Do You Need To Outsource Your NOC?
Over the last 20 years, only a small handful of credible companies have offered NOC or help desk solutions to MSPs. Yet, there is a lot of discussion around NOC solutions for MSPs, and MSPs need to understand why. There are specific times throughout an MSPs life when outsourcing NOC services to another MSP maybe both plausible but also wise. Let’s look at when those times may occur and when MSPs should NOT outsource something as mission-critical as a NOC.
History of Outsourced NOC
Speaking only of NOC solutions to other MSPs and not to end-users, this business model, sometimes called “Master MSP,” has its origins in the vendor community. That’s right. Vendors were among the first to organize and deliver outsourced NOC services to MSPs. These were “outsourced” arrangements themselves (the vendor didn’t actually own the NOC, they just contracted with another MSP to sell those services to other MSPs). The reason should come as no surprise; vendors wanted to encourage the adoption of managed services. For smaller MSPs who didn’t have the resources or need to build a 24/7 staffed NOC, outsourcing made a lot of sense. Plus, it helped the vendor sell their goods.
Now that we know where the outsourced NOC model comes from, we can now examine scenarios where MSPs would want to utilize them. We’ll look at some of the downsides as well.
When NOC Outsourcing is Smart
When should you look at handing over your NOC strategy to another company?
- New MSPs: When a new company or division offers a managed service, creating a NOC or help desk can be an expensive endeavor. If your new MSP offering has a legitimate need for a NOC and you can’t cost-justify its creation, outsourcing might be the right solution.
- High Growth – There are periods of high growth within a company where the draw on resources can be challenging. I have even seen MSPs with existing NOC capabilities outsource to another MSP solely to achieve true 24/7 coverage.
- Non-Core Offerings – It is also entirely possible to have a set of service offerings that do not require a NOC as an MSP. Yet, having a NOC as a “nice to have” feature seems appealing. In this scenario, leveraging an outsourced NOC can be a great decision.
When NOC Outsourcing Is Dangerous
Please note: all the previous scenarios where outsourcing your NOC is mentioned, how this outsourcing is accomplished, and whether it is successful is all in the details. There are many situations where outsourcing something as vital to an MSP’s business model can be challenging and damaging to the MSP if done improperly.
- No Defined Procedures: If you outsource your NOC without having any service delivery procedures in place, you cannot expect this relationship to magically solve anything. Outsourcing a NOC with no pre-defined policies or procedures can often do significant damage to an MSP’s reputation with its customers. You want your NOC partner to fit into your business model, not the other way around.
- Regulated or Sensitive Markets – If you service banking, financial services, health care, legal, or other customers with regulatory or unique transparency requirements, outsourcing a NOC must be done carefully. I’m not saying it cannot be done, but any situation where an MSP is itself outsourcing to a 3rd party will come under increasing scrutiny moving forward. If this is a practice you use, then the same transparency and risk mitigation policies your customers employ must also be used by the MSP on the outsourced party.
- Unknown NOC – I have seen several situations where an outsourced NOC solution is not delivered by the company but by another organization. So, follow me here. MSP decides to use a 3rd party NOC. The 3rd party NOC does not provide the solution but instead white labels the NOC services from a separate provider. Yeah, this is actually happening! Be careful and ask questions. If you don’t get answers you are comfortable with then maybe you should reconsider your options.
There are plenty of good reasons why you should have a NOC. There are even some good reasons for outsourcing your NOC. But, if you decide to outsource, be smart about it and do it intelligently. If you choose to do it yourself, that’s fine as well. There are plenty of MSPs who have developed their own NOC, and it works just fine.