Monthly Archives: April 2016

break-fixThe break-fix model is out of date; staying with it means falling behind the competition. So we look at the benefits of moving your business to an MSP model instead.

The IT business is famous for its convoluted language and ever-changing buzzwords, but the essence of the break-fix model adopted by so many IT channel partners is as simple as it ever was – wait for something to break, then get called in to fix it.

Is this really the way forward? The problem, fundamentally, is that no matter how diligently a break-fix company delivers its reactive-only services, the fact that they are reactive-only immediately puts them in the lower branches of the service quality tree.

In short, to move their services up the customer value chain and make them more profitable, break-fix companies have to go proactive instead, preventing the breaks before the fix is even needed! And that means changing to the MSP model.

Here are a just a few core MSP benefits that decisively trump the old-world break-fix approach to doing IT business.

Predictable, recurring revenues

Think billing customers hefty amounts for break-fix intervention is profitable?

Think again. Break-fix is an expensive service to deliver because you can’t predict when something will go wrong. This means multiple ad hoc scrambles to deliver services for which the associated labour and time costs are notoriously hard to estimate and control.

Make no mistake, break-fix renders cost and budget planning almost impossible, and so can quickly turn out to be a drain on the business.

(In fact, for an entertaining tour through no fewer than seventeen separate reasons why break-fix is a bad idea, read this piece from MSPAnswers.com.)

The MSP model, on the other hand, generates a reliable, recurring monthly fee, enabling predictable cash flow month in, month out, and with no requirement for customers’ systems to break!

Ultimately, this supports the planning process that underpins business growth – if you know how much your costs are each month, you know how many contracts you need to bring in to turn a profit.

It’s a far cry from waiting for something to go bang and then frantically working out how much you need to charge the customer for it to cover the lean weeks of recent times and those yet to come!

Higher-value customer relationships

Your core differentiator, as an MSP, is that you are not paid to fix the customers’ systems, you are paid to monitor them and prevent issues from taking hold in the first place, using, for example, RMM (Remote Monitoring and Management) tools, like this one. and PSA (Professional Services Automation) tools, an example of which is shown here.

What this in turn means is that you are no longer relying on your customers to fail in order for you to succeed; this positions you as a “trusted adviser” and enables you to forge stronger business relationships with them.

These stronger relationshjps pave the way for you to expand your service offering, grow those all-important monthly revenues (and the margin you’re making on them), and they also make your customers more likely to recommend you to other prospects!

Lower staff costs, higher productivity

The much-vaunted “single pane of glass” – a portal or console that enables you to easily onboard and manage devices, customers and users, no matter how many of them there are – is now a firm reality in the MSP universe.

Consequently, it takes far fewer staff to manage customers’ systems, which in turn delivers higher productivity at much lower cost. Needless to say, the same console can typically be used to deliver additional services to existing clients, on demand, instantly swelling your revenues and binding your customers closer to you.

Stops you cutting your own business’s throat…

With traditional break-fix services, the only way to make money is if something goes wrong. This is a double-edged sword; the danger is that if you do your job too well, you’re out of business (as if to reaffirm this, insolvencies amongst IT and communications companies rose by 22% at the end of 2014, compared to the previous year, according to research from Exaro).

Don’t do the job well, however, and the customer will soon see through it and be off consulting another provider.

With the MSP model, of course, all of this ceases to be an issue, because you are measured on your ability to monitor and to prevent disruption, not on your ability to clean up a mess once it’s already happened. You’re delivering a service that is always on and always revenue-generative, not sporadic correctives that temporarily plug urgent holes in your cash flow!

In conclusion: tips for moving from break-fix to MSP

Nobody’s suggesting moving from the break-fix model to the MSP model is painless – it isn’t (not least because you’re actually moving from one mentality to a fundamentally very different one).

But the Web is well stocked with helpful articles (like this one) calling out the essentials, others (like this one) giving more detailed advice on how you should actually price your MSP services, and discussion forums (like this one) that share the experiences of companies that have already made the transition.

Break-fix is broken. Talk to an MSP vendor about it, talk to an MSP distributor about it, talk to an MSP customer about it, but talk to someone, and soon.

Otherwise the next thing that breaks could be your bottom line.

Why Backup is not Business ContinuityBusiness runs on data, but how many businesses have acted to actually protect their lifeblood if and when disaster strikes?

Only about 35% of businesses have data backup in place, and at the SMB end of the market, some 75% of SMBs have no disaster recovery plan at all.

This is playing with fire. According to this article, 58% of small businesses couldn’t withstand any amount of data loss whatsoever.

It’s a revealing statistic, because it hints that the challenge is not only in backing up the data somewhere safe, but also in reinstating it to enable the business to “withstand” the outage, and get the wheels turning again.

That, in a nutshell, is the difference between data backup and disaster recovery (often termed, somewhat loosely, business continuity, as I’ll explain later) – and here’s what SMBs should be focusing on to get their data disaster ducks in a row!

Speccing the Backup Process: Recovery Point Objective (RPO)

How much data can an SMB afford to lose before it starts to damage their business?

This is the critical question SMBs need to answer, because it is this RPO (Recovery Point Objective) calculation, explained in more detail here, that informs all elements of the data backup process.

How often do backups need to be performed? (Every hour? Every minute?) What volumes and formats of data need to be involved, and what kind of data backup system or service partner can achieve this?

Evidence suggests this is where smaller businesses really struggle, as 71% of UK SMBs, according to research from Onyx Group in this article, only manage to back up part of their data.

It seems that limited bandwidth, mixed IT environments (Windows/Unix/Linux) and disparate file formats conspire to reduce the scope of the RPO, and so dilute its effectiveness as a measure of true backup capability.

The value of the RPO is also diminished by the realities of where the data is being backed up to.

Locally? The fire that took out the core systems just took out the backups, too!

The cloud? Data backup is just as vulnerable to the potential limitations of the cloud as any other service is. How will the data centre be powered in the event of its own outage, and for how long? Is it covered by EU data regulations, and certified to industry-recognised standards like ISO 9001 and ISO 27001? And how secure are the data centres it “mirrors” to, to back up the backups?

Tape? Inherently RPO-unfriendly (you can’t very well create and send off a new tape every hour!), it is also cumbersome and expensive, often funded by an insurance policy and requiring a full-time employee just to manage it. (Read this article, written by one SMB owner, explaining how he improved his disaster recovery capability by getting away from tape!)

The process of deciding on the RPO can expose far greater backup shortfall than the SMB has thus far been forced to confront!

Getting back to business: Recovery Time Objective (RTO)

But the most demanding RPO in the world will only ever address one side of the business continuity equation – the need to back the data up.

The other, equally crucial side of the equation is being able to get to that backed-up data, reinstate it into the organisation, and rapidly rebuild any of the infrastructure that is needed to make it work.

The speed with which this can be achieved is called the Recovery Time Objective (RTO), and is usually set by working backwards from how much a data loss would cost the company (by adding up the average per-hour wage and overheads of the employees who need to work with the data, and the per-hour revenue).

Hardware, physical media and software issues can all mess with the RTO. Imagine you’re an SMB, and all your data is backed up to a physical tape at an offsite location somewhere, that has to be manually shipped back to you before you can reinstate it. #RTOfail

Or imagine you’ve successfully saved all your critical files to your backup service, but you haven’t saved any system images – so the accompanying settings and system data that you need to make the files quickly work again are missing. #RTOfail

Or imagine you’re doing all your backup locally and the hardware that does the backup breaks down, so you first have to repair or replace the machine(s) before you can get to the data – if indeed you then can at all! #RTOfail

What’s emerging here is that no one approach necessarily delivers maximally RTO-friendly use of backed-up data. Instead, a combined strategy can often work better, to minimise the risk in each component of the approach, and deliver:

  • Local, image-based backup that is complete and rapid to recover
  • Rapid replication to and from the cloud through bandwidth-efficient streaming that only transmits changes, not entire datasets
  • Instant local and cloud virtualisation, to vastly reduce the risk posed by fault-prone hardware and cumbersome, inaccessible physical media.

SMB backup and recovery budgets are often meagre. So when the chips are down, the data’s gone, and it’s time to pull business continuity out of thin air, the ability to recover, say, a 70Gb SQL server in a few seconds flat, in return for a modest monthly fee, is a big shout in favour of the cloud.

Summary: Disaster Recovery vs. Business Continuity

Of course, it’s not just using the right tools to meet the commitments of RPO and RTO that will help ensure business continuity. It takes a much longer-term view than that, embracing succession planning, recruitment, supply chain management, and a whole host of human skills to which technology is only peripheral, as this piece explains.

But the facts stand. Backing up data “somewhere safe” is useless unless it’s achieved at sufficient frequency, with sufficient comprehensiveness (system images and data formats), sufficient ease and speed of reinstatement, and with a high degree of freedom from the weaknesses of hardware and physical media dependencies.

There’s a marketable SMB cloud solution in there, somewhere…