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What’s wrong with managed services?

Apr 27, 20063 mins
Managed Cloud ServicesNetworkingWAN

* Why are users reluctant to let go and opt for managed services?

In the last newsletter, we discussed an emerging class of appliances that is designed for patch management. The idea is simplicity itself: Rather than having to apply a plethora of patches immediately to all of your servers for the latest security (or other) coding flaw, simply filter the traffic so that you identify any traffic that would be affected by the patch and apply the remedial fix before the traffic ever gets to the server. The result is better network performance, coupled with buying time for applying the patches in an organized, rational fashion.

This got our thoughts racing… Wouldn’t it be cool if service providers offered this same type of patch management as a part of a managed service? Seems as if this would be especially useful for the small and midsize business market where the staffing doesn’t necessarily exist for keeping up with every patch for every product that has a flaw. Instead, the service provider a) applies the appropriate patch and b) lets the customer know if and when a patch is truly needed.

But there seems to be a fatal flaw here.

In spite of all of the excellent reasoning behind moving to managed services, most users seem to be slow to adopt them. In fact, the general feeling that we get is that most users are really digging in their heels against using managed services.

There are a couple of relevant data points. For an overview of the positive points of using managed services, especially for tasks like IP telephony and security services, Cisco offers an excellent Webcast that promotes the idea. On the other hand, when we asked users what they thought about using managed services for IP telephony as part of the 2005-2006 Webtorials VoIP State-of-the-Market Report, 75% of the respondents reported that they either “definitely” or “probably” would purchase and operate their own equipment.

We’d really appreciate your help in our understanding this. Why are users so resistant to moving away from the BYOB (Be Your Own Bell) days when there are many levels on which managed services make a tremendous amount of sense? Is it job security? Is there still a fundamental mistrust of the service providers? Is the pricing wrong? All of the above? Or something that we’re completely missing?

We’ve started a thread for you to provide feedback and to chat with each other at Webtorials. Let us know what you’re thinking, and we’ll share a summary of the comments here.

Jim has a broad background in the IT industry. This includes serving as a software engineer, an engineering manager for high-speed data services for a major network service provider, a product manager for network hardware, a network manager at two Fortune 500 companies, and the principal of a consulting organization. In addition, Jim has created software tools for designing customer networks for a major network service provider and directed and performed market research at a major industry analyst firm. Jim’s current interests include both cloud networking and application and service delivery. Jim has a Ph.D. in Mathematics from Boston University.

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