Soup to Nuts Guide

7/31/2019 Soup to Nuts Guide

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How to Setup a Managed

Servic es Business

A soup-to-nuts guide for aspiring MSPs.

Dev Anand

ZOHO Corp.



If you are a VAR or a system integrator thinking of starting your

own managed services business, then this book is for you. Get

the complete picture of how to register your business & manage

federal procedures, raise working capital, cut costs on operations,

win customers, and run a successful MSP business. Understand what

works and what doesn’t from the case studies and best practices

compiled from hundreds of successful managed service providers.

Dev Anand

ZOHO Corp.



From the authorAs the number of SMBs increase every day, the demand for managed

service providers who could offer vital IT services at a fixed and

inexpensive price point also increase. This is a great opportunity

for existing VARs, System Integrators, and IT Consultants to start a

managed services business.

In an effort to make this transformation smooth we present you this

book - soups to nuts guide to starting an MSP business. It will give youthe current trend in managed services, the sweet spot for startups,

steps to register your business, plan your finances, and run an effective

MSP business. We have interviewed lot of our existing customers and

have compiled the best practices such as how to win new customers,

why you should sell virtualization and power management, taking

note of newer technologies such as Amazon Web Services and Saas

based office tools etc.

We sincerely thank our customers and partners who helped us inmaking this guide a more effective one by sharing their views and

data. We would love to know your views, send them to devanand@

zohocorp.com or [email protected].





v

Table of Contents

CHAPTER 01 Overview

at s anage erv ces 1

Current trend in Managed Services 1

Who should become an MSP?

y o s ave a etter c ance o success SME Managed Services to boom in next five years (2009 - 2013)

Managed Services Market Survey . . . . . . . . . . . . . . . . . . . . . . .

at are t e c ances o sma s surv v ng compet t on

CHAPTER 02 Before getting started – Identify your market first

Start small Think local

ou e c ec your c o ce

Get the list ready

Generate leads online

CHAPTER 03 Identify what they need (what services can you offer them?)

Know what (services) your customers need 11

Sample 1

ase stu a ys roup anag ng an s w t enter us

CHAPTER 04 Getting Started. Register your business first.

Checklist for registering a business 1

tep 1: e ect ng an appropr ate us ness structure

Step 2: Registering your business 1

On line registration 1tep : ta n ng mp oyer ent cat on um er (

Step 4: Choosing your tax year 1

ort ax ear 1

ot n x stence nt re ear 17

Step 5: Choosing your accounting method 1

tep : u m tt ng orms - an - e y your emp oyees



vi

Table of Contents

CHAPTER 05 Finances

Plan your finances 1

Salary 1

t er ro es an respons t es n a typ ca rgan zat on

on-salary components ease

perat ons

ardware

o tware

Marketing

Cost of running a 5 member organization

o s ow on r ng …

Raising working capital

CHAPTER 06 Operationsan or your operat ons

Reducing internal operations headache

Reducing external operations headache

enter us ar et ace

Case stud : mart

CHAPTER 07 Legal

ega ocuments

CHAPTER 08 How to migrate from VAR to managed services? WAR on the VARs

The most compelling reason for change

anag ng c ange

CHAPTER 09 Winning new customers

There ain’t no such thing as a FREE LUNCH

wo t ngs t ey want you to ta a out

1: Show them savings

a arycom

2: Tell them they can mind their own business now

CHAPTER 10 Virtualization sells. Sell Virtualization.

What is virtualization?

ow v rtua zat on e ps your customers

Top 7 virtualization benefits that you can sell to your customers:

ow muc t ey can save 1

Case study: Cornerstone IT

Server Virtualization solutions



vii

Table of Contents

CHAPTER 11 Advocate power management – Go green

What is power management?

Why should you practice power management?

ow muc can you save

Power management in Windows Tools that automate Windows power management

CHAPTER 12 Package your pricing

Importance of pricing

Basic pricing models

ac age t e pr c ng

CHAPTER 13 Build a service catalog, it helps

What is a service catalog? 1

erv ce cata og n 1Sample service catalog as viewed by your end users

Internal view of your service catalog

CHAPTER 14 Build a remote backup service offering. Try Amazon S3.

wo reasons w y you s ou o er remote ac up

In-house backup Vs remote backup

ow to u a remote ac up serv ce o er ng

Backup vendors

Case study: NetStandard, Inc

mazon S3 adoption is growing

ow it works?

r c n g

CHAPTER 15 Reducing Hosting Cost with Amazon

Key Components in Amazon Web Services

ow wor s

nstance pt ons

r c ng

How EBS works 7lastic IP Address – for redundancy

ata rans er: ccess ng

How Amazon EC2 differs from Traditional Data Centers

AWS Console and Elastic Fox

ost ng enter us on mazon ou

Steps to run MSP Center Plus on Amazon EC2 + EBS

teps to run +



viii

Table of Contents

Steps to restore your installation if MSP Center machine crashes

teps to run enter us on mazon + +

Steps to backup your EBS data to S3 7

Steps to restore your S3 snapshot into EBS

CHAPTER 16 Make friends with SAAS. Resell Google Apps / Zoho

ourney o messag ng an co a orat on too s

Google Apps

ene t o

Zoho Apps

Google Vs Zoho 1

CHAPTER 17 How to retain customers?

top t e ea y uc et mo e

our reasons why customers switch managed service providers ustomer survey – a great too to reta n customers

Automated customer survey

CHAPTER 18 How to build a motivated team?

ng e essent a ngre ent

Case study: What a young and motivated team can do?

Setup a test lab for your engineers to try new things

CHAPTER 19 Which is better? Hosted or In-house?

oste or n- ouse

CHAPTER 20 Which is better? Multiple tools or integrated tool?

Disparate tools Vs Integrated MSP Platform 1

ntegrat on s t e way to go



2

What is managed services

Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a

better chance of success

SME managed services to

boom in next five years

What are the chances of

small MSP surviving the

competition

1

Overview

What is Managed Services?

According to Wikipedia, “Managed Services is the

practice of transferring day-to-day related management

responsibility as a strategic method for improved

effective and efficient operations. The person or

organization that owns or has direct oversight of the

organization or system being managed is referred to as

the client or customer. The person or organization that

accepts and provides the managed service is regarded as

the Managed Service Provider.”

Current trend in Managed Services

Today, managed services are offered to everyone right

from common man to large enterprises. If you buy a

Dell Inspiron laptop or a Dell Vostro desktop you get

1 year of online backup for free. Also Dell offers remote

troubleshooting as a service for a fixed price.

What is Managed

Services?

Current trend in Managed

Services

Who should become

an MSP?

Why do MSPs have a better

chance of success?

SME Managed Services

to boom in next five years

(2009 - 2013)


small MSPs surviving

competition?





How to setup a managed services business

3

Also by centralizing the operations MSP actually shares the cost of the software/tools across anumber of customers and manages a very low cost-per-device compared to an individual business

owner who has to do all by him. So in short when a business owner finds it difficult to manage

IT at $400–$500 per device per month, a smart and efficient MSP could do it for $100–$150 per

month making it a win-win situation.

SME Managed Services to boom in next five years (2009 - 2013)

Industrial reports suggest that SMB managed services market is very wide open now when

compared to that large enterprises. Ranging from all leading MSPs to VARs, all are eying

SMB managed services market as their next big growth opportunity. SMBs, industries of 20to 99 employees, managed services market have the potential to reach $1.6 billion by 2013.

The US SMB IT managed services market alone grows to $4.3 billion by 2013. It’s really a huge

market to chase.



Overview

4

Small industries and large enterprises are not so great for offering managed services because

they either lack budget or have resources to do it in-house. The best bet to pitch managed

services is to businesses with 20–99 employees because they form the largest population of

businesses who are tight in budget as well as dependent on IT.

Managed Services Market Survey

good potential to grow in the coming years. Majority of the MSPs who participated in the survey,

elieved that in 2009 their revenues will increase by 25% on an average. This was on the average 28%

operating pro it margins t e s anticipate in . e projecte growt rate o manage

services usiness was , accor ing to t e survey. A so majority o t e s sai t at t ey ave ma e

heir revenues by focusing on a single industry. The most popular industry for MSPs was Financial services

(37%) followed by health care (36%), professional services (30%) etc in 2008. In 2009, it was Manufac-

uring (78%) followed by government/educational/non-profit (52%), health care (42%) etc.

ccording to the survey, pricing techniques, services offered, understanding customer needs etc.

(discussed at later part of the guide) are the key factors that were responsible for their success.




5

ccording to the survey, pricing techniques, services offered, understanding customer needs etc.

(discussed at later part of the guide) are the key factors that are responsible for their success.

37%

0

10

20

30

40

50

60

70

80

90

34% 36%45%

30%37%

27%

78%

24%

52%

F i n a

n c i a l

S e r v i c

e s

H e a l t h

C a r e

P

r o f e s s i o n

a l S e

r v i c e

s

M a n

u f a c t u

r i n g

G o v e r n m

e n t / n

o n p r

o f i t / e

d u c a

. . .

Popular Indust r y ty pes for MSPs

2008 2009

What are the chances of small MSPs surviving competition?

Managed services business is still very much a regional game. If you offer enough value to your

customers it is unlikely that a national player would eat into your business simply because a localplayer can be quick as well as cost-effective. It’s no different than the situation below. Guess who

would you call? Obviously Joe, right? You might buy a car that is made in any part of the globe

but when it comes to service, and especially break-fix, proximity plays a big role.





2


Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a






competition

Before you get

started – Identify your

target market first

Start small. Think local.

Today some businesses have a global oot print But none

o them were started that way Invariably everyone started

as a small local business with a very small ootprint That’s

exactly how you should be starting your MSP journey

too So, irst deine your geographic coverage o your

business Are you going to be the new MSP o Orlando

or New York?

It’s important to start local because it’s easy to serve

10 customers in one city than hal o them in multi-cities

Costs incurred in meeting them or winning a new busi-

ness and onsite visits would work out cheaper with local

customers in the long run Moreover at the initial stages

o starting a business you should spend a lot o time on

meeting customers than travelling

2

Start small. Think local

Double check your choice

Get the list ready



Before you get started – Identify your target market rst

8

Double check your choice

Don’t just start a business in a city X just because you live there Double check i the city/

state has enough number o small and medium businesses matching your target customer proile

The best way to go about doing this is get the published data on government websites/journals

The bar graph below shows the number o businesses in each US state

Get the list readyOnce you have deined your desired ootprint start building the list o such potential businesses

There are many ways to get this done

1. Go to the local chamber o commerce in your region and get the list o registered businesses

2. Gather public inormation through Google local

3. Explore associations or verticals such as inance, auto, healthcare in your regionand pick up businesses

4. Rent lists rom direct marketing organizations5. Participate in industry speciic trade shows and meet people

6. Mine data rom your old businesses to see i any potential businesses

7. Get the sales leads rom online Business Sales Leads providers

The list you collect will serve as a master database o people you need to contact in this new

business You can maintain this list in a sophisticated CRM or a contact management tool which

you would urther use or campaigns or you can simply have them in an excel sheet or reerence




9

Generate leads online

A simple and quick way to generate leads is through online leads vendors (see list below)

Just open an account with any o these vendors and start marketing your services You can get the

leads list sliced-and-diced matching your target customer proile For example you can get the list o

leads in Caliornia, within SFO, with employees ranging rom 100–200 and speciic to an industry

with a certain revenue range

Online leads vendors Price

ead 411

lead411comStarts rom 29 mont

o ea s

www goleadscomStarts rom 995/month

n o

n ousaContact the vendor

apdata

www zap ataContact the vendor

astcoe Databases

eastcoedatabasescomStarts rom 99 mont

e op ea op

thetopleadshopcomStarts rom 17/month



Before you get started – Identify your target market rst

10

Some o these tools provide an inbuilt CRM so that you can send emails to the target customers

right rom the website without having to install your own contact management or customer

relationship sotware such as ACT Companies such as Goleadscom oer a ree search which

gives you the count o the search you do (not the lead list but the total count o leads matching

your search criteria) which could be good trial beore you pay or any o these tools



2


Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a






competition

Identify what they

need (what services

can you offer)

Know what (services) your customers need

Businesses require dierent kinds o services depending on

their IT inrastructure For example a design house with

50 employees would require basic desktop management

whereas a bank with 100 employees would require special

security services, server management, and application

management The diagram below depicts the services

required against some o the critical IT components

It’s quite natural that each customer has dierent

requirements First understand the IT requirements o

a customer like what services he/she requires whether

3

Know what (services) your

customers need



Identify what they need (what services can you offer)

12

server monitoring, security management, asset management and what type o monitoring

required whether 24/7, 24/5 or 12/5 etc, Also understand i he wants to have SLAs and i so

what type o SLA whether availability SLA (uptime), perormance SLA (packet loss & latency) or

helpdesk SLA (response time in replying to the tickets) Ater understanding these requirements

provide your customers the optimum servicesBy providing the services that do not meet the demands o a customer drags you rom

identiying the ault in his/her IT and in such cases chances are more or the customer to quit

your service For instance, i ABC Corp wants to manage their IT, irst take a blue print o their

IT and identiy how many servers, desktops, routers etc, are available Then decide on what

services to oer and what type o monitoring is required

Sample

For example let’s assume that ABC Corporation operates in your region with 132 employees

The services that they require are shown below

SELLINGCase study AaSys Group. Managing 75 Banks with MSP Center Plus

AaSys Group is a leading managed service provider in Florida. They have

been using MSP Center Plus to manage more than 75 banks in and around

Florida region.

AaSys’ services include everything from consulting, networking, to maintenance

for banking organizations. As part of their network services, AaSys manages

t e server in rastructure across t ese an s t at run to t ousan s o servers

and infrastructure devices.

gue a utze AaSys Group, Inc wwwaasysgroupcom



2


Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a






competition

Get Started. Register

your business first.

I you already have registered your company you may

skip this section…

Checklist for registering a business

Selecting an appropriate business structure

Registering your business

Getting your EIN

Choosing a tax year

Choosing your accounting method

Submitting the orm I-9 and W-4 illed out by

your employees

4

Checklist for

registering a business

Selecting an appropriate

business structure

Registering your business

Obtaining Employer

Identification Number (EIN)

Choosing your tax year

Choosing your accounting

method

Submitting forms I-9 and

W-4 filled by your

employees






15

On line registration

Another easy way o registering your business is through online incorporation service providers

You can directly log in to their website and ill your details and get your business registered

Some o the available online incorporation service provides and their charges are given in theollowing table



Get Started. Register your business rst.

16

Step 3: Obtaining Employer Identification Number (EIN)

Ater registering your business obtain an Employer Identiication Number (EIN) An EIN is a

unique nine digit number issued by Internal Revenue System (IRS) to the business corporations or

tax purposes EIN is also known as the Tax Identiication Number (TIN), Federal Employer Identi-

ication Number (FEIN) or Federal Tax Identiication Number (FTIN) When the nine digit num-

ber is used or identiication rather than employment tax reporting, it is usually reerred to as a TIN,

and when used or the purposes o reporting employment taxes, it is usually reerred to as an EIN

To obtain an EIN go to the ollowing link https://sawww4irsgov/modiein/individual/index

jsp and ill the application Ater all validations are done you will get your EIN immediately upon

completion This application will be available during the ollowing hours:

Monday - Friday: 6:00 am to 12:30 am Eastern time

Saturday: 6:00 am to 9:00 pm Eastern time

Sunday: 7:00 pm to 12:00 am Eastern time

Step 4: Choosing your tax year

You must igure your taxable income on the basis o a tax year and ile an income tax return

A “tax year” is an annual accounting period or keeping records and reporting income and expenses

An annual accounting period does not include a short tax year The tax years you can use are:

Calendar year - A calendar tax year is 12 consecutive months beginning January 1 and

ending December 31

Fisca year - A iscal tax year is 12 consecutive months ending on the last day o any

month except December A 52–53-week tax year is a iscal tax year that varies rom 52 to

53 weeks but does not have to end on the last day o a month

Online Incorporation Service Provider Charges

ncorporate ast

wwwincorporateast com

Registration price varies according

to the state 165 or processing and

reg strat on n or aFlorida Incorporation Service

or a ncorporat onserv ce com72 or reg strat on (on y n or a

y ew enture

wwwmynewven urecom

159 or processing + state iling ee

(For iling in Florida 159+ 80)

Incorporate Time

ncorporatet mecom

Registration price varies according to the

s a e 160 or processing and registration

in Florida




17

Unless you have a required tax year, you adopt a tax year by iling your irst income tax return

using that tax year A required tax year is a tax year required under the Internal Revenue Code and the

Income Tax Regulations You have not adopted a tax year i you merely did any o the ollowing

Filed an application or an extension o time to ile an income tax return

Filed an application or an employer identiication number

Paid estimated taxes or that tax year

I you ile your irst tax return using the calendar tax year and you later begin business as a sole

proprietor, become a partner in a partnership, or become a shareholder in an S corporation, you

must continue to use the calendar year unless you get IRS approval to change it or are otherwise

allowed to change it without IRS approval

Generally, anyone can adopt the calendar year However, i any o the ollowing apply, you

must adopt the calendar year

You keep no books or records;

You have no annual accounting period;

Your present tax year does not qualiy as a iscal year; or

You are required to use a calendar year by a provision o the Internal Revenue Code or

the Income Tax Regulations

Short Tax Year

A short tax year is a tax year o less than 12 months A short period tax return may be required

when you (as a taxable entity):

Are not in existence or an entire tax year, or

Change your accounting period

Tax on a short period tax return is igured dierently or each situation

Not in Existence Entire Year

Even i you (a taxable entity) were not in existence or the entire year, a tax return is required

or the time you were in existence Requirements or iling the return and iguring the tax are

generally the same as the requirements or a return or a ull tax year (12 months) ending on

the last day o the short tax year

Step 5: Choosing your accounting method

Each taxpayer (business or individual) must igure taxable income on an annual accounting period

called a tax year The calendar year is the most common tax year Other tax years are a iscal year

and a short tax year

Each taxpayer must also use a consistent accounting method, which is a set o rules or deter-

mining when to report income and expenses The most commonly used accounting methods are



Get Started. Register your business rst.

18

Form W-4 is a ederal tax orm is required by IRS and must be illed out by new employees

beore they receive their irst paycheck Filers must indicate the number o personal allowances

they are taking, including dependents, to determine how much money will be withheld or payroll

taxes To download the orm, visit the ollowing URL http://wwwirsgov/pub/irs-pd/w4pd

the cash method and an accrual method Under the cash method, you generally report income

in the tax year you receive it and deduct expenses in the tax year you pay them Under an accrual

method, you generally report income in the tax year you earn it, regardless o when payment is

received, and deduct expenses in the tax year you incur them, regardless o when payment is made

Step 6: Submitting forms I-9 and W-4 filled by your employees

The Employment Eligibility Veriication Form I-9 is a US Citizenship and Immigration Services

orm It is used by an employer to veriy an employee’s identity and to establish that the worker is

eligible to accept employment in the United States The United States government requires that

all employees and employers attest to employee eligibility to work by illing out and maintaining

a Form I-9 or each employee To download the orm, visit the ollowing URL http://wwwuscis

gov/iles/orm/I-9pd




19





2


Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a






competition

Finances

Plan your finances

While running your business you would be spending

majority o your money on people, acility, hardware,and sotware Some o the major components that you

would have to account or while planning your inances

are given below

Salary

Salaries range rom $50k to $70k per year or a typical

MSP technician in Florida

5

Plan your finances

Cost of running a

5 member organization




Finances

22




23

Other roles and responsibilities in a typical MSP Organization

Role Activities

Sales & Marketing team

Makes cold calls

Generates leads

oses sa es

ccount anager

ng e po nt o contact w t t e customer

Comprehensive knowledge on all the services that you oer

Prices o the services oered

nsures a t e necessary contract, ocuments are rece ve

rom the customers

nsures whether the bills are sent properly and the customer

pays t em n t meConducting meetings to discuss and solve customer issues on

contract, s etc

ng neers

Perorm Root Cause Analysis (RCA) on the customer issues

ang ng etwor con gurat ons accor ng to c ent ssues

Perorm Core hardware and sotware upgrades

Upgrading Switches, Routers OS

ep oy ng cr t ca patc es

Taking Periodical backups

Client Services

rov e support to c ents on a aspects o account administration and client support

Preparing all the necessary documents or the customer’s

account esta s ment an ma ntenance

nsure whether right services are provided

elpdesk

Attends the customer requests, via voice or mail

Provides solutions to the customers

ss gns t c ets to perat ons support or ana ys s

perat ons support

Works on the tickets raised

na yses t e customer’s ev ces remote y ixes the issues

a ses erv ce equest, or ons te v s ts

ec n c ans

tten s t e serv ce requests

Goes onsite or replacing hardware, changing network

connect ons etc

a ses mes eets or ons te c a ms



Finances

24

Non-salary components

Typically the non-salary components such as insurance, 401k etc account to $10,000 per employee

per year

Lease Lease rates vary rom state to state The average lease rate is around $5–$10 per square

eet per month

Operations

Operations include telephones, internet, power, housekeeping, stationary, ood etc For a typical

small business the cost o operations would be around $5000 per employee per month

Hardware

Hardware includes the equipments required to run business such as computers, servers, networkinggears, and telephones On an average it would cost around $2000 per employee (onetime) or

setting up the hardware

Software

Go through the below table to know the various tools that are available in the market, what solution

they provide and how much do they cost

Software Solution offered Price

MSP Center Plusmspcenterp us

Integrated MSP Platorm 25 device/year

OpManager OnDemand

on emanHosted monitoring tool Contact the vendor

aseya

www kaseyacomDesktop/Server management 120 device

Microsot system center

m croso tcom systemcenterDesktop management Contact the vendor

onnect seconnectw se

Proessional Serviceutomat on (

Contact the vendor

-able

n-a ecomNetwork monitoring $99 user/month

enith

zenithinotechcomes top management ontact t e ven or

(Continue)




25

Solarwinds

solarwindscometwor mon tor ng 2475 - 100 devices/year

Whatsup Gold whatsupgoldcom

Server and applicationmon tor ng

65 device/year

Autotask

autotaskcom

Proessional Service

utomat on (

275 - 5users/month

55 additional user/month

Dell EverDream

ever reamcomes top management ontact t e ven or

og e n

ogme nRemote control 6995 device/year

cr pt og cscr pt og c

Desktop management 2379 device/year

o to my

www go omypccomRemote control 1495 device/month

www realvnc comRemote control 50 per host

eve at orms

levelplatormscomNetwork monitoring Contact the vendor

(Continued)

Marketing

Marketing and business development expenses vary rom company to company but it is sae to

assume at least a minimum o $100,000 per year to be spent on this avenue

Cost of running a 5 member organization

Let’s assume that you have 5 employees and you have a small oice where you run your operations

center then the cost incurred per year would be as shown below

(Continue)

Item Description Cost (annual)

Salary

System Administrators – 3

Backend operations support

a es an mar et ng – 1– 1

380,000

[3* 80k, 1* 50k, 1* 90k]

on-salary components

such as insurance etc

On an average around 20k per

emp oyee s spent on t ese

non-salary components

100,000



Finances

26

Item Description Cost (annual)

Minimum 100 square eet is required

per employee At an average rate o 1per sq t per mont or ease you w e

shelling our 750 per month on lease

9,000

perat ons

Other acilities include telephones,

a r con t on ng, nternet,

housekeeping, power etc

60,000

ar ware

omputers or operat ons ( ystem

admin-3 & backend operations-1) team

aptop or sa es

Servers or hosting product

Networking gear

13,500

[4*2000, 1* 1000,

2500, 2000]

o tware

Includes the remote management and

us ness so tware you nee to run t e

business (Reer the table Various tools

ava a e n t e mar et

5000

Marketing and

advertising expenses

Advertisements, Website, Meeting

customers, Tradeshows etc 100,000

Total 667,550

(Continued)

Go slow on hiring …

alary accounts to 70% of your expenses.

Expenses

Software1%

Marketing14%

Hardware2%

Operations

8%

Lease / rental8%

Nonsalary14%

salary53%




27

ence it is important that you go slow on hiring and have enough customers on board before you start

iring. i you reac t at p ase you s ou oo or some ruga ways to run usiness. ome o our customers

have handled this phase very frugally in different ways ranging from work-from-home to virtual offices.

Type Description Cost incurred

Working rom home

you are yet to acqu re a s ng e

customer then the perect way to get

started is by working rom home

tart w t u ng a we s te or your

business and try some ree tools

0

Rented datacenter + wor rom ome

I you are conident o ew customers

s gn ng up w t you t en you m g t

invest some money on either hosted MSP sotware or you run a MSP

p at orm n a rente atacenter

10 per device per month

r

600 per month or

hosting + cost o on-

premise sotware

our own are- ones

Network Operations

enter operat ng out o

a o ce

you are operat ng n ata sens t ve

verticals such as banking you might

have to invest more in building your

own networ operat ons center

Approx 2500 or server

hardware Plus cost o

so tware us 1 extra

or bandwidth, power, and

ot er operat ons


Stop worrying about the working capital required to run your managed services business Today

various Banks are ready to oer working capital Wells Fargo bank oers working capital loans

rom $5,000 to $100,000 or new business that is less than 2 years old They require your busi-

ness inormation such as business name, TIN, annual revenue, name and contact details o the

business owner, business banking account numbers etc They oer loan terms up to 5 years



Finances

28

You can also approach or SBA loans The SBA is a ederal agency that helps established businesses

grow and helps new businesses get started SBA loans are not directly provided by the SBA, but

provided by commercial lenders SBA guarantees a portion o the amount to the lender in case the

borrower ails to return



2


Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a






competition

Operations

Plan for your operations

Operations can be broadly classiied into two types–

internal acing and external acing Internal acing teams work on a day-to-day basis to oer a smooth working

environment or the external acing teams The two

large external acing teams are the customer service

and sales Though there are many roles described here

many o them would be perormed by one or two in

some cases

6

Plan for your operations

Reducing internal

operations headache

Reducing external

operations headache



Operations

30

Reducing internal operations headache

To reduce your operations headache you can outsource some o the non-core activities such as

payroll processing One o the leading irms that oer HR as a service is Trinet

Departments Description

ustomer erv ce

This is the core team o a managed services organization

acilitates smooth management o customer IT

ncompasses eng neers, support sta , e p es , ons te

echnicians etc

Sales and marketing

eams t at wor on r ng ng customers to t e ta e ten

involved in account management, marketing campaigns,

a vert sements etc

Purchaseacilitates purchasing o hardware, sotware, oice

equ pments, an everyt ng t at s oug t rom outs e

Sysadminan es ay-to- ay trou es oot ng as we as strateg c

IT enhancements such as security, backup, bandwidth

planning etc

ayro an emp oyee ene tsandles monthly salary processing, employee tax

p ann ng, an ot er act v t es re ate to emp oyee ene ts

ousekeepingnsures a clean and hygienic oice atmosphere taking care

o every aspect o c ean ng an rep en s ments

uman esourcesan es emp oyee atten ance, eaves, sa ary es,

emp oyee sat s act on etc

egalrotects t e company’s r g ts an ot er nvestments

legally by veriying all contracts and agreements signed




31

Services offered by Trinet Description

erv ces

nc u es a act v t es suc as payro , uman cap ta

guidance, employee related state and ederal tax iling

and recordkeeping etc, employee assistance, health and

ene t rograms

Human Capital Servicesers recru t ng, measur ng an rewar ng per ormance,

career transition and counseling etc

International HR Through global relationships oers HR services incountr es wor w e

nsurance

Oers extensive range o insurance coverage such as health

nsurance, or ers’ compensat on, u ng an persona

property nsurance



Operations

32

Reducing external operations headache

To reduce your external operation headache and cut cost better outsource your external

operations to India With a vast pool o skilled engineers there are a number o Indian IT service

provider organizations waiting to do this or you or say $10 per device per month Most o

these companies have well established processes and also boast o their employee proiles – most

o them with 2–5 years experience being sysadmins and network admins, with CCNA, MSCE

certiications

: Cost o setting up an operations support team in US Vs outsourcing Total

number o devices to be managed is 500 and number o operations support personnel required is

5 At an average salary o $55,000 per operations guy per year, you would be shelling out $275,000

on salaries or 5 operations members And at $10 per device per month you would be able to

get almost similar job done by an Indian partner or $60,000 per year Moreover, i you have

multi-year contracts the dierence becomes high when you include salary increments every year

MSP Center Plus Market Place Many MSP Platorm vendors oer operations support as part o

their package itsel And ew others such as MSP Center Plus brings

together a market place which enables you to browse through a list

o ZOHO Corp certiied IT operations provider and pick one that

suits your business model

It makes lie easier or you as you don’t have to go through

the pains o identiying a partner and managing the relationship







2


Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a






competition

Legal

Legal Documents

Legal documents deine the contractual relationship

between you and your customer They provide the exact details on the rights and limitations what you and your

customer have with each other Whenever acquiring a

new customer make it a process to get sign rom the

customer in the legal documents In the long run only

the legal documents are considered valid when any

issues arise between you both

Agreement o Services is the important legal document

that you and your customers should sign whenever you

acquire a new contract The services agreement document

should cover what are all the services are committed to

oer, who is the liaison person, intellectual property rights,

security standards, third party non disclosure agreement,

validity period o this agreement and termination process

o this agreement

7

Legal Documents



Legal

36

Agreement for Services

his Agreement for Services (AGREEMENT) (’the Agreement) is signed on _____________________,

2008, by and between:

____________________________

And

1 Purpose and scope of this AGREEMENT:

his AGREEMENT is between ___________________ (hereinafter referred to as YYYYYYYY) and

______________(hereinafter referred to as XXXXXXXX), wherein, will provide monitoring services

o _______________________ to monitor their LAN and WAN infrastructure based on the tentative

roposal ______________________________

2 Natures of Services provided:

he services provided by _________________________ to _________________________are limited

o monitoring services only. In addition _____________________ will provide alerting services in the

orm of Emails and/or SMS’s only to selected staff from _______.

3 Liaisons for the __________________:

_________________________________ will nominate one or more person/s who will be the

iaison person/s (“Manager/s”) for specific employee provided by ______________________ to

_____________________ during the term of the trial period consultant shall interact and coordinate

with the Manager/s.

Validity period of this AGREEMENT:

is A is va i or a perio o _____ ays. e A can e exten e wit mutua

agreement between ________________________ and ________________________.

__________________ s a provi e agree upon monitoring services to

__________________________ for a maximum period of _______________ commencing ____ weeks

rom the date of signature of this agreement. After the stipulated period of ____________ days,

monitoring services s a e automatica y terminate y ___________________________________

Network Management Server.

5 Commercial:

fter the completion of trial period and on the basis of assessment, nature and complexity of the work

__________________________ shall issue a comprehensive monitoring and management solution with

he commercial aspects to _____________________________.

Intellectual Property Rights confidentiality agreements:

so tware, systems, i eas, concept, esigns, ocumentation or any ot er materia pro uce y t e

_____________________ during the trial period to __________________________ will either be




37

Intellectual Property of __________________ or that of its Customers. ________________________

wi not ave any rig ts to suc materia escri e as a ove.

r arty on- sc osure greement:

_______________________ will keep all the data, sources and information confidential and will notisc ose or re ease it to any ot er party.

_______________________ and their employees/sub-contractors shall not disclose any information

elated to ______________________ IT infrastructure to anybody not even to any related party unless

asked by ________________________ to do so. The vendor/sub-contracting agencies who will be

involved during the set-up for monitoring services will be held responsible for the conduct of their personnel.

____________________ and their representative shall not disclose __________________ or its Clients

rivate information. This private information includes but not is limited to identified client data,

employee personal data, security posture, vulnerability status, and attack status. This clause will remain

alid even after the termination or expiry of this AGREEMENT.

8 ecur ty tan ar s

alicious software such as viruses can cause considerable damage to information & IT assets.

_________________________ shall ensure that effective anti virus measures are followed across Client.

____________________ shall agree to enhance its guard against intrusions and failures that may

affect confidentiality, availability and integrity of information and may damage information assets.

_______________________ shall not be held responsible for any threats and damage which may

emerge out of virus/malicious attack or natural or unforeseen disaster.

______________________ s a meticu ous y try to monitor _________________________

infrastructure, in event of an alert not being generated by ________________ Monitoring Server dueo any unforeseen reason, ________________ will not be responsible for any loss of data/service that

_______________________ accumu ates.

Termination of this AGREEMENT:

Either party can voluntarily terminate this AGREEMENT by giving ________ days notice to the other

arty. If __________________ terminates this AGREEMENT voluntarily,

_________________________shall provide all the documents and reports generated during the

stipulated period of monitoring.

READ AND AGREED

On behalf of On behalf of

__________________________ ______________________________

Signed: __________________________ Signed:

Name: __________________________ Name:

itle: __________________________ Title:

ate: __________________________ ate:





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Current trend in

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Who should

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Why do MSPs have a






competition

8

WAR on the VARs

The most compelling

reason for change

Managing change

How to migrate from

VAR to managed

services?

WAR on the VARs

Gartner predicts that 40% o the VARs will go out o

business i they don’t switch to managed services Shrinking

margins on hardware sales, competition rom direct

channels, and increasing competition pushes VARs to

lookout or other avenues to sustain business Analysts

and experts continue to express their opinion that the

MSP model suits best or traditional VARs who sell low

margin products, taking backups, replacing hardware

etc and receive unpredictable revenue rom break-ix

maintenance gigs

The most compelling reason for change

Traditional VAR business oten takes a cost-plus approach

where the proits come rom the margins on every

hardware/sotware sale This model is so ineective that

you always work hard or the hardware vendors and end

up with stagnating/declining proits irrespective o stellar

revenue growth



How to migrate from VAR to managed services

40

In contrast, the MSP model gives you a steady stream o recurring revenue and also enables

you to increase proits over the years

Managing change

There’s no magic potion to migrate your business model rom VAR to MSP It needs a cultural

change that cuts through every process and every employee in the organization You as the presi-

dent o the company need to manage this change and ensure a smooth transition rom traditional

business to the new managed services business




41

Key doctrines that you should set or yoursel or change:

Doctrine What you need to internalize Benefit

am not selling

ro ucts anymore

e are no more a pro uct–

reselling company e are a

serv ce prov er y every act

our ocus automat ca y s ts

rom vendor relations tounderstanding the end

customers an n ng ways

to add value to their business

w t your serv ce

My employees won’t be

e per our

We are no more selling human

hours We are selling a pack

age serv ce at a xe cost per

month

Cuts your employees ree to

work on several customers Vs

gett ng oc e w t ust one

customer at a t me

We will not be

react ve… ut proact ve

e are no more a rea - xcompany We will be proactive

o the maximum possible extent

Being proactive helps youidentiy problems beore they

ecome us ness mpact ng

downtimes

We are selling o the

ruc s an uy ng

remote tools

o more truc ro s o

everything remotely and will

save human capital or valuable

an a e v s ts

rotects your nvestment on

emp oyees as t ey spen more

time working than travelling





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Current trend in

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Who should

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competition

9

There ain’t no such thing

as a FREE LUNCH

Two things they want you

to talk about

Winning new

customers

There ain’t no such thing as a FREE LUNCH

When PowerPoint presentations, lengthy discussions,

and beer ail to help you win a new business, oering a

FREE TRIAL does We have seen this in most o our

successul managed service provider customers where

they throw-in 6 months o FREE monitoring along

with a hardware installation or a server upgrade At the

end o the trial period you gain enough insight about the

prospects’ networks, servers, vulnerabilities, traic pat-

terns and potential problems that you are ully equippedto show value and win a managed services contract

Two things they want you to talk about

Business owners are interested in just two things 1) savings

you bring in to the organization and 2) hassles you take

away rom them I you can strongly display these two

values i am sure you can win any business deal

#1: Show them savings Money is the most inluential inluencer worldwide

So when you approach new customers, do your home-

work Calculate how much the customer spends right

now on managing IT and show how much he would

save i it is managed by you



Winning new customers

44

For example, let’s assume a company with 200 devices and two resources to manage it – a network

administrator and a system support assistant The bare minimum cost incurred in managing thedevices in house would be around $136k per year

Item Details Cost

Salary

n an average t e company wou e spen ng

around 54,000 + 55,000 = 109,000 every

year on sa ary

109,000

n rastructure or

managing the devices

Other expenses spent or Network

Administrator + System support assistant such

as systems, amen t es, ac erry etc

10,000

Sotware applications

u t p e too s or manag ng

Server monitoring tool, desktop management

tool, remote management tool etc

ssum ng an average cost-per- ev ce o

per month 200 devices x 746 X 12 months

17,904*

Total 136,904

Assume that you can manage these 200 devices at $30 per device per month That makes it $72,000 per year At a 10% hike every year the cost o doing it in-house would touch around $635

k in our years I the customer takes the managed services route he would save around 55%




45

In-house Managed Services

rst ear 136,904 ,

Second Year 150,594 72,000

r ear 165,654 ,

Fourth Year 182,219 ,

Total 635,371 288,000

Savings $347,371

n percentage

Salary.com

a aries pai or re ate jo responsi i ities. or your re erence.

(Continue)



Winning new customers

46

#2: Tell them they can mind their own business now

No kidding Managing the IT (and the IT guy) or a small business owner is really a headache

It distances them rom their core competency and takes away considerable amount o time

(Continued)




47

Imagine an architectural design house with 100 employees and one IT guy Day-to-day

operations involve uploading images to the server rom the user machines, backing up the images,

and ensuring all machines are up and running all the time Though it looks simple, over a period

o time it brings lot o problems or the business owner

Problems in managing the IT guy:

Problem Description

work environment in SMEs

ma organ zat ons a to prov e guys w t a c a

lenging and dynamic work environment Being geeks

at eart t ese guys norma y pre er to wor n arge

enterprises where they get to be hands on with cutting

edge technologies and be update

Business owner has limited scopeor ncreas ng t e sa ary or t e

T guy

n e arge enterpr ses t e guys n s ave very

limited chance to improve Their work is more o arepeate n us ness owners a so ave very m te

scope to oer high salary as their business model varies to

hat o large enterprises

Business owner needs to spend his

valuable time in motivating and

gu ng t e guy

It becomes mandatory or the Business owner to mo-

ivate and guide the IT guy though he doesn’t play a

ma or ro e n expan ng s us ness

It’s very clear that Business owners don’t want to have an IT guy As a MSP you could manage

their IT and let him have a ull ocus on his core business





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Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a






competition

10


How virtualization helps

your customers?

How much they can save?

Server Virtualization

solutions

Virtualization sells.

Sell Virtualization.


Computer virtualization reers to the abstraction o computer resources, such as the process o running

two or more logical computer systems on one set o

physical hardware The concept originated with the

IBM mainrame operating systems o the 1960s, but was

commercialized or x86-compatible computers only in

the 1990s With virtualization, a system administrator

could combine several physical systems into virtual

machines on one single, powerul system, thereby

unplugging the original hardware and reducing power

and cooling consumption

Though there are a lot o innovations happening

in the desktop virtualization, we will limit the scope o

this document to server virtualization In server virtu-

alization a single server box is partitioned into multiple

virtual servers running dierent Operating Systems,

thereby achieving higher server density The biggest

advantage o server virtualization is that with the excep-

tion o sharing the core resources, each virtual server



Virtualization sells. Sell Virtualization.

50

acts as its own entity Problems with an application on one server do not aect others, and it is

possible to reboot a speciic virtual server

How virtualization helps your customers? Virtualization is the key to increasing eiciency, ease o management, and most importantly saving

costs in datacenters Even i your customers don’t ask or virtualization, explaining the advantages

o it would help you persuade them towards virtualization I you don’t have virtualization in your

service catalog, add it today

Top 7 virtualization benefits that you can sell to your customers:

Benefit Description Value

Reduced number o ys ca servers

y v rtua z ng you can re uce t e

number o physical servers at your

customer datacenter drastically

e uce ma ntenance

cos s

Reduced space

e uce energy

consumpt on

e uce num er o oxes re uces t e

energy consumedReduced energy costs

u t p e on a

single hardware

y v rtua z ng you can run mu t p e

operating systems on a single boxReduced hardware costs

e uce ownt mes Reduced number o boxes increaseseective monitoring

ncrease e c ency

Rapid new servers

ep oyment

eve op a stan ar v rtua zat on

setup and duplicate when building a

new server

Reduced deployment

me

(Continue)




51

How much they can save?

Assume that a customer has 5 Dell Power Edge R200 servers or running MicrosotNet,

GlassFish, WebLogic, Tomcat, and Silverstream applications separately By virtualizing youcan run all the 5 applications on a single Dell Power Edge 2900 server Go through the below

given calculations to know how much your customers can by choosing virtualization

asy saster recovery

By virtualizing you can take periodical

snaps ots o servers so t at n case o a

sudden shutdown, you can restore thesnaps ot an r ng up t e mac nes

e uce ata oss

mproved Reliability and

va a ty

Application problem in one VM does

not a ect t e ot er

mproved overall

serv ce ava a ty

(Continued)

Category 5 dedicated servers

Dell Power Edge R200

1 virtualized server

Dell Power Edge 2900Savings

ardware cost 5 * 749 = 3475 1499 1976 ave up to

ower = 1 ave up to

lectricity cost

cents

in Florida

1 1

74/100 = 1,456

1

74/100 = 785761 ave up to



Virtualization sells. Sell Virtualization.

52

SELLINGCase study Cornerstone IT

One of our MSP customers in New York had a customer asking them for a server upgrade. The customer

was a ea ing aw irm in ew or w o is a so a mem er o o a A iance. e aw irm as een

employing this MSP for hardware upgrades since early days when the MSP was originally a VAR resellinghardware and software.

After a preliminary evaluation the MSP found a greater

scope to Virtualize the environment which consists of 30

physical servers running in different rack holdings. When

presente wit t e cost an space savings t e customer too was

impressed and gave approval for virtualization.

he final implementation was a 5 server single rack

holding setup with the exact same set of services being

offered. Needless to say the MSP was also offered a remotemonitoring opportunity by the customer because of the faith

t ey ave in t em now.

[Seen in picture: Thomas Moreo (standing) and Neil Falla

of Cornerstone.IT]

Server Virtualization solutions

Some o the Server Virtualization solutions available in the market:

Vendor Solution

rtuozzo onta ner

para e scom pro ucts v rtuozzo

ware ware ervers

vmwarecom/products/vi/esx/

croso t rtua erver

microsotcom/windowsserversystem/virtualserver/

Microsot n ows erver yper-

wwwmicrosotcom/windowsserver2008/en/us/hyperv aspx

tr x Xen Server Standard & Enterprise Edition




53





2


Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a






competition

11

What is power

management?

Why should you practice

power management?

How much can you save?

Tools that automate

Windows power

management

Advocate power

management –

Go green

What is power management?

Automatically turning o computer components such as

monitors, hard drives, CPU, and RAM ater a period o

inactivity is reerred to as power management All com-

puters and laptops sold today have power management

options inbuilt to switch to standby or idle mode when

no operations are done This little eature enables lot

energy savings For example, the total power consumed

by a typical PC (P4, 175 GHz & 17" CRT monitor) is

175 watts/hour but during sleep mode it consumes only

35 watts/hr

Why should you practice power management?

It’s just unbelievable to know that CO2 emissions rom

just 15 computers are equivalent, in energy terms, to the

gas consumption o one car Moreover, Gartner reports

that Inormation and communications technology (ICT)

is responsible or 2% o the global CO2 emissions, an



Advocate power management – Go green

56

amount equivalent to aviation Factors that contribute to the 2% are in-use phase o PCs, servers,

cooling, ixed and mobile telephony, local area network (LAN), oice telecommunications and

printers across millions o businesses all over the world Enabling power management on these

devices will be a global imperative in the near uture

As an MSP you have the option to be a thought leader and start practicing power management and green computing in your customer environment or two reason – 1) it saves mother earth and

2) it saves huge amount o money or your customers

How much can you save?

A company with 500 computers can save anywhere rom $30,000 to $60,000 per year on energy

bills Assume you have a customer in FL who runs 500 Dell Vostro 200 Minis with Intel Pentium

Dual Core E2160 processor and a 17” monitor Given the retail price o 974 cents per kW hour

in Florida, your customer would be burning 12264 kW hours per year and paying $60k on

energy bills i all the computers were switched on 24*765Watts + 75Watts X 8760 hours / 1000 = 12264 kW hours [Thermal Design Power o

E2160 is 65Watts For monitors its 75Watts]

12264kW hours X 974 /100 X 500 = $59,725

I the company ollows standard business hours o 9AM-6PM Monday to Friday, the total

working hours contribute just 27% o the overall available time

And in these 45 hours, reports indicate that, only 60% o the time the desktops are actively

used Rest goes in breaks, phone calls, meetings, and discussions I someone enables strict power

management or the above case, it will result in a savings o approximately $50k per year

$59,725 X 073 = $43,599 (or non-working hours)

$59,725 X 027 X 04 = $6,450 (or 40% idle time)

Total: $43,599+$6,450 = $50,049




57

Depending on whether the computers were powered on 100% o the time or 50% o the

time, the savings could vary rom $50k to $295k per year

Power management in Windows

Windows offers two power management options - standby and hibernate. In standby mode the computer

goes to a low power mode, with all applications and files remain open. Only the RAM part of it will be

active to maintain whatever resides and consumes very minimum voltage.

In hibernate mode the computer writes off the entire contents of its real memory as one big “hiberfil.

sys” and stored in the C drive. Once the writing gets completed, all power is removed from the computer, as

i you ave s ut own. Again w en power is initiate , t e computer oots an starts t e app ications in t e

startup and reads the “hiberfil.sys” file available in C drive. It proceeds to load the entire contents back.

(Continue)



Advocate power management – Go green

58

Tools that automate Windows power management

Most MSP Platorms in the market today support automating power management This helps

MSPs to go conidently to the customers and implement power management with ease For

example, MSP Center Plus enables you to conigure power management options ONCE and

deploy them to thousands o remote computers in just ew clicks

(Continued)



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Current trend in

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12



Package the pricing

Package your pricing


Pricing decides revenue I you price low, you lose

money, i you price high you lose customers It’s abalancing act Managed Services is a big and everlasting

opportunity and there is no need to rush up on pricing

your clients There is no need to jump on conclusions

and give away discounts to your customers as it is to

capture your share in the market

Analyze your client irst and look at their business,

whether he is a Bank or a Healthcare irm You should

price your services based on the value you create and not

entirely on cost Converse with your customer and under-

stand his business needs This helps in establishing the

value o your oerings to the customer Based on this,

price and sell your service


Per device – This is airly simple and most

MSPs utilize this They develop a lat ee or

each device type that is supported in the

environment Eg, $69 or Desktops,$299 per server, $29 or network printers etc

This model is easy to quote and monthly

billing is simple

Per user – Very similar to per device model,

but the lat ee is billed per end user per month

and covers or all devices used by each end user

Includes, oice PC, laptops, PDAs etc



Package your pricing

60

All you can eat – This is extremely lexible and includes all remote support, on-site

support and provide 24/7/365 support or service The primary goal is to provide the

customer with ability to budget their IT support cost over a year’s time

Package the pricing

Provide a variety o pricing options that cover dierent customer’s needs Say, Silver, Gold and

Platinum Packages



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Current trend in

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13

What is a service catalog?

Service catalog in ITIL V3

Sample service catalog as

viewed by your end users

Internal view of your

service catalog

Build a service

catalog, it helps

What is a service catalog?

It’s a good practice to build a service catalog or your

business irrespective o whether you are big or small

Service catalog is a list o services you oer to your cus-

tomers According to ITIL V3, the service catalog must

be easily accessible and should be recognized as the irst

source o inormation or users seeking access to a ser-

vice It must include not only the value proposition and

pricing, but also the ordering and request procedures

or users, as well as standard ulillment practices andservice level agreements (SLAs) or IT service teams

Service catalog in ITIL V3

Service catalog was introduced in ITIL v2, but it didn’t

oer much in depth ocus In most o the cases, the

paper-based Service Catalog document went unread

and unused by customers Also IT industries which

implemented SLM, had their catalog more speaking

about the technical metrics associated with network andsystem management rather than the services oered on

those perormance metrics

The new ITIL V3 Service Design book ound the

solution It removes Service Catalog responsibilities

rom Service Level Management (SLM) process and

promotes the Service Catalog rom a simple listing

o services into its own process the Service Catalog



Build a service catalog, it helps

62

Management (SCM) process The Service Catalog is the output o the SCM process and includes

all the services oered

ITIL also suggests that users must be provided with a sel-service portal in the Service Catalog,

as their primary interace or requesting new IT services and obtaining status o service requests

Thereby it introduced a new process called Request Fulillment process to standardize the handlingo service requests The Request Fulillment process acknowledges the act that most o the work

done by IT is repetitive and ineicient In order to optimize, ITIL V3 recommends integrating

Request Fulillment with Service Catalog This transorms static display o IT services into an

actionable sel-service tool useul to both business users and IT and this results in the introduction

o Actionable service catalog

Sample service catalog as viewed by your end users

Below is the end user view o a sample service catalog

Internal view of your service catalog

Below is the internal view o your service catalog




63





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Current trend in

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Who should

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14

Two reasons why you

should offer remote

backup

In-house backup Vs

remote backup

How to build a remote

backup service offering

Backup vendors

Amazon S3

Build a remote backup

service offering.

Try Amazon S3.

Two reasons why you should offer remote backup

Sources say that 40% o companies that don’t have

disaster recovery plans go out o business in the event o

a storm or any other natural calamity That’s the num-

ber one reason why you should oer remote backups

It ensures business continuity to your customers at

some o time when nature strikes Secondly, the tools

that do automated backups have improved a lot making

it really hassle ree to build a service oering on top o

them without making any signiicant investment

In-house backup Vs remote backup

Many o you might ace this situation when you try to

sell your own remote backup services Your customer

already runs an in house backup either on a tape or a

disc But don’t panic, there are some interesting acts

that help you convert such customers to your remote

backup service Reports say that o the companies that

do in house backup there are lot o chances or things

to go wrong as discussed below



Build a remote backup service offering. Try Amazon S3.

66

How to build a remote backup service offering

The options available to you can be broadly categorized into two – 1) simple reselling o someone’s

backup service where the data resides in the vendor’s datacenter and 2) building the service all by

yoursel - buy backup sotware and store data yoursel

Backup vendors

Some o the popular backup vendors who oer solutions to Managed Service Providers:

Vendor Details

Ahsay a saycom

Ahsay™ Backup Sotware Service Provider Edition allows you

o u y ran t e so tware nto your own a e an to e part

o your total data protection and disaster recovery solution

Portal enables you to brand the client sotware, management

conso e, an ac up o reports on t e y

Vembu StoreGrid

vem u

tore r e ps you to ac up your c ents ata to a server

managed by you or to a cloud computing and storage

latorm like computing

(Continue)




67

Secure Resolutions

secureresou t onscom

eso ut ons ac up an ata ecovery support oca

backups as well as those over the Internet to their secured

datacenters All data is encrypted on disk and in transit

emote ac ups

www remotedatabackupscom

Remote Backups provides easy to use, secure and reliable

backup solution that takes backups o the data and stores in

t e r secure ata centers an m rrore

Compu Vault

compuvau t

ompu au t automat ca y an secure y ac s up a your ata

- data that resides on every machine on your LAN, i required

And it backs it up directly to the osite storage vault in a secure

ata center, requ r ng no a y user nteract on ompu au t’s

data backup and recovery services are automated and centrally

manage to e p you protect your cr t ca ata

Storagecrat

s oragecrag com

StorageCrat’s wide range o products that oer disaster

recovery, s ac up, ata protect on an secur ty so ut ons

Managed Service Provider (MSP) oers Partner Program to

give MSPs, VARs and other resellers a way to sell

a ow rotect™ s - ase ac up an saster recovery as

a managed service

Backup Solutions

backupsolutionscom

BackUp Solutions provides online backup services which are

secure, automated and easy to use They have proessionally manage , m rrore an g y re un ant ata centers w t a

9% historical uptime over the last seven years to ensure 24/7

availability o their customers’ iles whenever they need them

ova

novas ar

ova us ness ssent a s prov es ata protect on

sotware solution or small and medium businesses and

protects all their critical inormation

ac up tec no ogy www iasobackupcom

IASO Backup Bank oers you a ull online backup service

so ut on, at a xe mont y rate our ata s ac e up v aInternet to our highly secured datacenter, oering the backup

unctionality and service level your organization requires

torage uar an

www storagegaurdiancom

Storage Guardian is a complete, secure, on-line data

management serv ce or enterpr se-w e s, nc u ng

automated backup, ault-tolerant o-site storage, and ast

data recovery

(Continued)

(Continue)




68

Vendor Details

s gra

www as gracom

s gra e evau t ng s comp ete y ntegrate to support your

business Asigra Televaulting or Service Providers is a WANplatorm solution or delivering backup/restore service as a

ut ty t ncorporates everyt ng you nee to ep oy,

provision, and start selling your storage service

ron ounta n

ronmounta ncom

ron ounta n’s ve au t s a comp ete server ata ac up

and recovery solution or remote oices o large enterprises

an sma me um-s ze us nesses om n ng proven

disk and online technologies, LiveVault radically simpliies

the protection o all your company’s servers, including ile,

ata ase, app cat on an xc ange servers - v rtua y e mnating the risks and burdens o traditional backup methods

(Continued)

SELLINGCase study NetStandard, Inc.

NetStandard, Inc. is a leading managed service provider in

Kansas and a long time MSP Center Plus customer. Recently

ey ave starte o ering remote ac up as a service ca e

DataSafe to their customers.

About DataSafeDataSafe is a system that sends your backup data from your

internal network over your Internet connection to NetStandard’s

DataSafe Vault located in our N+1 Data Center. The new

mi ennium as pro uce signi icant egis ation t at requires your

corporation to protect customer data and ensure the integrity of

accounting statements. DataSafe enables companies to meet the

data protection demands of this legislation including Sarbanes-

Oxley, Gramm-Leach Bliley, PCI and HIPAA. Netstandard uses

Asigra for backup.




69

Amazon S3

Amazon’s Simple Storage Service (S3) provides cheap and unlimited online data storage or

anyone with a credit card and an Amazon Web Service (AWS) account I you have an AWS

account, you can interact with the S3 service using specialized tools to upload and manage your

iles Amazon says that the same scalable storage inrastructure that powers amazoncom is the

one that powers S3

S3 adoption is growing

Since its inception in March 2006 lot o companies have started using S3 The number o buckets(unit o storage) in S3 has almost tripled in the last one year Photo hosting service SmugMug is

believed to have saved more than a million dollar by using S3 instead o their dedicated storage

servers Lots o storage vendors have started using S3 and other Amazon services Good example

is Vembu Store Grid Backup Sotware which oers EC2/S3 support in its upcoming version




70

How it works?

It stores everything as an object, each not more than 5 gigabytes in size These objects are

organized into buckets and identiied within each bucket by a unique user-assigned key

Buckets and objects can be created, listed, and retrieved using a HTTP interace (REST) or

SOAP interace

Pricing

At $015 per gigabyte per month Amazon is the most inexpensive online storage option available

today Amazon wants you to pay or the storage, the bandwidth you (and your users) consume,

and or the number o requests you send to its servers

Storage

Per GB for first 50TB

Bandwidth

Per GB (in/out)

Requests

Per 1,000

n te tates 0 1 01 / 01 0

urope 01 01 / 01 0 1



2


Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a






competition

15

Key Components in

Amazon Web Services

How EC2 works?

How EBS works

Elastic IP Address – for

redundancy

How Amazon EC2

differs from Traditional

Data Centers

Reducing Hosting

Cost with Amazon

I you are a start-up managed service provider, I would

recommend you taking a look at Amazon Web ServicesIt is very promising and it helps you host your sotware on

Amazon EC2 (Elastic Compute Cloud), store the data on

a networked drive EBS (Elastic Block Store), and backup

the data on to the S3 (Simple Storage Service) with an

uptime guarantee o 9995% All this or less than $99

per month



Reducing Hosting Cost with Amazon

72

Key Components in Amazon Web Services

Amazon cloud basically has three components you need to know about:

EC2: Elastic Compute Cloud (your server in the clouds)

EBS: Elastic Block Store (your disk drive in the clouds)

S3: imple Storage Service (your storage platorm in the clouds)

Instance Size No. of EC2 units* Memory

equivalent

Hard disk

equivalent

Processor

Platform

ma 1 t arge 64 bit

xtra arge 1 1 64 bit

g

nstance

How EC2 works?

EC2 works on Xen virtualization technology Each virtual server is called a server instance andavailable in various sizes Sizes are deined based on EC2 compute units, which is the equiva-

lent o CPU capacity o a physical hardware EC2 now supports the ollowing operating sys-

tems - Red Hat Enterprise Linux, Oracle Enterprise Linux, Windows Server 2003, OpenSolaris,

Fedora, Debian, Cent OS, Gentoo Linux and FreeBSD

EC2 Instance Options

(Continue)




73

How EBS works

EC2 provides the option to store the data o the instances on Amazon Elastic Block Store (EBS),

an o-instance storage device (similar to that o a hard disk) EBS is independent o the lie o the

instances; thereby you can keep your data redundant Amazon EBS volumes are highly available,

reliable and are attached to EC2 instances and are exposed as standard block devices EBS volumes

oer greatly improved durability over local EC2 instance stores, as Amazon automates backup or

EBS volumes Not limiting with EBS and automated backups Amazon oers much more dura-

bility by providing the option to store the EBS volumes on Amazon S3 as snapshots and thereby

replicating the data across multiple availability zones Amazon does not encrypt the data while

storing it in EBS, but recommends to having an encrypted ile system on top o the EBS

Instances Windows (US) Linux/Unix (US) Linux/Unix (Europe)

ma 01 r 01 r 011 r

arge 05/hr 04/hr 0 4/hr

xtra arge 1/hr 08/hr 088/hr

g e um

nstance03/hr 02/hr 022/hr

g xtra

arge nstance1 r 0 r 0 r

Note: Amazon does not support Windows based applications in Europe region.

Amazon EBS Volumes Price in US Price in Europe

er o prov s one

storage per month01 011

er 1 m on requests 0 0

g

Medium Instance1 32 bit

igh CPU Extra

arge nstance1 t

* 1 EC2 Compute Unit = 1.0-1.2 GHz 2007 Opteron or 2007 Xeon processor

(Continued)

EC2 Pricing




74

Elastic IP Address – for redundancy

To make your application redundant Amazon oers Elastic IP Address, a static IP address

designed or dynamic cloud computing The big advantage with Elastic IP Address is that you

need not depend on a technician to replace the host, or wait or DNS to switch to all o yourcustomers when a particular instance goes down, you can programmatically remap to another

instance, provided you have another instance running already An Elastic IP Address is associ-

ated with your account and not with a single instance, you can obtain one and use whenever you

require However, Amazon charges $01/hr when you are not using due to the limited availability

o public IPs and or eective usage

Amazon EBS to S3 Price in US Price in Europe

Per GB o data stored

er month$015 $018

Per 1000 PU requests(when saving a snapshot)

$001 $012

Per 10,000 GE requests (w en

oa ing a snaps ot)$001 $012

Elastic IP Address Price in US Price in Europe

Per non attached Elastic IP Address per complete

hour (when not using)$001 $001

First 100 remaps/month per Elastic

IP Address remap$000 $000

More t an 100 remaps/mont per E astic

IP A ress remap$01 $01

Data Transfer: Accessing EC2

Pricing also varies according to the data transerred in and out o the instances Data transerred

between two Amazon Web Services within the same region (ie between Amazon EC2 US andanother AWS service in the US, or between Amazon EC2 Europe and another AWS service

in Europe) is ree o charge Data transerred between AWS services in dierent regions will

be charged as Internet Data Transer on both sides o the transer However, usage or other

Amazon Web Services like S3 is billed separately rom Amazon EC2




75

Data Transfer IN Price

A ata transer $01/GB

Data Transer OUT Price

irst 10TB per mont 0

ext 40TB per mont $013/GB

ext 100TB per mont $011/GB

Over 150TB per month $010/GB

Amazon charges $001 per GB in/out or all the data transerred between instances in dierent

availability zones in the same region ie, data transerred by an instance in an availability location

in Caliornia to another instance in Florida

How Amazon EC2 differs from Traditional Data Centers Amazon EC2 Traditional Data Centers

Fixed cost or the resources you use

Bi ing is ca cu ate on our y asis Bi ing ca cu ate on pre etermine ixe perio

asi y sca e up or own w enever require um er o resources is ixe an iicu t to

handle sudden computing requirements

u contro on your computing resources ou can

aunc /terminate instances w enever require

Fu contro over t e computing resources is not

provi e




76

AWS Console and Elastic Fox

Amazon oers two User Interaces or you to manage your instances One is the http://console

awsamazoncom and other is a ireox add-on




77

Hosting MSP Center Plus on Amazon Cloud

ou can now run MSP Center Plus software on the Amazon cloud. For your convenience we have created

an Amazon Machine Instance (AMI) of MSP Center Plus. This instance consists of a fresh copy of MSP

Center running on a 32bit Windows 2003 R2 Datacenter Edition with 1.7GB RAM.

Steps to run MSP Center Plus on Amazon EC2 + EBS

mazon doesn’t preserve the state of any of its EC2 instances, which means if an instance crashes your

data is lost forever. To solve this problem you can store DATA and other CONFIG files of MSP Center Plus

on an EBS volume which has better reliability (at least 10 times more than a conventional drive) so that

during a crash you can launch a new instance within minutes and associate the EBS volume to it.

Steps to run EC2 + EBS

1. Get an AWS account - www.amazon.com/gp/aws/registration/registration-form.html

2. Sign in to AWS Console - https://console.aws.amazon.com

3. Choose AMIs and search for an AMI named mspcenter (mspcenter/mspcenter.manifest.xml).

4. Run the instance (note down the instance id i-xxxxxxxx).

ou have now successfully started your MSP Center Plus on EC2. Now you need to configure MSP Center

Plus to store data on to an EBS so that your data is safe.

1. Create EBS volume: In the AWS console choose VOLUMES. Create a new volume and attach it

with your instance (that id you noted in step4 above).

2. RDP to your virtual machine with the default password oklgJordv1.

3. aunc t e is mgmt.msc start->run-> iscmgmt.msc . in t e Amazon isc at t e ottom o t is

wizard and follow instructions on screen. Name the new drive as E. Any other alphabet would

require other changes in configuration so name it as E.




78

4. Configuring MSP Center to store data into that drive

1. top enter us.

2. Copy mysql/data and mysql/tmp folders from C:\ProgramFiles\AdventNet\ME\Central\ to

E:\data and E:tmp

3. Start MSP Center Plus.

Steps to restore your installation if MSP Center machine crashes

n case o a server cras you can restore your setup y oing t e o owing

1. Launch a new instance of MSP Center.

2. Go to Volumes tab and attach your volume with the new instance.

3. RDP to your machine and ensure that you don’t format the drive.

4. Open E:\mspconfbacku.bkf and restore it over C:\programfiles\adventnet\me\central\

5. Start MSP Center Plus.

Steps to run MSP Center Plus on Amazon EC2 + EBS + S3

If you feel that even EBS is not so secure you can back up the EBS in S3 so that in case of a failure of EBS

you can restore t e ata into a new vo ume.

Steps to backup your EBS data to S3

If you wish to take a backup of your EBS volume to S3 do the following

1. Go to Volumes tab in your AWS console and CREATE SNAPSHOT.

Steps to restore your S3 snapshot into EBS

t times i your rive ai s you can restore it ac rom t e snaps ot you create in . teps or t at

1. Go to volumes tab in your AWS console and create new volume.

2. Choose the snapshot id from the list.

3. reate.

4. Follow steps to associate the volume with your instance.



2


Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a






competition

16

Journey of messaging and

collaboration tools

Google Apps

Zoho Apps

Google Vs Zoho

Make friends with

SAAS. Resell Google

Apps / Zoho.

Journey of messaging and collaboration tools

I there is one thing that you can always sell to any new

business, that’s E-Mail No company can do without that

I am sure most o you would have tons o experience in

email and messaging tools such as Microsot Exchange

and IBM Lotus Notes These been the de-acto vendors

or many long years But today we have some inexpensive

players with interesting technologies such as Sotware-

as-a-service (SAAS) that oer similar unctionality We

recommend you to take a look at these players and

check i they are the new age email tools or your next

breed o customers

Google Apps

Google oers business e-mail, messaging, document

management, and inormation sharing through SAAS

Google receives 3000 registrations every day or Google

apps and more than a million organizations have regis-

tered so ar Google apps are available in two standard

and premium editions The standard edition includes

only Email & calendar, storage or mails, docs and sites

and oered at ree o cost or individual users and uni-

versities Premium edition includes Email & Calendar,

Email storage (25GB), 999% uptime SLA, docs and

sites, video, storage or mails and docs etc



Make friends with SAAS. Resell Google Apps / Zoho.

80

Benefit of SAAS

Traditional business applications such as Microsot Exchange, Microsot Oice, and Microsot

SharePoint cost more when compared to this SAAS model For example to setup a highly

available email system or your customers it takes $300-$1000 per user per year But with Google

you can get it or $50 per user per year You can make use o SAAS and explain your customers

the beneits that they can gain using it Google has been sending targeted messages to solution

providers asking them to switch rom legacy systems to eicient SAAS based Google apps One

such video titled ecoming a Google Apps Solution Provider is available in YouTube which

everyone should take a look

Zoho Apps

Zoho oers Productivity & Collaboration apps and Business apps as SAAS Productivity &

Collaboration tools include E-mail, docs, chat etc while Business apps include CRM, project




81

management, online database etc Zoho also oers the above services at ree o cost to individual

users and universities and charges $50 per user/year or enterprises

Google Zoho

Word Processor Google Docs oho Writer

Spreadsheet Google spreadsheet oho Sheet

ower o nt resentat ons Google Presentation oho Show

Web Clippings Google Notebook oho Notebook

mail Gmail oho Mail

Chat Google Talk oho chat

Wiki (Google acquired JotSpot) oho Wiki

Database Application oho Creator

n ne ata ase o o

ro ect anagement o o ro ects

e con erenc ng ( oog e acqu re arratec o o eet ng

Customer Relationship

anagement (o o

ersona rgan zer o o anner

Web hosting Google Page Creator --

eed Reader Google Reader --

Google Vs Zoho





2


Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a






competition

17

Stop the leaky bucket

model

Four reasons why

customers switch managed

service providers

Customer survey – a great

tool to retain customers

How to retain

customers?

Stop the leaky bucket model

It doesn’t make sense i you win ive customers every

quarter and lose our As you are building a business

over a recurring revenue model, such leaky bucket

approach o losing customers is extremely dangerous

Moreover, with rising competition and deepening

recession, it is going to be ten times more expensive to

acquire a new customer than to retain one So better

learn how to retain your customers

Four reasons why customers switch managedservice providers

An Adage in Business management is that bad experi-

ences teach you the best lessons That’s why many MBA

case studies ocuses on what went wrong Today, running

a successul managed services business depends on hav-

ing strong partnerships with your customers According

to analysts, the major reasons why customers switch

managed service providers are:



How to retain customers

84

Customer survey – a great tool to retain customers

Though there is no magic to retain customers you can still bet on age old techniques such as

periodic customer survey to gauge their satisaction levels and take remedial actions beore they

disappear Customer Surveys are very essential to identiy customer satisaction, requirements,

demands etc These surveys allow your customers to give their concerns and appreciations on

the services and support you oer The more number o customers praise and the less they

demand rom you, puts your level top in the market and vice versa

Top reasons why customers switch Description

mproper ac ag ng

The irst problem the managed service providers ace is

pac ag ng ey are mere y renam ng t e r

maintenance or outsourcing capabilities rather than

oering genuine managed services Others are creating

comp cate manage serv ce port o os t at con use

potential customers

r c n g

The second issue is pricing Rather than providing a

s mp e ee sc e u e or t e r manage serv ces, many

providers have created complex pricing algorithms that

rustrate prospect ve customers

os t on ng

The third challenge is positioning these services

properly In most cases, managed services are simply

promote as a way to re uce sta an ower operat ng

cos s While these beneits are essential, ew managed

serv ce prov ers can c ear y erent ate t emse ves or

show how they add value to their customers

oor sa esmans p

But the biggest obstacle to selling managed services is

poor sa es s s any manage serv ce prov ers re y

on traditional, transaction-oriented salespeople to sell

manage serv ces ese sa espeop e genera y are goo

at selling relatively standardized products or services

but inexperienced at selling ongoing managed servicere at ons ps at er t an s mp y se ng t e cost

savings o managed services, salespeople must learn

how to convince their enterprise customers o the

potent a us ness va ue o t e r o er ngs







2


Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a






competition

18

Single essential ingredient

Setup a test lab for your

engineers to try new things

How to build a

motivated team?

Single essential ingredient

People are the single most essential ingredient to any

organization’s success and in managed services that is

the number one actor Basically you are converting

a hands-or-rent business into a process oriented and

eicient business and that makes building a dynamic

and eicient team very critical in ensuring success

Most importantly, these cross unctional teams should

unction as one so that they become an extension to the

client’s IT team and not just another company doingsome break ixes The teams should be motivated, agile,

and productive Without setting up this team there is

no scope or success whatever you do





2


Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a






competition

19

Hosted or In-house

Which is better?

Hosted or In-house?

Hosted or In-house

With the advent o SAAS, the key question in everybody’s

mind is this – what should I choose? Hosted solution

or In-house one? We have seen dierent stories rom

each camp and to be honest there are advantages and

disadvantages in each model The SAAS model or

example is a near turn-key solution It takes away most

o the installation and other headaches but gets very

expensive as you grow

See the table below, it’s the pricing sheet by a Hosted MSP vendor (securemycompanycom)

Now, let’s compare this pricing with an in-house sot-

ware vendor such as MSP Center Plus The annual out

go or you or these solutions would be as given below



Which is better? Hosted or In-house?

90

Ver ict : Start with hosted solutions to test the market and then move to packaged sotware

as you grow beyond 100 devices

# devices Securemycompany.com MSP Center Plus

5,970 1,250

1 10,752 2,500

22,380 5,500

35,820 10,500

1 59,760 18,000

149,400 37,500

298,800 62,500



2


Current trend in

Managed services

Who should

become and MSP

Why do MSPs have a






competition

20

Disparate tools Vs

Integrated MSP Platform

Integration is the way to go

Which is better?

Multiple tools or

integrated tool?

Disparate tools Vs Integrated MSP Platform

Most MSPs don’t think long term and start using

disparate tools or every need This chaotic behavior

ends up in reducing productivity o the teams and

also hampers growth That’s where integrated MSP

platorms such as MSP Center Plus score high These

platorms oer all the essential remote management

unctionalities in a single UI



Which is better? Multiple tools or integrated tool?

92

Criteria Multiple tools Integrated tool

ost

igh

Costs more as you buy

more too s

ow

Costs less as you buy a

s ng e too

ata ntegrat on

acks data integration ata

is spread across multiple

oo s an o ten resu ts n

inormation silos

Data is integrated asy

o access

me to reso ut oninding resolution consumes

more t meess t me consum ng

ser exper encer ng unp easant as t e

ser have to use multiple UIs All under single UI

Control o ontro as t ere s any record o who did what

omp ete contro as userslogin to the same UI

Integration is the way to go

Integrated oerings are not only COOL but are inexpensive and oer excellent productivity and

less hurdle in maintenance than a mix o tools





Unleash the MSP in you.

Good luc k.



www.mspcenterplus.com

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DISCLAIMER: ZOHO Corp. ManageEngine makes no claim on the accuracy of the vendors’data as they are based on the information available on the web. We recommend that you

establish authenticity by directly verifying with the vendors.



