The Hidden Cost of Hourly IT

It’s no secret that there is a trend in IT towards everything-and-anything-as-a-service. Software-as-a-service, security-as-a-service, infrastructure-as-a-service, platform-as-a-service, unified-communications-as-service, the list is endless (as are the hyphens). So I decided to jot down a few words about what it all means. Since there’s a lot of subject matter to cover here, this will be the first of a series of blog posts on the topic. How many? I don’t know yet. Let’s find out.

Since it’s kind of the original “as a service,” let’s start with Managed Services. Managed Services refers to outsourced IT support in which you pay an all-inclusive flat-fee each month, as opposed to paying hourly when something breaks. Let’s take a look.

More Horsepower

When you engage a traditional IT consultant, all you’ll getting is their time. Nothing fancy, just their labor to fix or replace whatever broke or is no longer serving your organization. When you engage an MSP (Managed Services Provider), you’re getting much, much more.

MSP’s use specialized software that allows them to remotely monitor and manage your IT resources. What this means for your business, is that remediation of any problems on your network can be begin as quickly as possible, meaning less downtime for you. In fact, RMM (remote monitoring and management) software is so sophisticated, it can self-heal many problems all on it’s own. If the software is unable to fix the problem on it’s own, it will alert the MSP to any conditions that may be a cause for concern. In this way, remediation can usually begin before an outage even occurs.

By the way, these added bells and whistles aren’t just for the benefit of the MSP’s customers. There’s definitely some self-interest at play here too, but we’ll get into that later.

MSP’s Have Multiple Personalities

Providing managed services takes a lot more resources than that it does to simply fix things when they break. If an IT service provider is offering flat-rate IT-as-a-service, chances are, they employee more than one or two technicians. What’s likely is that they have different employees that are trained in different IT specialties. Network security is much different than server management or desktop support. Break/fix technicians are usually jack-of-all trades, meaning they can probably get the job done, but it might not be the best solution to your problem and it might take them longer to find it. This can have the effect of increasing over-all costs to you, the person footing the bill. Which leads me to main reason I’m so biased towards managed services…

Self-interest for the Win

The main reason I’m biased towards the flat-fee managed services model is that it gets everyone’s motivations lined-up the right way. What’s even better, is that it does so by promoting everyone’s own needs.

To explain this, let’s first look at the traditional break/fix model of IT service. When a business waits to pay their IT services provider until something breaks, the service provider has an incentive to create more billable hours. That’s how they get paid. The more time spent on a customers network, the more money they make. This may serve the IT consultant, but it doesn’t really server the interest of the client. The business owner or manager wants their IT resources not to break in the first place. His or her goal is to keep their systems running smoothly, with as little cost and as little downtime as possible.

Now lets take a look at the MSP, who charges a flat-monthly fee to support and maintain their customer’s IT resources. Since the MSP gets the same amount of money whether they do any work on the network or not, they have the reverse incentives of the break/fix service provider. The less time spent on a customers network, the more money they make. What crooks, right? It seems that the lousy bums just want to take the money and run. But hold on a second, not all is what it seems. If the MSP’s client experiences any downtime at all, the MSP is on the hook to get things going again, no matter how long it takes. The more time it takes, the less profitable the MSP’s business is. Earlier, I suggested that the sophisticated tools used by MSP’s may be to their benefit too, and not just to impress their clients. Nothing could be more true. Because they have invested in the right people and the right tools to manage their clients networks, MSP’s customers experience less outages and reduced overall downtime. Less downtime means less overall work for the MSP. The old adage holds true. An once of prevention is worth a pound of cure, and that’s good for everyone involved.

If you’re able to break free from the mindset of paying for downtime, and realize it’s more beneficial for your business to pay for uptime, it’s easy to see why your true costs are actually lower with the managed services, or IT-as-a-service model. Your business will experience less downtime, get the maximum benefit out of your IT spend, and have happier, more productive employees.

Everybody wins with managed services, and who doesn’t like winning?