MSPA: How did Do IT Smarter get started?
Do IT Smarter: Do IT Smarter was formed in 1999 when the three founders recognized a better way to provide network support to small and midsize businesses. When we first began we were a value-added reseller and did a lot of project work. However, within six months we had our first support plan in place and sold. Since then we have done a hybrid of both project work and recurring, proactive support contracts. A little over a year ago, we had an epiphany. We had learned so much about our business and the way you need to approach managed services. We thought it would have been great if someone was around to kind of help us along our way. We had to learn everything from trial and error. This thought led us to our current model. We decided to be the company that helps value-added resellers and solution providers transition to managed services. Managed services were really beginning to catch on, so we felt it was the right time and think we have a huge audience.
MSPA: What are some of the challenges facing the managed services industry today?
Do IT Smarter: There are a number of challenges facing the managed services industry. In regards to the SMB market, I think education is one of the biggest challenges. Not education among the tech world, but education of the model to small business owners. Larger organizations usually have at least one tech person on staff who may or may not understand managed services. That can work for you or work against you, depending upon how threatened that person may be. That is why education is such a challenge. You can only teach someone if they want to learn. Sometimes, people don’t want to learn. Sometimes, change is scary. Whether it is for the best or not.
MSPA: Other than recurring revenue and deeper margins, what are some of the lesser known benefits for companies to adopt the managed services business model?
Do IT Smarter: One of the greatest benefits of managed services is the deepness of your customer relationships. Done properly, managed services allow you to create a strong and trusting relationship. Because managed services are so behind the scenes, you have to frequently show them why they are paying you. Frequent and relevant communication deepens their trust and dependency. It also puts you in a better position to earn new project-based business.
When they need to upgrade or a project does come up, you can bet they are going to go to you first.
MSPA: In your opinion, what are some of the lesser known challenges companies face when adopting this model?
Do IT Smarter: I think one of the least anticipated challenges is the amount of time and commitment required to make this model work. So many things need to change, both mentally and physically, that I think people often forget that it takes time to switch from one method to another. But, once you get it set up, and begin to develop an install base, it gets easier.
MSPA: Are there any common characteristics you see across successful managed services companies?
Do IT Smarter: The successful managed services companies I have seen each really see the value of the model. They are specific to what they do. They know it isn’t glamorous, but they know the benefits. A lot of these companies have developed a rhythm that allows their company to see success and grow. These companies have learned to talk business benefits instead of taunting the technology. That is a huge key to successfully selling managed services.
MSPA: Are the consumers you talk to ready to hear the managed services message and are they ready to make that change in the way they manage their IT?
Do IT Smarter: Yes and no. Based on the feedback we get from our partners, it really depends on the size of the company. Smaller organizations that tend to be a little frugal can be reluctant to pay a monthly fee without really seeing the benefits. They usually stick with the break/fix solution unless things get so bad that the network doesn’t work anymore. That is when the model becomes justifiable to them. Amongst medium sized organizations and small organizations that aren’t as frugal, it is really mixed. I definitely think they “get it” more than they did a few years back.
MSPA: What trends do you see coming down the road that will affect the managed services industry?
Do IT Smarter: I think the most impact on the managed services industry will come for the telco companies.
We have been hearing about the convergence of data and voice for a long time. The major manufacturers of phone systems are becoming more like software-only companies every day. I think they will soon have their products running on industry-standard servers and handsets will become a commodity. This is forcing service providers within the telco industry to look for other sources of revenue. I see a major push by this vertical into the managed service industry. Only time will tell if the telecom industry can make the transition, but the marketing dollars they will pump into the industry will increase awareness and open up new opportunities for everyone.