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Good service could net European MSPs a slice of a

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Good service could net European MSPs (Managed Service Provider) a slice of a €6.2 billion market

       President & CEO of Nimsoft 

Is it possible to place a figure on good service? How about €6.2 billion? This is the value that the European managed services market is expected to be worth by 2011. The forecast by the Broad Group is based on the first assessment of service offerings in the sector and the strategies of new market entrants. It suggests that the European managed services sector will emerge as a significant and distinct growth market. 

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For those managed service providers (MSPs) and channel companies wanting to move into this lucrative market, a major hurdle is reconciling the expectations that surround service with the demands placed on delivery. This requires an appreciation of service level management and the role it must play if MSPs are to claim a share of the €6.2 billion opportunity.

The challenge facing MSPs For any channel company wishing to become an MSP, it is important to recognise the foundation on which the business functions. The MSP model is predicated on the effective management of IT infrastructure. With the technology landscape constantly changing, this becomes a demanding task.

Add to this the complex nature of IT itself and it becomes quickly apparent that existing and potential MSPs have their work cut out. Not only are MSPs expected to manage their clients’ infrastructure and services but they have to ensure that their own IT infrastructure is able to keep pace with the demands placed on it.  It used to be said that the customer was king. In today’s commercial world, customer service is king. Nowhere is this more apparent than in the managed services market. The insistence on service level agreements (SLA) reflects the move toward an on-demand, service-driven environment in which IT itself is viewed as a service. The success or failure of an MSP is now measured by its ability to deliver against stringent SLA’s.

Indeed the popularity and demand for managed services hinges on the explicit understanding that MSPs will consistently deliver system availability and reliability against exacting standards. Suddenly, the challenge facing MSPs mushrooms. For MSPs and channel companies that have their sights on the €6.2 billion prize, the ability to proactively monitor and manage IT infrastructure is no longer a nice to have option but a must-have requirement.  As the European managed services market develops, the real winners will be those MSPs that have the staying power to deliver against ever tighter expectations. This requires a degree of planning and an understanding of how service levels are affected by changes to and failures in the IT infrastructure. Armed with this information, MSPs can anticipate their clients’ requirements and create new products and services accordingly. 

Why SLM?
Before we discuss the benefits that SLM can deliver for channel companies and MSPs alike, it would help to clarify what we mean by the term. Put simply, Service Level Management is the process of setting, measuring and maintaining service goals according to the needs of the business. SLM defines the metrics for measuring service success, a means for monitoring those metrics and a process for responding when a breach of the metrics is imminent or the targets are unlikely to be met.  In many ways, SLM is akin to the quality management systems that prevail in other industries. Critically, SLM provides the verification that what is delivered conforms to user expectations and identifies the areas to be improved for a better service. Just as business process outsourcing took hold in the corporate world, so managed services has begun to take root.

A specialised form of outsourcing, managed services offers organizations a way to deal with the complexity of today’s infrastructure technology. The relationship between the MSP and its client is typically articulated in the form of a Service Level Agreement and it is the SLA that can make or break the business relationship. Given this, it is imperative for MSPs to be able to anticipate and manage potential problems that could jepordise the SLA. This is where an SLM solution comes into its own. Using a dedicated offering, such as NimBUS, MSPs can quickly and easily deploy a solution that offers breadth and depth in their monitoring functionality. 

The level of sophistication allows MSPs to perform simple up/down testing for network devices and application servers to detailed performance trend analysis and SLA compliance reporting. This gives MSPs the ability to keep one step ahead through the proactive management of the IT infrastructure. This is the key to ensuring that any problems with the IT infrastructure do not result in an adverse affect on the overall SLA.  

ConclusionThe managed services sector is exploding, particularly in Europe. The market will triple in value by 2011 to €6.2 billion. Success in this market will depend on an MSPs ability to provide a transparent service and its ability to pre-empt and manage potential issues that would otherwise lead to a breach in service level agreements. Service is the name of the game and this has become more pronounced as companies view IT in a different light. IT is a service and it must be able to deliver against ever demanding targets and stringent expectations.  For many channel and reseller companies, the MSP sector offers new revenue opportunities.

Whether it is web hosting or managed services, the fact remains that MSPs are only as competitive as the IT infrastructure upon which they base their business. In a service driven culture, downtime translates into lost revenues and business. SLM technology has evolved over the years to the point where small channel companies can become MSPs and deliver a standard of service confident in the knowledge that they can proactively monitor and manage any infrastructure difficulties before they become a real problem. SLM is the foundation upon which they can tap into a €6.2billion opportunity.