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Get in the Game with Wi-Fi Managed Services, Part 2

November 14th, 2013

This is part 2 of my post on the managed service provider model in Wi-Fi. Click here for part 1.

Is Wi-Fi Ready for MSPs?

An important consideration when offering Wi-Fi as a managed service is whether or not the Wi-Fi solution you will choose is designed for it, both from the technical and business aspects. There’s far more to the selection process than meets the eye, and a few (of many) requirements might include:

  • Simplified equipment licensing procedures
  • Hierarchical and well-controlled super- and multi-tenant management capability
  • Management system simplicity, scalability and redundancy
  • Capability to manage distributed customers
  • Controller-less architecture to enable remote management with scalable economics (a requirement to make Wi-Fi managed services cost-effective)
Near-Zero Startup Cost MSP

Starting a typical MSP is a high-capex endeavor (data center space, servers, management software, equipment licenses, APs, etc.), which is why it is primarily the domain of larger companies. With manufacturer-sponsored equipment financing (like AirTight’s opex sales model) and resalable AirTight cloud management and services (such that the MSP doesn’t have to build their own cloud management system), the startup cost for getting your MSP on its feet just went to near zero. This means that every channel partner who wishes to engage in managed services needs only to:

  • Put together the appropriate customer contracts
  • Understand how to compensate their sales professionals
  • Understand how/why/when to sell managed services.
Leveraging the MSP model

Wi-Fi technology is now experiencing major upgrades more quickly than ever, and customers may not want to invest in technology for the full ~5 years of expected useful product lifetime. Instead of over-buying, they may desire, due to costs and product maturity, to deploy 802.11n today, and in a year deploy 802.11ac Wave-1, and in another year deploy 802.11ac Wave-2. With an opex sales model via an MSP, they can do exactly that – cost effectively and with minimal technical or logistical hassles. Given MSP’s engineering resources and significant vendor relationships, they are able to more readily research, test, and verify:

  • Proof-of-concept testing of chosen solutions (including software/feature updates)
  • Network design requirements: application performance, AP density, client/AP compatibility
  • Industry best practices: security, density, scaling
  • Industry regulations and reporting requirements (PCI, HIPAA, SOX, etc.)
  • The latest technologies and market trends: product features, integration work and competitive landscape

These items are of significant benefit to an MSP’s customers.

Other MSP Advantages for the Midmarket

The customer doesn’t have to worry about on-going employee training or which vendor’s solution is best at any point in time.

Should the need arise to resize or reshape the network (special events, network expansion, etc.), an MSP can readily accommodate this need as part of their normal management process.

MSPs offer the customer an SLA based on the customer’s needs (and of course the MSP’s ability to offer such SLAs). SLAs could be focused around (but certainly not limited to) the following:

  • Network uptime
  • Network deployment time
  • Throughput per device
Get in the Game!

As you can see, MSPs have a bright future serving midmarket customers. I leave you with this cartoon – ”Suddenly, everybody attacked the mid market…”, – and so can you!

get-in-the-game-MSP

It is my belief that no other Wi-Fi manufacturer, aside from AirTight, better enables its channel partners to take advantage of this radical market shift, since AirTight has engineered its cloud Wi-Fi solution around MSP enablement from the beginning. Agree or disagree?

Managed Service, WiFi Access

Get in the Game with Wi-Fi Managed Services

November 12th, 2013

This is part 1 on our two-part MSP series. Part 1 focuses on the basics of the MSP delivery, while part 2 will discuss how to make this model work for you.

Nothing’s much has changed since I last blogged about Wi-Fi managed services almost a year ago, other than that I now work for a different manufacturer. The reason for the longer-than-expected ramp-up time is that Wi-Fi manufacturers (in general) haven’t yet adequately equipped their channel partners to take advantage of this market trend. The slow ramp-up is over, and it looks like it’s a land grab of epic proportion… starting… NOW.  For those of you waiting on the sidelines, it’s time to get in the game.

Market Drivers for MSPs

msp-datacenterAs the challenges of delivering high-performance wireless access networks in the face of exploding user demands become ever more daunting to the average IT guy, midmarket CIOs are still having a difficult time of adequately staffing their IT organization. Gartner and I both still believe that midmarket companies should consider using Managed Service Providers (MSPs) to solve this problem.

Engineers who are well-trained and experienced in designing, deploying, troubleshooting, and maintaining enterprise-class Wi-Fi networks are still fairly scarce and expensive. MSPs can offer high-end engineering skills, paired with economies of scale (leveraging shared resources), to midmarket customers who would otherwise have to hire their own expensive, dedicated engineers; the alternative being to try their luck with general IT installation contractors that may not have the right Wi-Fi expertise in-house or the ability to adequately support the installation once it’s done.

The decreased costs and lower risks of outsourcing to an MSP, in combination with attractive SLAs, may in many cases be a significant competitive advantage to midmarket organizations.

How is an MSP Different from a VAR?

If you’re unfamiliar with MSPs and how they differ from your garden-variety value-added reseller (VAR), I’ll briefly explain. Your local VAR will happily sell you a Wi-Fi network (making a little profit in the process), and their hope is to add services (hence the “value added” portion of the name) around the sale of the equipment. Those services could be anything along the lines of design, surveying, installation, configuration, optimization, maintenance, troubleshooting, reporting, and more. These services can be offered as prepaid (for a certain amount of man hours per month/quarter/year with additional time being paid hourly/daily) or it could all be an hourly/daily rate.

With managed services, you may still have the option of buying/owning the network hardware/software (called a capex sales model, short for “capital expenditure”), but there’s often the option of an opex sales model (short for “operational expenditure”, more commonly known as “leasing”) as well. The most common question that arises with the opex sales model is “who is doing the equipment financing?” More on that topic later.

The real differentiator offered by an MSPs is in the level of service provided. MSPs do everything for the customer throughout the lifetime of the network (as it relates to the service they are providing) while VARs most often perform tasks on an as-requested basis. MSPs therefore often provide the customer with a Service Level Agreement (SLA) contract stating exactly what they will/won’t do and what the adverse ramifications (to the MSP) of not performing those tasks (as stated in the contract) will be.

VARs MSPs
Scope design, installation, configuration, light helpdesk all of that plus full responsibility for on-going operation of the network, often including applications riding on top of it
Pricing Models primarily 1x costs (capex) with small (~10%) annual maintenance fee can also offer opex-only model, on per-user or per-network-node per month basis, as an alternative to capex + operational fee model
Guarantees typically commit to performance metrics at final acceptance of network install; maintaining network performance over time is customer’s responsibility offer service-level agreements (SLAs) for install time, network uptime, and possibly other performance metrics

MSPs will be managing, monitoring, and troubleshooting the network remotely (in the large majority of cases), they must choose technology solutions that lend themselves to this scenario.

How Can a Manufacturer Support You in this Model?

Manufacturers differentiate themselves in a number of ways:

  • Specializing on various aspects of the technology, such as performance, architecture, ease-of-use, or cloud services
  • Having a broad product portfolio: Wi-Fi, switches, firewalls, and routers
  • Offering varied sales models, from standard capex to 100 percent opex
  • Focusing on assembling solutions for vertical markets, rather than selling “horizontally” across various markets

Channel partners – distributors and resellers – are also looking for additional ways to differentiate above-and-beyond the manufacturer’s own technical or business-related advantages. Given the model’s inherent advantages, one valuable way to set themselves apart from the crowd is to additionally offer Wi-Fi as a managed service, either in a capex + service or even full-opex sales model.

  • In a capex model, the customer buys the equipment from the MSP and then additionally pays the MSP for their services (design, survey, install, integration, optimization, reporting, troubleshooting, etc.).
  • In the opex model, there are a variety of nuances of how an MSP might go about a sale, but most commonly, the APs are “leased” to the customer for a contract period (with periodic payments), and the customer is then charged for those same services (as previously mentioned) – either up-front or rolled into the periodic payments.

In part 2 of this post, we will discuss how to determine if a Wi-Fi solution is ready for the MSP model, how to get started, and how to sell the model to your customers. 

Managed Service, WiFi Access, WLAN networks