Former MSP Association shuts down

Last week the Strategic Sourcing Advisory Council, formerly the MSP Association, announced that it was ceasing operations. It was apparently another victim of the economy, because its members had to deal with staff reductions and revenue issues at their own companies, leaving little or no time for SSAC work. Does the demise of the SSAC indicate an end for outsourced management services?

There was much hype about the management service providers (MSP), and the reality didn't turn out as lucrative as many service providers, investors and vendors had hoped. However, there is still a place for management service providers - maybe not as large a market as some had prognosticated, but nevertheless some firms have opted to use them.

The mistake of some prognosticators was that they assumed this was a new paradigm that would take over a majority of IT management, when the more reasonable assumption was that it would be used selectively and as a supplement to IT. Another mistake was that service providers would be universally accepted - that's where the market projections failed.

One interesting result of the service provider hype was that internal IT organizations realized that they had to improve their customer service and operations to compete effectively. Businesses now had an alternative to doing everything in-house. But although the first reaction to service providers may have been competitive in nature, IT should also have realized that this was an alternative to providing services to the company without the overhead of implementation and staff training.

Some IT organizations jumped on that opportunity and have outsourced selected functions that made sense for them. Others have opted to outsource a lot of their IT needs. So it seems that although outsourced management services are not for everyone, there is still a need out there. One thing is for sure: there has been a lot of flux in the outsourced management services area.

I recently heard from a reader who decided to outsource all of his IT functions and has found it to be very cost-effective. The costs are predictable, and the company doesn't have to worry as much about keeping its management infrastructure updated - the service provider handles that for them.

One approach to outsourced management that has survived is in the form of BMC Software's Patrol Express, a light version of Patrol that can be used as internal software or in an outsourcing model called Guardian Angel.

Also, I recently spoke with a customer of Micro Outsource. About two years ago, the customer decided to use Micro Outsource's service desk. The company liked the fact that the service desk was Web-based, which made it easy for users to log their own service calls. The users also have the ability to check the status of their service calls, which has reduced the number of calls to the service desk. According to this customer, "The phone doesn't ring as much anymore." There's no maintenance and no Web page updating, the service desk is helpful and responsive, the prices are stable, and, the customer claims, the time and money savings are "significant."

It looks like outsourced management services are still alive, despite the demise of the SSAC. Just like selecting any management tool, the decision to use management services depends on the needs of your company, the application or functionality needed, the provider of the service and how it fits into your company. It's simply another alternative.

Dennis Drogseth is a director with Enterprise Management Associates, a leading analyst and market research firm based in Boulder, Colorado, focusing exclusively on all aspects of enterprise management. Dennis has extensive experience in network management platforms and products and is researching trends in management software and changing IT roles internationally. His 18-plus years of experience in high-tech includes positions at IBM and Cabletron. He has been quoted in the press and is a speaker at industry events. He can be reached via e-mail.

Audrey Rasmussen is a research director with Enterprise Management Associates in Boulder, Colorado, a leading analyst and market research firm focusing exclusively on all aspects of enterprise management. Audrey has more than 20 years of experience working with distributed systems, applications and networks. Her current focus at EMA is e-business, SMB/SME and MSPs. She can be reached via e-mail.

Enterprise Management Associates in Boulder, Colorado, is a leading analyst and market research firm focusing exclusively on all aspects of enterprise management software and services.