The MSP Model fails more often than not.
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@Breffni-Potter said in The MSP Model fails more often than not.:
@scottalanmiller ok. Name 1 MSP that is not a reseller?
NTG is not a reseller for anything.
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We did used to resell a few things:
Unitrends
Webroot
Offie365 -
@Breffni-Potter said in The MSP Model fails more often than not.:
- All of the issues that are prevented by external IT are actually magnified, networks & environments are not properly maintained because the true cost of delivering external IT the right way is so high that many providers skimp and cut corners.
Is this really true? It can be true, simply because it is easier for the business to decide to stop using the MSP. But the issue becomes not using the MSP. So, in fact, this shows how much the MSP model works. It is avoiding it that is the problem. There are three options, not two. But the issue you state here is not using an MSP instead of internal IT, it's not using either.
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The only thing we resell is our services.
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@Breffni-Potter said in The MSP Model fails more often than not.:
- When an external is brought in, Often it is a deliberate decision to save costs by removing the internal team afterwards. Regardless of competence, performance or anything else, the decision just boils down to money saved, not what delivers the best return on investment.
This may be true, but not something I see in the real world. I'm not sure I've actually ever seen this first hand as an MSP, but I've seen it from internal IT people that think it is happening. I'm not totally sure that I know any internal people that were replaced with an MSP, but I'm certain it happens. But commonly? I'm not sure about that. It's repeated as a fear a lot, but of the MSPs and internal people here (which is everyone), how many of you had an MSP brought in and then had them replace you OR were brought in as an MSP and you replaced the people that were already there?
As an MSP, we've done attrition fill ins often (replacing people who leave) but not replacing people who still work there. Sometimes it's to let someone working in IT to move into management or something else, but that's IT attrition even if not corporate attrition.
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@Breffni-Potter said in The MSP Model fails more often than not.:
Sadly, the majority of the market...this does not happen. Which is why if you are any kind of outsider looking in, you are going to be met with scepticism and resistance, purely because everyone else has done such a bad job before.
That's absolutely true. What companies need to weigh against is the alternative. Here is what I've seen:
- In absolute terms, the majority of IT is bad. Internal or MSP. This is the base from which we work.
- In relative terms, determining MSP value has to be done against internal IT of track record to track record.
- In comparing structures we have to remember that one good MSP can service thousands of clients, but internal IT is one to one. So even if you find 80% of MSPs are bad and 80% of internal IT is bad, the 20% of good MSPs can, in theory, handle 100% of companies where the 20% of good internal IT can only service 20% of them.
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@scottalanmiller said in The MSP Model fails more often than not.:
@Breffni-Potter said in The MSP Model fails more often than not.:
- When an external is brought in, Often it is a deliberate decision to save costs by removing the internal team afterwards. Regardless of competence, performance or anything else, the decision just boils down to money saved, not what delivers the best return on investment.
This may be true, but not something I see in the real world. I'm not sure I've actually ever seen this first hand as an MSP, but I've seen it from internal IT people that think it is happening. I'm not totally sure that I know any internal people that were replaced with an MSP, but I'm certain it happens. But commonly? I'm not sure about that. It's repeated as a fear a lot, but of the MSPs and internal people here (which is everyone), how many of you had an MSP brought in and then had them replace you OR were brought in as an MSP and you replaced the people that were already there?
As an MSP, we've done attrition fill ins often (replacing people who leave) but not replacing people who still work there. Sometimes it's to let someone working in IT to move into management or something else, but that's IT attrition even if not corporate attrition.
I had a friend who worked for a large AIX based company. The company hired IBM global services to take over all IT - that would make them a MSP right?, And then laid everyone off.
So I know it happens.
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As a non management person, I wonder how much the high costs of a good MSP with completely unknown billing potential versus the internal known costs plays a factor.
Now Scott will say that the single man shop is also completely unknown as well because that single person will likely need to hire out a ton of jobs because they don't have the skills themselves.... And while I understand why he says that... Reality is that small companies like mine rarely purchase outside support, instead they just suffer with whatever their internal can provide.
Of course these comments are limited to the fairly small sample size that I know of.
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@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Breffni-Potter said in The MSP Model fails more often than not.:
- When an external is brought in, Often it is a deliberate decision to save costs by removing the internal team afterwards. Regardless of competence, performance or anything else, the decision just boils down to money saved, not what delivers the best return on investment.
This may be true, but not something I see in the real world. I'm not sure I've actually ever seen this first hand as an MSP, but I've seen it from internal IT people that think it is happening. I'm not totally sure that I know any internal people that were replaced with an MSP, but I'm certain it happens. But commonly? I'm not sure about that. It's repeated as a fear a lot, but of the MSPs and internal people here (which is everyone), how many of you had an MSP brought in and then had them replace you OR were brought in as an MSP and you replaced the people that were already there?
As an MSP, we've done attrition fill ins often (replacing people who leave) but not replacing people who still work there. Sometimes it's to let someone working in IT to move into management or something else, but that's IT attrition even if not corporate attrition.
I had a friend who worked for a large AIX based company. The company hired IBM global services to take over all IT - that would make them a MSP right?, And then laid everyone off.
So I know it happens.
IGS did that to IBM proper as well. Then IBM had to hire shadow IT because IGS was incompetent.
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@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Breffni-Potter said in The MSP Model fails more often than not.:
- When an external is brought in, Often it is a deliberate decision to save costs by removing the internal team afterwards. Regardless of competence, performance or anything else, the decision just boils down to money saved, not what delivers the best return on investment.
This may be true, but not something I see in the real world. I'm not sure I've actually ever seen this first hand as an MSP, but I've seen it from internal IT people that think it is happening. I'm not totally sure that I know any internal people that were replaced with an MSP, but I'm certain it happens. But commonly? I'm not sure about that. It's repeated as a fear a lot, but of the MSPs and internal people here (which is everyone), how many of you had an MSP brought in and then had them replace you OR were brought in as an MSP and you replaced the people that were already there?
As an MSP, we've done attrition fill ins often (replacing people who leave) but not replacing people who still work there. Sometimes it's to let someone working in IT to move into management or something else, but that's IT attrition even if not corporate attrition.
I had a friend who worked for a large AIX based company. The company hired IBM global services to take over all IT - that would make them a MSP right?, And then laid everyone off.
So I know it happens.
So here is the big question.... was internal IT doing a good job? Because IGS is terrible. High cost, low competence. They are a joke inside of IBM. They are a VAR primarily, MSP is a tack on service. Hiring them violates the vendor rules.
It happens. We know it happens. But how often? IT people change jobs a lot. Even if every person in IT saw it happen to them once, would that be that often?
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@Dashrender said in The MSP Model fails more often than not.:
As a non management person, I wonder how much the high costs of a good MSP with completely unknown billing potential versus the internal known costs plays a factor.
Now Scott will say that the single man shop is also completely unknown as well because that single person will likely need to hire out a ton of jobs because they don't have the skills themselves.... And while I understand why he says that... Reality is that small companies like mine rarely purchase outside support, instead they just suffer with whatever their internal can provide.
Of course these comments are limited to the fairly small sample size that I know of.
You bring this up often. But what does "SMB rarely does this" have to do with what good practice is? That's like telling your driving instructor that turn signals might not be good advice because "so many people don't use them". What how does a lack of good practice affect what good looks like?
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@scottalanmiller said in The MSP Model fails more often than not.:
@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Breffni-Potter said in The MSP Model fails more often than not.:
- When an external is brought in, Often it is a deliberate decision to save costs by removing the internal team afterwards. Regardless of competence, performance or anything else, the decision just boils down to money saved, not what delivers the best return on investment.
This may be true, but not something I see in the real world. I'm not sure I've actually ever seen this first hand as an MSP, but I've seen it from internal IT people that think it is happening. I'm not totally sure that I know any internal people that were replaced with an MSP, but I'm certain it happens. But commonly? I'm not sure about that. It's repeated as a fear a lot, but of the MSPs and internal people here (which is everyone), how many of you had an MSP brought in and then had them replace you OR were brought in as an MSP and you replaced the people that were already there?
As an MSP, we've done attrition fill ins often (replacing people who leave) but not replacing people who still work there. Sometimes it's to let someone working in IT to move into management or something else, but that's IT attrition even if not corporate attrition.
I had a friend who worked for a large AIX based company. The company hired IBM global services to take over all IT - that would make them a MSP right?, And then laid everyone off.
So I know it happens.
So here is the big question.... was internal IT doing a good job? Because IGS is terrible. High cost, low competence. They are a joke inside of IBM. They are a VAR primarily, MSP is a tack on service. Hiring them violates the vendor rules.
It happens. We know it happens. But how often? IT people change jobs a lot. Even if every person in IT saw it happen to them once, would that be that often?
lol, well, I know a year later they fired IGS and rehired internal IT again.
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@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Breffni-Potter said in The MSP Model fails more often than not.:
- When an external is brought in, Often it is a deliberate decision to save costs by removing the internal team afterwards. Regardless of competence, performance or anything else, the decision just boils down to money saved, not what delivers the best return on investment.
This may be true, but not something I see in the real world. I'm not sure I've actually ever seen this first hand as an MSP, but I've seen it from internal IT people that think it is happening. I'm not totally sure that I know any internal people that were replaced with an MSP, but I'm certain it happens. But commonly? I'm not sure about that. It's repeated as a fear a lot, but of the MSPs and internal people here (which is everyone), how many of you had an MSP brought in and then had them replace you OR were brought in as an MSP and you replaced the people that were already there?
As an MSP, we've done attrition fill ins often (replacing people who leave) but not replacing people who still work there. Sometimes it's to let someone working in IT to move into management or something else, but that's IT attrition even if not corporate attrition.
I had a friend who worked for a large AIX based company. The company hired IBM global services to take over all IT - that would make them a MSP right?, And then laid everyone off.
So I know it happens.
So here is the big question.... was internal IT doing a good job? Because IGS is terrible. High cost, low competence. They are a joke inside of IBM. They are a VAR primarily, MSP is a tack on service. Hiring them violates the vendor rules.
It happens. We know it happens. But how often? IT people change jobs a lot. Even if every person in IT saw it happen to them once, would that be that often?
lol, well, I know a year later they fired IGS and rehired internal IT again.
That goes with hiring a VAR to replace IT. Sales people doing IT work, no way that that won't be a disaster. As examples go, this has a lot of points...
- It shows that IT jobs weren't lost to an outsourcer beyond a short period of time. IGS would use it as an example of internal IT replacing outsourced.
- Hiring a VAR is downright crazy, to run your IT.
- IGS has a terrible reputation, even their own company doesn't trust them!
It's not an example of MSPs doing anything, so misleading to include it here. But it is a good example of SMBs routinely confusing sales staff with IT staff. And that makes for a REALLY important point...
SMBs that don't have quality IT management at the top often cannot even identify what IT staff and IT companies look like! The important of having an MSP running IT is so much more dramatic when you talk about the SMB and are dealing with shops that have nearly zero capacity to hire, retain or even identify real IT or quality IT resources. Had there been a good MSP, or even good management, they would have known to protect the business from hiring a sales organization from an VAR to run their IT. The lack of MSP is easily a key reason that they made such a massive blunder. Of course, had they had excellent internal IT that would have protected them, too. Or if they had good management. But any of the three should have been enough to know how to go about having good IT in the first place.
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I've worked on both sides of the MSP. There are internal 1 man shops that are bad for the business, and there are MSPs that are bad for the business. For small companies, I think a good MSP is a good fit.
Lets say you have a 100 employee company and they have 1 in house IT person. On one end they could hire the shipping guy that has a real interest in IT. He might be able to take care of a lot of the daily needs, but the lack of experience means either he will need to bring consultants in, or spend a lot of time learning something he is only going to do once, or something in between. At the other end of the spectrum, they could have the IT Pro that really knows what he is doing and makes a lot of good decisions. Since there is only one IT person, the same guy that now knows how to build virtual servers is still plugging in keyboards.
That same 100 person company can hire a MSP for half the salary of the IT Pro and have better coverage. The lone IT Pro will take vacations and other things. The MSP has a depth of experience levels that allow them to still make money at that price because they have an entry level guy doing entry level tasks and the Pro is doing Pro level tasks all day long and not getting interrupted with password resets.
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Where I think that an MSP can work is as an additional resource for the internal IT department. We employ different IT companies to assist us, either when we don't have time to do the work ourselves, or where we lack the skills required for specific tasks and projects.
In most cases, I don't agree with the concept of replacing an internal IT department with an MSP, but utilising one (or more) to work alongside an IT department is great. You get the best of both worlds.
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@Mike-Davis said in The MSP Model fails more often than not.:
That same 100 person company can hire a MSP for half the salary of the IT Pro and have better coverage. The lone IT Pro will take vacations and other things. The MSP has a depth of experience levels that allow them to still make money at that price because they have an entry level guy doing entry level tasks and the Pro is doing Pro level tasks all day long and not getting interrupted with password resets.
This is one of the things that I find surprising - that people think that one 50/hr per week steady rate internal person will work when IT is generally "zero needs for a month" then suddenly "need ten people at once" and the day to day skills are very unlike the "something has gone wrong" skills. And the design skills are very unlike the management skills. Very few SMBs need even a single full time person, rarely even half of one. But even if they only need a tenth of one, they always need several different skills sets.
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@Carnival-Boy said in The MSP Model fails more often than not.:
Where I think that an MSP can work is as an additional resource for the internal IT department. We employ different IT companies to assist us, either when we don't have time to do the work ourselves, or where we lack the skills required for specific tasks and projects.
In most cases, I don't agree with the concept of replacing an internal IT department with an MSP, but utilising one (or more) to work alongside an IT department is great. You get the best of both worlds.
So what is the specific value of having an internal person in that (or any) case? You say the best of both worlds, but in all my years of IT, I've never seen any upside to internal IT (as a structure, the people themselves can be great.) The MSP can have the same on site presence, the same full time focus, more concern and ties to the business success... I'm not aware of any benefits to being paid by the business as an IT pro, only negatives. What benefits do you see from the payroll and management not being IT?
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What do you mean by an MSP has "more concern and ties to the business success...."? As an employee, my primary role is to make money for the business shareholders by adding value to the business. Similarly, an employee of an MSP's primary role is to make money for the MSP. So there is a conflict of interest here. It is in the MSP's interest to bill more, whilst the business will want to bill less. This conflict can be managed, but it requires skills and resources from the business to manage it - skills and resources which likely will not exist in an SMB.
I don't really see any benefits from not having an internal person in that (or any) case. In all my years of IT, I've never seen any upside to external IT (as a structure, the people themselves can be great). We're obviously poles apart in our experiences and so I doubt we'll ever agree.
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@Carnival-Boy said in The MSP Model fails more often than not.:
As an employee, my primary role is to make money for the business shareholders by adding value to the business. Similarly, an employee of an MSP's primary role is to make money for the MSP.
Sort of, in both cases the employee is just at a job. In both cases the ultimate task is to make money for the business, that's the MSP's job. So while the MSP has a little extra in the middle, the employee being there to look out for themselves while ultimately there to service the business (the customer) is the same in both cases.
Or another way....
An MSP is an employee of the business and the IT guy at the MSP is like the MSP's "hand". Whatever motivation that a normal employee has of a business, an MSP has for that business as well. An MSP is just like an employee there.
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@Carnival-Boy said in The MSP Model fails more often than not.:
. So there is a conflict of interest here. It is in the MSP's interest to bill more, whilst the business will want to bill less. This conflict can be managed, but it requires skills and resources from the business to manage it - skills and resources which likely will not exist in an SMB.
That's absolutely true. But what is missing is that the same conflicts exist with an in house IT department. To the business, in house IT and an MSP are identical (trust me, I've worked in non-IT management, to business people it's just one payroll or another, not an emotional or ethical tie like you feel from the IT side) - they are both external to the core business, both service organizations, both with the same conflicts of interest. Both suffer from wanting "more hours, better pay, to do less work" or whatever.
Internal IT can be capped to 40 hours a week to control this. So can an MSP. Anything you can use to control an employee you can with an MSP as well.
