Service providers unite
A new breed of companies called management service providers (MSP) has emerged to address the needs of companies looking to outsource network infrastructure management in light of the current IT hiring crunch. IDG caught up with Linda Shannon-Hills, a HP official who has been named to head the MSP Association, a new forum for msps and their suppliersIDG: What exactly will the MSP Association do?
Shannon-Hills: Help educate and make the industry aware of what MSPs are, and the value and benefit they can provide to customers; create best practices; set some standards; look at the MSP industry's direction; and do research and share this information. We'll look at [technology] functions that there needs to be - like providing a tool to allow the MSP to put a portal on a customer site and customise it for reporting on the performance of the customer's system. [The portal could be used to] provide business reports and tell customers what kind of sales transactions they are getting from their Web-hosting server and things like what the hit rate was.
How do you define an MSP?
It delivers IT infrastructure management services over a network to multiple customers on a subscription basis. An MSP can provide security or storage management, which may not be an application but a best practices method, and the technology resources [enabling it]. Potentially, [MSPs may offer] service-level agreements and service-level management, as well as other process improvements.
All MSPs have to utilise the infrastructure of the Internet to provide service. In some cases, we've got partners that have been doing it more than two to three years without calling themselves MSPs.
Are you finding customers confused by having another SP' acronym out there?
There's ISP, ASP and what's the new xSP of the week? That's very confusing for the customers, and the analysts are trying to better understand so they can help guide their customers.
Why has the MSP come along now?
The utility model has just taken on a lot more interest. And the capabilities of the Internet have helped.
What does the emergence of MSPs mean for management application software vendors?
There's an opportunity for a lot of partnerships. We [application vendors] bring the technology to the MSPs, and they bring the best practices and resources to the customer.
Do MSPs compete with in-house IT staff?
The MSP helps allow an IT staff to focus on a higher level of development for its business organisation to be more competitive. The MSP takes on the role of handling the day-to-day operational tasks, providing the IT staff with the information to make business decisions. Many companies are struggling to get the resources to effectively do this.
Are there particular types of customers drawn to MSPs?
I'd say the primary area is going to be midmarket, but there's growing interest by small companies and global ones. [Interest from] financial institutions has been very strong; we've also seen a lot of dot-coms and start-ups because of the low entry [price]. To set up an IT department or continue to expand it and stay up on the technology is in some cases a high capital expense. [With an MSP] there's reduced risk - if they sign up for a one-year contract and it doesn't work out, they can easily switch to another company. They get a quick return on the investment.
Small to midsize businesses might even adopt multiple MSPs, whereas the global companies might just take a segment of their IT and partner with an MSP.
Where are customers finding the biggest need for MSPs?
It's across the board: performance, network and system management, and storage. There's also some interest in security. It's still new, and there's a lot of opportunity to grow.