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MANAGEDSERVICES 707Many colocation vendors now offer managed services
in reaction to the success of the MSPs, some of which
were acquired by the colocation vendors. But for years,
although customers screamed that they needed such help,
colocation vendors simply could not provide managed ser-
vices themselves. The reason comes back to a recurring
issue: The skills that are required to provide good power,
pipe, and ping (colocation) are very different from those
required to support and manage servers and applications.
Even the cultures of such organizations are very different.
(Just imagine calling a phone company’s service center for
help with a database performance problem, to understand
the difference.)MSP Segmentation
When we covered shared, dedicated, and colocation Web
hosting, we were able to further break down those clas-
sifications into subcategories. But because of the relative
newness of the managed service business, the breakdown
of vendors and the definitions of services are not as precise
or as widely accepted as with shared, dedicated, and colo-
cation hosting. The jargon has not yet stabilized, and an
extraordinarily wide range of companies now call them-
selves MSPs.
So rather than create categories that are not already in
use in the MSP industry, our approach will be to identify
the raw criteria that distinguish one MSP from another.
The criteria we explore include the following:Flexibility.Some MSPs support a very limited (rigid) set
of software and hardware products, whereas others are
quite flexible in this regard. But as we will see, flexibility
is not necessarily a good thing.
Facility neutrality.Some MSPs own their own data cen-
ters, whereas others areportableor data-center inde-
pendent.
Service levels and pricing models.MSPs offer different
levels of service and use pricing models that range from
time-and-materials to flat-rate (component) pricing.We will examine each of these criteria in more detail
and discuss how to select an MSP.Vendor Flexibility
The first MSPs approached the task of managing Web sites
in much the same way as the classical IT staff outsourcers.
They simply provided a staff that was skilled in Web op-
erations on a professional services basis and billed by the
hour. Such MSPs still exist and are referred to here as
flexibleMSPs, for reasons that will become clear shortly.
Other MSPs recognized, however, that they could
achieve certain economies of scale, and perhaps even offer
services of superior quality, by standardizing on a specific,
limited set of hardware and software products and repeat-
able processes and procedures to support those products.
These are referred to asrigidMSPs (“rigid” is not a deroga-
tory term, and it is the best word to describe this class of
vendors). There are advantages and disadvantages to both
the rigid and flexible models, and there are MSPs at all
points in between, as illustrated in Figure 5.Rigid
Packaged
Lower Cost
Product Model
"Their way"Flexible
Customized
Higher Cost
Services Model
"Your way"
Figure 5: Rigid versus flexible MSPs.The Flexible Model
At one end of the spectrum, fully flexible MSPs are es-
sentially contract-staffing organizations that will support
any technologies, hardware, platforms, and applications.
They are in the professional services business, providing
system administrators, database administrators, and oth-
ers either on a full-time (dedicated) basis or on an on-call
basis and shared with other clients.
Most flexible MSPs add additional value in two ways.
First, they tend to specialize in certain technologies, ei-
ther companywide or by employing individuals with spe-
cialized skills and experience. Second, they implement a
variety of processes and systems that are shared by all
of their customers. These systems include monitoring a
Web site’s uptime and performance, as well as customer
resource management (CRM) components such as call-
center and incident-tracking systems.
The general approach of a flexible MSP is to provide
servicesthe customer’s way, and to try to function as an
extension of the customer’s own in-house staff. The pri-
mary advantage of working with a flexible MSP is that
customers can build their Web sites using any hardware
and software. If they want to use an application developed
by ABC running on servers made by XYZ, no problem. If
it is a combination the MSP has never encountered be-
fore, it will ramp up on it, and do whatever is necessary
to make it work.
But the real benefit of using a flexible MSP shows
up later, when customers decide to enhance their sites
by adding new features and systems that they could not
have anticipated at the time they selected their MSPs and
designed their initial configurations. If an organization
tends to live on the cutting edge of Web and Internet tech-
nologies, it might do well to work with an MSP that can
commit to this type of flexibility.
Of course, flexibility does not come without a down-
side. As we will see, more rigid MSPs can sometimes
achieve higher levels of efficiency and reliability due to
their focus on repeatability and scalability. Although a
flexible MSP can and will do whatever customers need,
it may cost more in dollars, time, and reliability.The Rigid Model
“Do one thing—but do it better than anyone else,” could be
the mantra for the more rigid MSPs. By limiting the num-
ber of hardware and software technologies they support,
they can do a better job than if they had to spread their
resources across a broader range. This is not marketing
fluff, but a very real advantage of this model. By doing the
same things day in and day out, and creating economies
of scale, a rigid MSP can simultaneously improve quality
and keep costs down.
By working with a rigid MSP that is committed to a
predefined and limited set of products, the customer not
only shares staff with other customers (which is the case