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Summer 2010
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Channel Advisor Expert Insights

 

Justin Crotty, Vice President of Services, Ingram Micro North America, was responsible for the launch of Ingram Micro's brand-new Seismic offering of hosted managed services. The Channel Advisor team recently sat down with Justin to get some expert insights into the business proposition behind managed services.

Are your VARs embracing managed services?

Without question, movement is increasing each month. Specifically, there is strong interest in hosted offerings for their ease of use, low cost-of-entry and low-risk profile. We are seeing great interest from our VARs in the Ingram Micro solution, since the Seismic solution protects the VARís account ownership and allows the VAR to manage and control the delivery of the service.
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We recently asked Level Platforms CEO Peter Sandiford to describe the steps VARs should follow in moving their business to the managed services model. Peter is in an ideal position to answer this question, since his firm has won over some 2,000 solution providers to its next generation remote monitoring and management technologies.

What is the best business model for VARs to use for managed services?

There isn't one single best way. We have thousands of VARs using our platform to deliver managed services, and we've found that they have adopted many different business models depending on the verticals they serve and the products they focus on. There are lots of different types of solution providers. Some sell traditional IT products like servers and printers, others focus on something very specific like IP telephony, some are ISVs (independent software vendors) who focus on their own application and want a way to monitor it. The reality on the ground is highly diverse. A consequence of this diversity is that from our point of view managed services are whatever our VAR customers want them to be.
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Jeff Gould, editor of Channel Advisor Expert Insights, looks at the business logic behind Ingram Micro's Reseller Services Portal.

Don't forget to ask your customer to buy.

That's a lesson my wife learned first hand in her small family-style restaurant. When she first started out she was a little shy about promoting her wines and desserts. We used to joke about how much she hated all those pushy upscale places where they ask you every five minutes if you need another bottle of imported mineral water. She stopped joking the day she realized she was losing money even though she had plenty of customers. It turned out diners really did want that dark chocolate cake and the extra glass of cabernet. Once she started asking, they started buying.
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Jack Gerbs, owner of Ohio regional VAR Quanexus, has strong views about the real value proposition of managed services for his clients.

How do you define managed services?

When most people say "managed services", they mean the provision of remote monitoring and management services. And this is certainly a very important piece of the puzzle. But in a broader sense, managed services is more than that. It's all about assuring the availability of critical IT systems and networks and the continuity of the business activities that depend on them. The key is the SLA (service level agreement) that guarantees the customer will have a certain level of uptime. Managed services in the narrow sense is a tool you need to implement the SLA. But you have to do a lot more to meet a really demanding SLA. There's a big difference between taking a week to restore the customer's data to the state it was in a week ago, and taking only one hour to restore it to where it was five minutes ago. It's a lot harder to reach that second level of availability. You need a complete plan in place for getting the system back up within a certain specified amount of time after it goes down. That's managed services in the broad sense.
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We recently sat down with Craig Flint, founder of Computer ER and a pioneer user of Ingram Micro's Seismic hosted managed services platform.

What percentage of your customers do you expect to move to managed services?

We have a huge list of people we think could benefit from it. It should work for 85% to 90% of our customers. There are a few that it won't work for based on their network or something unusual that they're doing. For those customers we will just continue on the break-fix model of billable hours. For other customers, in some cases we may have to draw a line in the sand and tell them we can't help them unless they're on managed services. But basically we still want to help them, if we bill them at an hourly rate that can still be quite lucrative. We also have a drop-off business where people bring in computers for repair, and that may continue, though it might decline as a share of our total business.
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Jeff Gould, editor of Channel Advisor Expert Insights, asks how getting a faster quote from Cisco is like getting a piece of cake at your favorite restaurant.

Know your customer.

My wife is a never-ending source of business wisdom. In the small neighborhood restaurant she owns, she's learned that remembering customers and their preferences isn't enough to maximize sales. She also needs to adjust her prices based on customers' buying patterns. The faithful repeat diner earns an extra glass of wine or a slice of cake on the house. The large group that orders its menu items ahead of time obtains a discount. The penny-pinching couple that splits a salad gets a surcharge.
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