From PC Repair to Network Support
I’ve been in the computer industry for more than 15 years. The punchline I’ve used for many years is that my dad always had a computer around the house. I would tinker with it enough to break it, so I had to get very good at fixing it before he got home from work on any given day.
Changes in my career, generally, have been the result of my advancement in the industry, not changes in the industry itself.
[Quick history: I started by fixing friends' and family's computers. I got my first real job building and servicing PCs at PC Systems in Delray Beach, FL before I could even drive. Next, I started my first company, Byte Technologies, doing small office/home office network setups in West Palm Beach, FL. Then, I moved on to IKON Office Solutions as one of their Sr. Network Engineers. Finally, about eight years ago, I started Steinhoff Consulting , which was renamed DedicatedIT earlier this year.]
Network Support was Changing
Just like in any industry, changes do happen. Most changes are small, however. Around 2003-2004, there was a major shift in our industry to augment standard, ‘break-fix’ services with proactive, fixed-fee ‘managed services’.
The biggest benefit to technology companies was the predictable income that a monthly contract allowed. For the first time, it allowed us to budget our expenses, fuel regular growth and staff up appropriately. Our clients appreciated the fact that response times could now be guaranteed, that we had the ability to provide remote support – that didn’t require them to push all the buttons for us – and that we were able to collect more detailed information about their systems than we had been able to before.
Growing Pains and Identity Crisis
It was 2005 and, by this point, many of us staffed up to handle our new model of business and started calling ourselves ‘Managed Services Providers’, even though we still provided break-fix services. It created a confusing message to our prospects and clients, and worse yet, our employees.
A sales person, meeting with existing clients, was trying to convert them from break-fix to managed services. He would present all the wonderful reasons to change to this new managed services model; awesome response times, access to some of the best network engineers in the area, nearly instantaneous remote support, and much, much more! [Act now, and you get the slicer and dicer, too!]
The clients looked at him with confusion and would point out that, “I already get all that, why would I change?”
They were right. Unfortunately, it took another three years for me to fully understand the problem and another year after that to have the guts to actually fix it properly and finally.
RIP: The Death of Break-fix Network Support
The problem was that we were incurring the much greater expense of running a managed services business, yet providing the benefits to all clients regardless of whether they were under official contract or not. We would justify it numerous ways: ‘They’ve been a client forever’; ‘We just need to prove the value to them, and they will sign a contract’; ‘just this once’ ; and the longest hold out – ‘they have a server down, and it’s an emergency.’
Even though we wanted to provide the benefits of managed services to all of our clients, running our business this way was just too costly.
Are we Nuts? In this Economy?
It’s really hard to say, “No’, I can’t send someone out there”, to businessman who does have an emergency with a primary server down. It’s especially hard, when the client is willing to pay nearly anything to get the server back up and running. Depending on how critical the issue was, the cost usually was much more than what the contract would have cost them… not to mention that, most likely, the client would not be in this situation in the first place if we were managing the network.
In early 2009, DedicatedIT decided that it would phase out all non-managed services clients and began saying “no” to, what used to be, perfectly good business for us.
Are we nuts? Time will tell…
We can tell you that sales and marketing messages are much more clear, stress levels are down and net income is up.
I’m sure glad you’re not in charge of health care:
“Gee, I’m sorry Guy With Gun Shot Wound, I’m afraid we can’t admit you to the emergency room because you haven’t been to see your primary care physician in the previous year. Yes, I understand you’re willing to pay whatever it takes to remove that slug from your chest but we’re really not interested if you’re not already a patient. Would you please remove your bloody corpse from our lobby?”
Cheers,
Matt
Your emergency room analogy, while attention-getting, doesn’t work.
Let the guy with the gunshot wound go to a place that makes a practice of treating gunshot wounds.
I was in a doctor’s office the other day when a bunch of EMTs rushed in to haul out a patient who was suspected of having a heart attack.
My doctor didn’t hand him off because he wouldn’t pay. He looked at the patient’s symptoms and made the decision that he needed treatment different than what that particular office was designed to handle.
DedicatedIT isn’t obligated to fix that self-inflicted server crash. Too many of the customers who came running in with a crisis ignored network assessments that would have kept the crash from happening.
Some days you can run with a stick in your hand and not get hurt; some days you poke an eye out.
If you keep responding to those I-poked-my-eye-out calls, then you either have to staff up to handle the peaks and valleys or you neglect your contract clients. Either way, you encourage bad -and unprofitable – behavior by dropping everything to bail out folks who aren’t your managed service customers.
You are making the assumption that fixing things which are broke is always unprofitable or that DedicatedIT is unable to fix the sorts of computer problems clients experience.
DedicatedIT clearly has the ability to fix things that get broke as they have been doing it for many years. I’m, sure DIT has references (or at least marketing materials that say just that.)
The only complaint I’m hearing is that fixing things is unprofitable for DIT.
That’s a pricing problem, not cause for paradigm shift.
Cheers,
Matt
ksteinhoff,
Case in point. I got a call this past Monday from a company who really needed our service. Not only had we provided them a report with all of the things that were wrong on their network (backup was one of them), but they had signed the contract to begin our monthly Core+ service. We didn’t officially started the service, because they hadn’t mailed in the first check yet. Actually, it was four months later, and they hadn’t mailed the check.
They just couldn’t find the cash flow.
Oh, right. Back to the call.
Their Exchange server was down and they wanted us to run over to help them out. I respectfully declined, because they would not commit to beginning our service, they way we had agreed back in August, by providing me a check.
I don’t know what they did or if they lost any data, but I know that they were still down six hours later when I called for a follow-up.
If Mystery Potential Client has said, ‘we have a briefcase with $250,000 in small, unmarked bills in it for you if you can get our Exchange server back online within 48 hours’, would you have accepted their offer and fixed their Exchange server?
If so, the problem isn’t your business model, it’s your pricing structure.
Or, to put it another way, I know what you are, we’re just negotiating price.
Cheers,
Matt
Matthew,
I would have helped. That $250,000 would have set them up on our premium support package, paid in full, for three years. They would be one of my favorite clients.
If you’re ONLY an MSP you owe it to your current clients to not go off on side projects taking away from the time you should be with them! Screw the gunshot wound guy because you already have patients to take care of. Imagine the guy with the gunshot wound- deserved it, he will live through it, and maybe next time he’ll be more careful
Wannabe MSP,
The gunshot analogy is pretty accurate. However, I’d put a spin on it a little.
If someone else (a ‘competitor’ who didn’t do a good job) shot the person, I’m in there in a jiffy to mop up the mess and help my potential client out of a jam. I chalk that up to sales engineering time. Luckily for us, all of our sales people, at this time, have technical backgrounds. You fix their problem AND have a sales meeting at the same time.
Now, if he shot himself in the foot (we came running once for a problem, we had meetings explaining the benefits of our program, and they still elected to ‘pay by the hour when something breaks’), they better have a signed contract and a check in hand when we show up, or I will refer them to someone else.