The IBM i Community Is Eying the MSP Option

July 15, 2013 Dan Burger

The successes of companies that are pioneers in the adoption of managed services–what some call hosting and others call cloud computing–will encourage others to follow. There just haven’t been all that many successes so far. At least not in the IBM midrange community, and especially if you separate the disaster recovery and high availability business from companies who would put their production server in the cloud.

I think the successes in the DR and HA environments are terrific, and they do encourage others to follow that lead. But that is still a long way from loading day-to-day, mission critical enterprise business applications miles away from the home office in someone else’s data center. That’s the direction managed services is headed. Relieving the pain of managing systems in-house seemed to be the pill that companies would line up to for their prescriptions. There’s not a lot of that so far.

It appears to me that expectations were a little too high for this early in the game. (Not an uncommon occurrence in the IT business.) The forecasted shifts in the marketplace take IT from on-premise–where IBM i shops have traditionally developed and implemented and maintained systems–to off-site data centers. Companies no longer own the infrastructure and they move away from internal builds that are the heart of traditional IT. The discussions remain, for the most part, in the talking stages.

There are a variety of reasons for this. It begins with MSPs still getting their houses in order. Some are better than others mainly because they have been providing some type of a managed service for a longer period of time. But there are still many MSPs that are building partnerships on the fly in a learn-as-you-go process. Another factor is the resistance to overcoming the traditional approach to in-house IT. Often it is talked about as if it’s a curse, but in reality it will not be overcome quickly or easily. It’s a fundamental change that will take some time. The short answer is that this is not as easy as it looks from either side of the desk whether you are buying these services or selling them. Sales cycles are extended because companies remain uncertain.

Frankly, I don’t think the MSPs have done a very good job getting their message out. Overall, the marketing has been slow and uneven. There are two goals for marketing. One is to promote managed services as being at least as good as what any shop can do internally, but with fewer headaches and less worries when it comes to putting new technology to work. Many MSPs contend they can not only do everything better because they have the skills and the training, but they can do it less expensively as well. This message is not getting through. The other marketing job is differentiating one MSP from the others. The differentiations come in many forms from data center design, to the technical skills, to the company’s longevity and dedication to service.

IBM i shops that are open to the idea of working with a managed service provider still have to be convinced that the systems they would be renting will be highly available. That’s the easiest part for MSPs to prove and is the one area where MSPs are gaining the most ground by providing DR and HA options beyond what companies could do on their own at a price point that beats the MSP.

Beyond availability, there’s still the question of security. The truth of the matter is that most companies aren’t doing such a great job with security in their on-premise systems. They just feel more secure.

And the biggest obstacle that remains in the way for the MSP model is the idea in the minds of on-premise IT staff–as well as executive management–is that off-premise comes with a loss of control.

All of these factors will take time to overcome.

There is some headway being made. I know there are pockets of MSP success. I suspect you will be hearing more about those in future issues of the IT Jungle newsletters.

Just last week I was talking with Bob Morici, director of technical sales at Baseline Data Services. Morici was in the process of helping a company–he did not have permission to use its name–to set up a target box for high availability in the Baseline data center. The company was also moving its test and development system to the care and keeping of Baseline. Morici said the financial case for the company to improve its recovery point objective and recovery time objective made that portion of the decision easy. The company also had a lease expiring on the IBM i server that was being used for the test and development environment, which made for good timing. The server that remains on premise is a new Power7 system.

The customer in this case has a working history with Baseline and has developed a level of trust with the MSP based on a disaster recovery deployment that has gone well for several years.

I think we’ll see more of these types of developments based on established business relationships that lead the way in the managed services market. In the near term, MSPs will continue to find it difficult to gain ground with new customers.