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Strategy Brief | IT

The Evolution of

ITManaged Must Shift from Provider Services to Integrator in this New Sourcing Model

An Evolving Landscape controversial book, “Does IT matter? Global sourcing, open source, and Information Technology and the Moore’s law have made technology Corrosion of Competitive Advantage,” widely available, standardized, and Carr presented a strong case that IT “If traditional IT is no longer cheaper than ever. Further Cloud, products and services are becoming a strategic differentiator, Virtualization, As-a-, Business increasingly commoditized and as IT Executives are then Platforms and new forms of delivery such provides little opportunity for a are changing the technology landscape. business to gain competitive advantage. forced to gain a better Although cost and service levels are For example, he asked, “How much understanding of the still important, ensuring that IT is market differentiation does email optimized to deliver value back to provide to an ?” His value and source of the the business is now a top priority answer: none. In today’s world, more services they provide and for leading companies. and more aspects of IT are being rethink their role in the expects more productivity but lower outsourced and while important to costs from their IT investment and keeping the company running are not organization.” are investigating initiatives that the source of competitive advantage. Daryl Meske will reduce their OpEx and enable If IT is no longer a strategic Principal, WGroup them to focus on core competencies differentiator, IT Executives are then and strategic priorities. forced to gain a better understanding The willingness to outsource IT of the services they provide, and functions and entire IT departments undertake an accurate cost-benefit has increased dramatically in the last analysis of why the services they offer several years. Increasingly, internally are a better value than are becoming mature outsourcers services being offered by a managed with second and third generation service provider that promises . Today it is estimated service excellence at a defined cost. that 90% of the Fortune 1000 companies outsource infrastructure and/or applications in some way. is the Future of IT Meanwhile, almost ten years later All organizations depend on IT to after first hitting the market, Nicholas be successful. If IT resources and Carr’s book still rings true. In his processes are implemented, managed 1 Group recommends that before embarking on an initiative to make extensive use of managed Wservices, it is highly desirable for an organization to be well into implementation of an ITIL version 3 strategy. As part of this strategy, efficient processes should be in place for service planning, and service evaluation.”version 3 strategy. As part of this strategy, efficient processes should be in place for service planning, service design and service evaluation.

and supported in the appropriate specialist partners for the delivery of • Telephony, Telecommunications, way, the business can become more component services. One option is and Web Conferencing Services productive, more efficient, and most to partner with a Managed Service • Transportation Services importantly better able to compete in Provider (MSP). A managed service the marketplace. To do this, IT must is an offering by an MSP for a Managed Service view itself as a provider of services to complete service solution including the business. The challenge for today’s all infrastructure, software and Providers (MSP) IT manager is to coordinate and work management. There are well over 500 MSP’s today. in with the business to transfer day-to-day management Through specialization, advanced define, design and deliver high-quality responsibility to the specialist remote networking tools, and IT services at a competitive cost. organization and provide for improved pervasive use of the Internet, many and efficient overall operations The primary objective of IT Service small- to middle-sized players have for the customer organization. Management (ITSM) is to ensure that entered this space with excellent IT services are aligned to and actively Generally, but not always, managed results. A few examples include: support business needs. It is imperative services are delivered from outside • Rackspace – Provider of that IT services underpin the business a company’s internal network hosted Windows, Linux, processes; it is also increasingly with a special emphasis placed on and Exchange Servers important that IT acts as an agent integration and certification of • Salesforce.com – Provider of CRM for change to facilitate business Internet security for applications Software as a Service (SaaS) transformation. Using principles of and content. MSP’s often serve as • Kaseya – Integrated IT the ITIL, these objectives can be agents for companies, automation framework achieved. ITIL provides an excellent especially other service providers like • Secure24.Com - Dedicated and widely used framework for IT ISPs, that don’t have the resources hosting of disaster recovery services. It provides the necessary to constantly upgrade or maintain and ERP Systems processes for planning and managing faster and faster computer networks. • Fortiva – email archiving solution services whether provided internally or Managed services are not a new idea. by an external service provider. It also • Brixtel – Managed security service In fact, they have been around in provides needed mechanisms to control some form for more than 40 years. The managed service space is starting costs, manage service providers, manage Managed services are now available to become very interesting. Many of quality, perform capacity planning, for the many areas, for example: the offerings are quite specialized. and resolve service-related problems. Because of such specialization • Application Services and focus, small and niche players Under an ITSM model, IT needs • Backup and Recovery Services to develop a catalog defining the can often provide superior service • Content and Knowledge scope, characteristics, and costs offerings compared to internal Management Services of available services and manage IT departments or larger, more- those services effectively to • Desktop Services traditional IT outsourcing suppliers. provide value to the business. • Email Services In addition to the smaller players, • Help Desk Services large players such as Cisco, Microsoft, Managed Services • Hosting Services and Dell have entered the market. • IT Services Cisco Systems is aggressively pushing It is also clear under ITSM that it is • Network Services its IP communications and WebEx not imperative for IT organizations capabilities, while Microsoft promotes • Security Services to provide the service with internal the virtues of its various “software resources. In fact, increasingly IT • Storage Services plus services” solutions. The two are organizations are reaching out to

2 WGroup on a collision course in the unified The SaaS market is shifting from that IT doesn’t matter. They aren’t messaging and communications point solutions to a platform strategy. saying IT isn’t important to their market, meaning each will spend Software-as-a-Service (SaaS) is rapidly business, but they recognize that in plenty on market education and evolving to emulate the software the face of escalating competition channel sales programs. At the same industry as a whole. Although most and budget pressures, they must time, Dell is leveraging its SilverBack people associate SaaS with Google’s refocus on core competencies to Technologies and Everdream collaboration and productivity oriented strengthen their corporate positions. acquisitions to deliver a new set of applications and with Salesforce.com’s As a result, a growing proportion automated, remote desktop and server customer relationship management and of customers now believe it doesn’t management capabilities through sales automation solutions, the truth make sense to dedicate as much channel partners and direct support is that SaaS alternatives now exist for staff and systems to IT management services. Finally large IT services nearly every legacy application category. when a third party can do it better firms like and IBM offer at a lower cost. Also, users have various Managed Services offerings. The Future of become accustomed to the ease of Managed Services use of today’s on-demand consumer Software as a services and would like a similar set Despite numerous analyst predictions of online storage, security and other Service (SaaS) and good press around the prospective on-demand services in the office. Software as a Service has also emerged future benefits of managed services, as a managed service. Past concerns customers have remained reluctant regarding SaaS reliability, security and to relinquish all or part of their IT Replacement of compliance are fading as organizations operations to a MSP. Sometimes it’s Traditional IT Outsourcing of all sizes discover that SaaS often because the MSP is located remotely Agreements outperforms traditional on-premises and can’t establish a face-to-face applications. SaaS vendors are also relationship to create enough trust Many organizations are also responding to the need for increased In other cases, local VARs seeking considering using managed services customization and integration. to add managed services to their as a replacement for traditional portfolios have failed to understand information Now that the functional capabilities the significantly different sales and tools and mega-outsourcing of SaaS have been proven, customers support requirements of the model. In arrangements because they provide are reaping the business benefits. both scenarios, aspiring MSP’s have a more cost-effective method of Lower upfront costs and quicker pushed the managed services concept managing and protecting enterprise deployment cycles produce faster on generally uninterested customers networks, systems and applications time-to-value and lower total cost of However, times are changing. Managed service providers ownership. Given today’s commonplace generally offer several different price concerns about the economy, SaaS In the past, many customers considered structures for the managed services. has quickly becoming a preferred IT operations an essential corporate However, the most commonly used approach. SaaS Web-based design also asset, and even a competitive weapon, structure is a per month per unit permits better access and collaboration which they could not offload to a third fee as price per user, desktop, server, for increasingly dispersed workers party, especially when outsourcing gigabyte, or network device. and better communication with arrangements missed business customers and external partners. SaaS objectives and were either restructured Remote technology is rapidly moving archiving and tracking capabilities or terminated early. Today, a growing forward by leaps and bounds. Remote will also help companies meet number of customers have accepted tools allow MSP’s to virtually escalating compliance requirements. the infamous words of Nicholas control companies entire network Carr, who suggested in back in 2003 operations from off-site locations in

The Importance of Governance and Relationship Management in Outsourcing 3 low cost countries without having of our services are listed below. Please • to step foot onto company premises. contact WGroup for more information This allow the MSP’s monitor • Anti-Virus and Spam Management on our services or to learn more about the client’s IT infrastructure and • Secure Messaging/E-mail our case studies and experience. resolve any issues that arise. • Threat Assessment Monitoring • Managed Services Strategy Managed services provide small • Managed Business and Business Case business and medium sized Continuity Service • Planning and Governance an option to have their IT needs taken Before embarking on an initiative to for Managed Services using care of instead of paying an on-site make extensive use of managed services, the ITIL V3 framework staff. It provides larger companies a it is highly desirable for an organization • Requirements Definition viable alternative to traditional IT to be well into implementation of for Managed Services infrastructure (ITO) or Application an ITIL version 3 strategy. As part • Managed Services and Maintenance Outsourcing of this strategy, efficient processes Sourcing Assistance (ADM). The following types of should be in place for service planning, • Specialized Next Generation services have been turned over to service design and service evaluation. renegotiation and MSP’s by several large companies. Retendering services • Managed Windows and How WGroup Can Help • Transition Management UNIX Servers WGroup can help you identify the ideal • Vendor Management Office design, • Managed Microsoft managed services strategy and chose and implementation services Exchange Servers and contract with the right service • Vendor Management, Transition • Managed Voice Access management provider enabling you to Management Leadership staffing and Networking achieve such results as reduce operating • Managed Integrated Access costs, increase productivity and focus • Managed Remote Access on strategic responsibilities. Examples • Network Monitoring • Network Element Management • Network Management About WGroup • Fault and • • EDI Founded in 1995, WGroup is a boutique management consulting that • Managed Router Service provides Strategy, Management, and Execution Services to optimize • Managed Server Service performance, reduce costs, and create value for Fortune 1000 companies. • Managed VPN / IP-VPN Our consultants, who have years of experience, both as industry • Managed Wireless LAN (WLAN) executives and trusted advisors, help clients think through complicated • and pressing challenges so they can drive their business forward. • Managed Videoconferencing IT_EVMSSB_091712_006 • Managed IP-PBX and Applications For more information on WGroup, visit http://thinkwgroup.com • Web Conferencing Services • Hosted IP-PBX and Applications • Managed Voice Security Contact Us • Managed Firewall WGroup 301 Lindenwood Drive, Suite 301 • Managed Intrusion Detection Malvern, PA 19355 • Vulnerability Scanning 610-854-2700

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