managed services demandNow that more application workloads than ever are running in either a public cloud or a third-party data center, it appears IT organizations are starting to appreciate the value of managed services. A new Voice of the Enterprise survey of 600 IT professionals published this week by 451 Research finds that 75 percent of the respondents are willing to pay a premium for enhancements to hosting and cloud services. The most desired service improvements are guarantees of security (49 percent) and service performance (43 percent). On average, the survey respondents said they are willing to pay a 30-percent premium for these services.

At the same time, the survey makes it clear organizations are still reluctant to give up total operational control of the IT environment. Only 28 percent said they are interested in paying service providers to take on the operational management burden. In terms of paying a premium, operational management was ranked lowest (28 percent), compared to the highest ranking for enhanced customer service and support (33 percent).

The right MSP opportunities

The report also finds that even when certain services are bundled with application and infrastructure services respondents are not especially satisfied. Well over half the respondents (58 percent) said managed services or security services bundled with infrastructure or application services is an important capability for them. But, only 39 percent of respondents said their current vendors meet this expectation.

The survey results suggest that managed service providers are better off focusing their initial sales efforts on services that customers either don’t feel they can do well themselves, such as security, or services that cloud service providers are not interested in, such as customer support. Once a relationship is established, the MSP can make a case for taking over operational management. But making that case from the start either requires too much trust or is simply perceived as a threat to the the internal IT organization. It’s better to start small by focusing on services where everyone agrees there is a clear need for another approach.

Another area where providers of infrastructure and application services are viewed as being deficient is application workload migration. A total of 43 percent of the respondents ranked this service as being important, but only 20 percent of the respondents say their current vendors meet this expectation. Migrations may only be a one-time event, but MSPs that handle that service well will at least establish the makings of a trusted relationship.

MSPs need to think long-term

Organizations of all sizes are wary when it comes to IT. They may be relying more on external services than ever before. But, most IT professionals continue to believe they can provide better levels of service at a lower cost, despite mounting evidence to the contrary. It still takes most IT organizations far too long to stand up an application and deliver a regular cadence of updates, though.

Business leaders are making it clear they want IT services to be both more flexible and agile. That doesn’t mean they are willing to replace their IT organizations just yet to achieve that goal. But, more of them than ever are starting to consider the possibility. The challenge MSPs face now is maneuvering themselves into a position where the first person anyone has that conversation with is an MSP they already know and trust.

How to explain the value of an IT investment


Photo: Gajus/Shutterstock

Mike Vizard

Posted by Mike Vizard

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications including InfoWorld, eWeek, CRN, Baseline, ComputerWorld, TMCNet, and Digital Review. He currently blogs for IT Business Edge and contributes to CIOinsight, The Channel Insider, Programmableweb and Slashdot. Mike blogs about emerging cloud technology for Smarter MSP.

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