Traditional managed service providers are dead
The history of IT managed services traces back to the 1990s, marked by large-scale projects with extended planning cycles. Cloud has brought forward those traditional ways of managing this environment, without really evolving with clouds capabilities to differentiate and evolve.
2024-02-21
By Brandon Pierce, Managing Director, Engineering Services
IT managed services have a long and rich history. The traditional IT lifecycle was quite different from what we see today. Instead of the agile and iterative approach that we follow now, the projects were usually big and required a lot of planning. They were a part of the budgeting process for the annual capital expenditures, which involved long procurement cycles with space planning in the data center server farm.
The assets had a depreciation period of 3 to 5 years, and upgrades were often extended to maximize the return on investment and reduce additional expenses. This approach had its advantages, but it also had its downsides. One of the major challenges was to keep the environments up and running between these cycles. Performing routine maintenance, patching operating systems, adding new users, monitoring resource utilization, and alerting to issues that impacted performance or caused downtime were tasks that required attention 24x7x365.
In order to tackle this challenge, enterprises looked to offload these operational tasks to sever colocation providers and Managed Service Providers (MSPs) who had extensive knowledge and experience in maintaining the continuous and uninterrupted operations of the IT infrastructure and could do so, typically, for a much lower cost than maintaining a staff 24x7x365. MSPs were responsible for the upkeep and maintenance of IT environments in between cycles.
They aided in reducing capital expenditures and transformed them into operational expenditures.
Cloud Service Providers: The next phase of the managed services evolution
Fast forward 15 years as Cloud Service Providers (CSPs) came on to the scene. Initially, cloud Managed Service Providers (MSPs) were frontrunners in this field. They emphasized utilizing cloud technology to offer adaptable and scalable solutions to fulfill the demands of contemporary enterprises. This led to many organizations adopting cloud computing to overcome the challenges of traditional IT infrastructure. The cloud offered the promise of instant access to the resources required, eliminating the need for long procurement cycles and the over-provisioning of servers to plan for future growth. The utility billing model is also very appealing, as servers can be turned off when they are not needed, resulting in cost savings.
Now, as companies move into the second or third phase of their cloud journey, they are embracing DevOps and Platform Engineering principles to achieve optimal results. This means they are no longer waiting for 3-5 years to change their environment. Instead, they are continuously evolving and adapting to meet changing business demands.
CSPs are introducing new products and services to the market frequently. In some cases, enterprises are making changes to their code and cloud environments daily, and in high functioning teams, multiple times a day. As a result, clients need partners who can keep up with the pace of change, and who focus on "managing continuous change" rather than "managing the status quo." In this way, organizations can ensure that they are always leveraging the latest technology and innovations to stay ahead of their competition.
Traditional MSPs are becoming obsolete
Traditional MSPs have long been known for taking over their customers' IT operations by solving their “mess for less.” They have been primarily focused on ensuring the smooth recovery of the systems and resolving the problems as they arise. Despite the occasional lip-service to being proactive, the reality is that traditional MSPs have been waiting for monitoring alerts to come in and security vulnerability notifications to act upon. They are not focused on making their customers more agile or efficient. Instead, of working in partnership with their customers to design and deploy self-healing, autoscaling environments, they force their customers to adopt their rigid approach, which is designed for their own efficiency and dependency on them. It does not take into account the specific needs of each customer or drive them to become less dependant on the MSP.
As a consequence, many companies are now revolting against this traditional approach and opting to bring their IT operations back in-house. They are looking for more flexibility and customized solutions that can better meet their specific needs. Thus, Managed Services, as we have previously experienced, is now dead. The focus is now shifting towards more personalized and proactive approaches that can help companies optimize their IT operations and achieve their business goals more efficiently.
What’s Next? Introducing engineering services!
As traditional MSPs , businesses are left wondering about the alternative. This begs the question, “What is replacing Managed Services?” The answer is it is evolving, and Ollion – the born-in-the-cloud consultancy firm – is perfectly poised to lead this evolution. With our expertise, your business can thrive both in today and future.
Traditional MSPs and Engineering Services are two different approaches to dealing with various aspects of cloud computing. The primary distinctions between them are:
Scope and Focus
Traditional MSPs: Concentrate on the everyday operational aspects of managing and maintaining IT infrastructure and services in the cloud. This includes tasks such as monitoring, troubleshooting, patching, and ensuring the overall health and availability of systems.
Engineering Services: Focus on the continuous improvement and iterative advancement of the cloud's design, development, and implementation. This involves architecting, building, and continuously optimizing the infrastructure to meet specific business requirements.
Operational vs. Strategic
Traditional MSPs: Primarily operational in nature, ensuring the smooth functioning of existing cloud environments. The emphasis is on maintaining stability, security, and performance.
Engineering Services: Project-oriented and strategic by design, takes a partnership approach to understand your organizational goals, key performance indicators (KPI’s) and cloud initiatives and collaboratively develops a plan to accelerate your success. This may include implementing new technologies to improve your end user experience, helping development teams improve their velocity, or helping your operations team to implement a new business initiative.
Responsibilities
Traditional MSPs: Manage routine tasks like system monitoring, backup management, security updates, and incident response. The goal is to keep systems running efficiently.
Engineering Services: Include more proactive work, such as designing cloud architectures, implementing automation, optimizing performance, and integrating new technologies.
Skill Set
Traditional MSPs: Require skills in system administration, monitoring tools, security protocols, and incident management. Focus is on maintaining and troubleshooting existing systems.
Engineering Services: Demand skills in cloud architecture, automation, programming, and a deep understanding of various cloud services. The emphasis is on building and optimizing systems.
As your organization progresses and advances towards cloud technology, it is imperative to have a reliable partner who comprehends your business objectives and works in collaboration with you to accomplish them. At Ollion, we continually engage with our clients' business stakeholders to understand their requirements and help them in initiating innovative business ventures utilizing cloud technologies. Our primary focus is to be proactive and agile in our service delivery while taking a consultative approach to assist our clients in their ongoing transformation journey. By migrating from a traditional MSP to our Engineering Services, we enable our clients to receive exceptional value and elevate their business to new heights.
How do Ollion clients benefit from this new paradigm?
At Ollion, we pride ourselves on offering our clients increased flexibility in how they engage with our Service Delivery Teams and how they contract with us. We understand that each business is unique, and a one-size-fits-all approach simply doesn't work. That's why we have eliminated long-term lock-in contracts, the requirement for 24/7 support, and rigid RACIs. We believe in offering true flexibility, which allows you to continuously modify the scope of work and how you want us to engage with your development and operations teams. At Ollion, we become true partners with our clients, putting the power back into your hands and working together to achieve your business goals.
Stay tuned for our next blog where we’ll feature real world examples of how Ollion clients benefit from Engineering Services.