Products
What is Managed Services?
Managed Services is a term that has been overused and misunderstood. Everyone seems to offer some type of “Managed Service", but ironically, Managed Services relies more on products (applications) than its services. Real managed services has incredible value, for instance, when technology malfunctions, the costs are far more significant than just the cost of the repair, the more important costs are related to lost productivity, recovering of work, or worse missing an opportunity. Perhaps we'll take a closer look at a few familiar scenarios below:
Okay, here’s the scenario. Suppose you have 30 workstations and a server. The average hourly wage is $18 for 30 folks. You pay your computer consultant $125 per hour. Now, your server runs out of space and your productivity is grinding to a halt, and the (reactive) call has been made to your knights in shining armor to save the day. Only, thing, it is going to take a few hours for them to arrive, and a few more hours time for them to make the corrections and hand you a bill. So, what are your options and the associated costs?
- The Old Standard – You Break it, They'll Fix it = $2,062
- Pay them a discounted amount upfront, and they'll fix it later = $1975
- The Ole Spot Check Trick = $1975
- The New Twist- You Break It and They Won't Come Fix It = $1930
- Your new choice: Prevent's LiveSuite + We'll monitor and fix it before it breaks = $475.50 and no downtime!
The Old Standard – You Break it, They'll Fix it
Let's look at an example. Suppose your company has 30 workstations and a server. The average pay is $18 per hour for each of your 30 employees. You pay your computer consultant $125 per hour when you call. Here's the problem. Your server has run out of disk space and it has caused it to stop responding. So you call the tech who is currently working on another job. He tells you he can be there in a few hours. He arrives on site and immediately figures out that you have run out of drive space. He frees some space up, but the server still isn't working correctly because other things were broken when the space filled up. Seeing this, the tech immediately starts repairing the server. After two hours he is done. Hurray! Everyone back to work. He hands you a bill for two hours labor and a half hour traveling time - $312.50. So what did this outage really cost you? Let's take a look.
| Technicians Repair Time | $250.00 | |
| Technicians Travel Time | $62.50 | |
| 30 employees idle for 3 hours | $1620.00 | |
| Taxes paid for those employees | $130.00 | |
| Total loss from your 3 hour failure | $2062.50 |
What this means is that, even though the technician's bill was only $312.50, your actual loss was over $2000. The hidden cost of the failure dwarfs the actual bill for the repair. Also, you are still almost out of space on your drive. Sounds like the same old rut - thinking inside the box. So how do you prevent these high losses? Before we answer that, let's look at what some other “Managed Service Companies” are doing.
Pay them a discounted amount upfront, and they'll fix it later
Some businesses sell you some hours and tell you to call them when there is a problem. When there is a failure, you make a call to the “Managed Services Company” and your people are getting paid while they wait for the tech to arrive. How is this different than simply calling a tech when something breaks? You still paid for the tech's time, paid your people while they stood around, paid the tech to travel to your site and lost the productivity that your employees would have had or, worse yet, lost sales or customers. Sounds like business as usual. The math works out like this:
| Technicians Repair Time | $180.00 | |
| Technicians Travel Time | $45.00 | |
| 30 employees idle for 3 hours | $1620.00 | |
| Taxes paid for those employees | $130.00 | |
| Total loss from your 3 hour failure | $1975.00 |
Not much in the way of savings and you are still almost out of space on your drive.
Some other “Managed Services Firms” get a little closer to the mark. They sell you a service contract and have a tech visit once a month to check for troubles. Hopefully you only have troubles when the tech arrives. Otherwise you will have a failure, call the tech and wait for the tech while your people stand around and so on. One other issue with this approach is that the technician that visits your site can't possibly check all the computers, all the logs, all the drives, look for virus and spyware troubles and all the other tasks that need done on a regular basis. While this is better, it still is not sufficient. Let's look at the same failure scenario. Assuming that the hard drive on your server fills up between the tech's scheduled visits - which is likely since he appears only once a month. The losses add up as follows :
| Technicians Repair Time | $180.00 | |
| Technicians Travel Time | $45.00 | |
| 30 employees idle for 3 hours | $1620.00 | |
| Taxes paid for those employees | $130.00 | |
| Total loss from your 3 hour failure | $1975.00 |
No real savings to be had. Guess the charge for the “Managed Services” didn't help much and you are still almost out of space on your drive. Let's take a look at a different offering that we often see.
The New Twist- You Break It and They Won't Come Fix It
The sales pitch is you will never have to pay a tech to come out and you will get a reduced rate on labor. This is true, but does that really help you? You will still have the failure, call the tech, pay your people to stand around while the tech logs in a tries to figure out and fix the issue and so on. The only money you saved was not paying the tech to drive out, but that was most likely offset by the “Managed Services Fee”. Once again, here are the numbers:
| Technicians Repair Time | $180.00 | |
| Technicians Travel Time | $0.00 | |
| 30 employees idle for 3 hours | $1620.00 | |
| Taxes paid for those employees | $130.00 | |
| Total loss from your 3 hour failure | $1930.00 |
Where are the savings? Don't you still have that drive space problem? In all of these situations most of the real cost is coming from the loss of productivity. Reducing that cost is what you NEED to focus on, not reducing the technician's bill. It's time to start thinking outside the box. A recent Gartner study found the following:
- The cost of an unmanaged XP machine over 3 years was an average of $5309
- The cost of a managed machine over 3 years was an average of $3335
- The cost savings of a managed machine over 3 years was on average $1974
If you have 20 computers running Windows XP in your business, that is a cost savings of nearly $40,000 in a 3 year period.
*As reported in Network Computing Magazine, Page 34, 9/2/2004 issue.
Your new choice: Prevent's LiveSuite + We'll monitor and fix it before it breaks
Prevent's LiveSuite Managed Services Applications monitor and repair other machines without human intervention. Some call these “self-healing” machines. This is what LiveSuite was designed to do. Prevent's LiveSuite monitors your systems 24 hours a day, 7 days a week looking for any sign of trouble. It checks application logs, security logs, virus logs, monitors disk space, checks drive health, checks hardware statistics, looks for new or missing applications and much more. Then LiveSuite automatically applies needed patches and, if it can't automatically resolve an issue, it notifies one of our technicians. It is continuous monitoring and management of your IT needs. Now that's thinking outside of the box. So, does it really work? Let's look at the same situation from above.
How does this sound? Your server is starting to get full and one of our technicians is notified by Prevent's LiveSuite. He logs in and cleans up temporary files. The next week the system alerts our technicians that your server only has 20% of its c: drive free. The technician calls you to discuss the problem. It is decided that you need more drive space. We order a new hard drive and arrive at a scheduled time when your employees aren't working. We add the drive and expand the space. Once again, let's look at the numbers.
| Technicians Repair Time | $300.00 | |
| Technicians Travel Time | $37.50 | |
| New Hard Drive | $120.00 | |
| 30 employees not interrupted | $0.00 | |
| Taxes paid for those employees | $0.00 | |
| Total cost to PREVENT the failure | $457.50 |
Now we see the savings. Preventing the problems before they occur is what REAL Managed Services is all about. Also, we no longer have the drive space issue which means this isn't going to happen again next month. Isn't it time you received the IT service that you deserve? Isn't it time that you control your technology budget? We think so and that is why we built LiveSuite. It is available in several support plans tailored to meet your needs and your budget.