

* The Benefits of Virtualization for Small and Medium Businesses

** Expand Your Virtual Infrastructure With Confidence And Control

Manage Data, Not Devices

security incidents

I recently read Verizon’s 2014 Data Breach Investigations Report which investigated 63,437 confirmed security incidents including 1,367 confirmed data breaches across 50 organizations in 95 countries. The public sector had the highest number of security incidents, whereas the finance industry had the highest number of confirmed data breach incidents (no surprise there!). These security incidents were mostly one of the following:

  • POS Intrusions
  • Web App Attacks
  • Physical Theft/Loss
  • Miscellaneous Errors
  • Crimeware
  • Card Skimmers
  • Cyber Espionage
  • DoS Attacks

Given your industry and the size of your company, some of these may not matter to you (until they happen to you). But there are three types of security incidents that are universally applicable, especially in this age of exploding adoption of mobile devices. They are Insider Misuse, Physical Theft/Loss and Miscellaneous Errors. It just takes a single lapse in security measures for an organization, whether public, private or government, to end up in a story like this:

Iowa State DHS Data Breach – Two workers used personal email accounts, personal online storage and personal electronic devices for work purposes

Further elaborating on the “Insider Misuse” threat, the Verizon report adds that over 70 percent of IP theft cases occur within a month of an employee announcing their resignation. Such departing employees mostly steal customer data and internal financial information. This has been made easier for these employees by permitting them to use their personal devices, which walk out with them when they leave.

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Using Marketing and IT Automation with the Cloud to build really cool marketing campaigns

IT Automation

Marketing and IT are moving closer and closer in this current era of digital marketing. The amount of IT systems a marketer has to work with has grown exponentially. This also means the job of a marketer involves more and more close collaboration with the IT department. In this blog I’d like to share a bit of my experience as marketing automation expert for Kaseya and hopefully interest more people in joining the marketing automation movement.

Marketing automation leverages IT systems for marketing efforts in a similar way as Kaseya does for IT systems management. The idea is to automate process with the goal of reducing the manual efforts required to run marketing campaigns. There are many levels at which this can be achieved and I am proud to say that here at Kaseya, we have made immense steps over the past years in achieving higher levels of marketing automation.

It seems like ages ago (but actually isn’t) that marketing methodology was to send out manually printed batches of letters. Nowadays we have completely automated our marketing efforts. A good example of this is that we at Kaseya are constantly nurturing our customer database in our Netsuite CRM system (yes there is the first bit of cloud based IT) with our marketing automation solution, Marketo (and there is another one). Some of these marketing activities involve inviting customers for online webinars (another cloud based IT solution) or promoting the fact that we have a free cloud trial of our products available. I think that an important point to make here is that we believe that the future is in the cloud-based solutions and Kaseya is leading the industry in offering IT management cloud solutions. So we are not just promoting cloud-based IT solutions, we are also implementing them.

One of the interesting things is that this digital invasion into the marketing department has shown us that we cannot do without good IT support. Our jobs rely on the systems to be running, whether they are cloud based offerings that need to be online 24/7 or personal devices such as laptops and tablets that are used to create even more interesting campaigns. Also strong automation is making our lives much easier and as marketing automation expert, I always feel there is nothing cooler than a completely automated campaign that actually starts to live its one life and actually improves our service offering to prospects and customers. Also aspects of IT systems management such as reporting are things we as a marketing department also run into. Because just as IT wants to know what assets are being managed and how they are performing, so does marketing want insight into the running of campaigns and performance of these. Also, as with IT departments, we as marketers are also continuing to improve our process and to adapt to the changing business environment and resulting new opportunities.

Overall, the link between automated marketing, IT and the new cloud services can help marketing drive really cool marketing campaigns.

If you have any questions or would like to share your personal experiences either as a marketer or as an IT manager about marketing automation I’d love to read your comments.

MSP Best Practice: Thoughts on Being a Trusted Advisor

Kaseya

Nothing is more important for MSPs than retaining existing customers and having the opportunity to upsell new and more profitable services. The cost of customer acquisition can make it challenging to profit significantly during an initial contract period. Greater profitability typically comes from continuing to deliver services year-after-year and from attaching additional services to the contract as time goes on. Becoming a trusted advisor to customers, so that you are both highly regarded and have an opportunity to influence their purchase decisions, has always been important to this process.  However, how you become a trusted advisor and how quickly, depend on some key factors.

Challenge your customer’s thinking

According to Matthew Dixon and Brent Adamson, authors of “The Challenger Sale*”, it’s not what you sell that matters it’s how you sell it! When discussing why B2B customers keep buying or become advocates – in short, how they become loyal customers – the unexpected answer is that their purchase experiences have more impact than the combined effect of a supplier’s brand, products/services, and their value-add!

Not that these factors aren’t important – they clearly are vital too – it’s just that beyond their initial purchase needs, what customers most want from suppliers is help with the tough business decisions they have to make. This is especially true when it comes to technology decisions. The best service providers have great experience helping other, similar, companies solve their challenges and are willing to share their knowledge. They sit on the same side of the table as the customer and help evaluate alternatives in a thoughtful and considerate fashion. In short, they operate as trusted advisors.

The key is to start out as you mean to continue. How can you make every customer interaction valuable from the very outset, even before your prospect becomes a customer? Dixon and Adamson suggest the best way is to challenge their thinking with your commercial insight into their business. What might be the potential business outcomes of contracting your managed services? Yes, they will benefit from your expertise in monitoring and maintaining their IT infrastructure, but in addition, how can the unique characteristics of your services and your professional resources enable new business opportunities for them? What might those opportunities be?

Tools matter

Beyond insights gained from working closely with other customers, having the right tools can have a significant impact too. For example, there are monitoring and management tools that can be used to provide visibility into every aspect of a customer’s IT environment. But tools which are focused on a single device or technology area or are purely technical in nature, have only limited value when it comes to demonstrating support for customers’ business needs. Most customers have a strong interest in minimizing costs and reducing the likelihood and impact of disruption, such as might be caused by a virus or other malware. Being able to discuss security, automation and policy management capabilities and show how these help reduce costs is very important during the purchase process.

Customers who absolutely rely on IT service availability to support their business require greater assurance. Tools that cut through the complexity and aggregate the details to provide decision makers the information they care about, are of immense value. For example, the ability to aggregate information at the level of IT or business service and report on the associated service level agreement (SLA). Better still, the ability to proactively determine potential impacts to the SLA, such as growing network traffic or declining storage availability, so that preventative actions can take place. Easy to understand dashboards and reports showing these results can then be used in discussions about future technology needs, further supporting your trusted advisor approach.

With the right tools you also have a means to demonstrate how you will be able to meet a prospect’s service-level needs and their specific infrastructure characteristics, during the sales process. In IT, demonstrating how you will achieve what you promise is as important, if not more so, than what you promise. How will you show that you can deliver 97% service availability, reliably and at low risk to you and to your potential customer? Doing so adds to your trusted advisor stature.

Thought leadership

Unless you have a specific industry focus, most customers don’t expect you to know everything about their business – just about how your services and solutions can make a strong difference. They will prefer to do business with market leaders and with those who demonstrate insight and understanding of the latest information technology trends, such as cloud services and mobility, and the associated management implications. First, it reduces their purchase risk and makes it more likely that they will actually make a decision to purchase. Secondly it adds credibility, again enabling them to see you as a trusted advisor, one who demonstrates a clear understanding of market dynamics and can assist them in making the right decisions.

Credibility depends a lot on how you support those insights with your own products and services. Are you telling customers that cloud and mobile are increasingly important but without having services that support these areas? What about security and applications support?

Being a trusted advisor means that you, and your organization, must be focused on your customers’ success. Make every interaction of value, leverage the right tools and deliver advanced services and you will quickly be seen as a trusted advisor and be able to turn every new customer into a lasting one and a strong advocate.

Learn more about how Kaseya technology can help you create advanced managed services. Read our whitepaper, Proactive Service Level Monitoring: A Must Have for Advanced MSPs.

*Reference: The Challenger Sale, Matthew Dixon and Brent Adamson, Portfolio/Penguin 2011

What tools are you using to manage your IT services?

Author: Ray Wright

Using IT Management Tools to Deliver Advanced Managed Services

IT Management Tools

The managed service marketplace continues to change rapidly, particularly as more and more businesses are adopting cloud-based services of one type or another. The cloud trend is impacting managed service providers in numerous ways:

  • Cloud migration increases the potential for consulting projects to manage the transition but reduces the number of in-house servers/devices that need to be monitored/managed, impacting retainer-based revenues.
  • Service decisions are more heavily influenced by line-of-business concerns as customers shift spending from capital to operating expenses.
  • Service providers need be able to monitor and manage application-related service level agreements, not just infrastructure components.
  • Managing cloud-based applications is less about internal cloud resources and their configuration (which are typically controlled by the cloud provider) and more about access, resource utilization and application performance.

To address these challenges and be able to compete in a marketplace where traditional device-based monitoring services are becoming commoditized, MSPs must create and sell more advanced services to meet the changing needs of their customer base. The benefits of delivering higher value services include greater marketplace differentiation, bigger and more profitable deals, and greater customer satisfaction.

Advanced services require the ability to deploy a proactive service level monitoring system that can monitor all aspects of a customer’s hybrid cloud environment including the core internal network infrastructure, virtualized servers, storage and both internal and cloud-based applications and resources. Predictive monitoring services help ensure uptime and increased service levels via proactive and reliable notification of potential issues. Advanced remedial actions should include not only support for rapid response when the circumstances warrant but also for regular customer reviews to discuss longer term configuration changes, additional resource requirements (e.g. storage), policy changes and so on, based on predictive SLA compliance trend reports.

Beyond advanced monitoring, professional skill sets are also very important particularly when it comes to managing new cloud-based applications services. To be able to scale to support larger customers requires tools that can help simplify the complexity of potential issues and speed mean time to resolution. If every complex issue requires the skills of several experts – server, database, network, application etc., it will be hard to scale your organization as your business grows. Having tools that can quickly identify root-causes across network and application layers is vital.

Cloud customers are increasingly relying on their managed service providers to “fix” problems with their cloud services, whether it be performance issues, printing issues, integration issues or whatever. Getting a rapid response from a cloud service provider who has “thousands of other customers who are working just fine” is hard to do, especially as they know problems are as likely caused by customer infrastructure issues as by theirs. Learning tools help MSPs capture and share experiences and turn them into repeatable processes as you address each new customer issue.

Automation is another must have for advance service providers. Again, scalability depends on being able to do as much as possible with as few resources as possible. For infrastructure management, automation can help with service and application monitoring as well as network configuration management. Monitoring with application-aware solutions is an attractive proposition for specific applications. For the rest, it helps to be able to establish performance analytics against key performance indicators and diagnostic monitoring of end-user transaction experiences. For network management, being able to quickly compare network configurations and revert back to earlier working versions is one of the fastest ways to improve mean time to repair. Automating patch management and policy management for desktops and servers also results in significant manpower savings.

Finally, tools which help manage cloud service usage are also invaluable as customers adopt more and more cloud services. Just as on premise license management is an issue for larger organizations so cloud service management, particularly for services such as Office 365, is also an issue. Access to email accounts and collaborative applications such as SharePoint, is not only a security issue it’s also a cost and potentially a performance issue.

Developing advanced services requires a combination of the right skills, resources, processes and technology; in effect, a higher level of organizational maturity. Larger customers will tend to have developed greater levels of process and IT maturity themselves, in order to be able to manage their own growing IT environment. When they turn to a managed service provider for help they will be expecting at least an equivalent level of service provider maturity.

Having the right tools doesn’t guarantee success in the competitive MSP marketplace but can help MSPs create and differentiate more advanced services, demonstrate the ability to support customer-required SLAs, and scale to support larger and more profitable customers.

Learn more about how Kaseya technology can help you create advanced managed service. Read our whitepaper, Proactive Service Level Monitoring: A Must Have for Advanced MSPs.

What tools are you using to create advanced managed services?

Author: Ray Wright

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