Servicing the small and midsize business market

Last week, Steve Hultquist wrote about how outsourcing makes a lot of sense for small and midsize businesses, as well as large enterprises. This week, I’d like to elaborate on the subject by introducing an “xSP” business model that I think makes an incredible amount of sense for the SMB market.

This subject is near and dear to my heart as I myself work for an “S” company that’s not large enough to justify a full-time IT resource. In fact, we’ve had a number of full- and part-time IT resources as well as managed service providers (MSP) in the past, with very mixed results. The fact that a fully loaded IT resource costs between $5,500 and $6,500 a month makes this an impossibility for many businesses, and these costs do not take into account the associated hardware and software acquisition costs that go along with the “do-it-yourself” model.

The pure application server provider (ASP) business model has fallen in and out of grace over the past few years. CRM, messaging, and Web hosting are very good applications for the ASP model but the problem with this approach in the SMB market is that too many of these customers need a full “soup-to-nuts” solution. They want an MSP to manage their internal infrastructure, including desktop PCs, network, phones, and the like, and they want a single point for support. What’s really needed is a blended MSP/ASP (MASP?) – and that’s exactly what’s beginning to emerge.

Think about it: If you are starting a business from the ground up, the last things that you want to spend your precious start-up funds on is a pile of servers, desktops, phones and network equipment. Plus you’d have to invest in the software that runs on it all and budget $70,000 a year to manage it. This is a perfect outsourcing opportunity – if you could find someone that could provide turnkey IT services for a fixed price per user, for considerably less than doing it yourself, it would be a no-brainer, right?

That is exactly what is happening. One company that I am becoming familiar with is JustConnect (http://www.justconnect.com). JustConnect seems to have figured out the right combination of ingredients to provide turnkey IT for SMBs: a Citrix-based desktop environment combined with virtual storage, Exchange hosting, VoIP telephony, and the ability to function as an MSP for your network infrastructure and on-site desktop PCs. JustConnect will also manage all the supporting hardware residing in its data center. Add to that a 24-7 helpdesk that handles every IT-related issue from network connectivity through Microsoft Office questions, and you have a winning combination.

I don’t know if this is a coincidence or not (probably), but a couple of years ago I had a conversation with Citrix CEO Mark Templeton, in which I told him that Citrix is missing a huge opportunity in the SMB space – an area that it has not traditionally addressed (and which is a perfect application of its technologies). I do a lot of work with Citrix and am very bullish about its solutions, and I am encouraged that Citrix and Microsoft have worked out their channel licensing in order to support this type of business model.

In the process of evaluating JustConnect (we are considering its services here at Enterprise Management Associates), I ran a quick cost justification, comparing our existing IT-related capital and operational expenditures against the full JustConnect service (except for VoIP phones). My calculations showed that JustConnect will conservatively save us around $800 in “hard dollars” per month, and that’s not including numerous soft benefits such as increased productivity through better uptime and higher levels of IT service quality (not to mention the fact that I will be able to sleep at night!).

If you know of other companies that are providing similar services, or if you have had experience with JustConnect or a similar MASP, I would love to hear from you. My e-mail address is mailto:mehr@enterprisemanagement.com. Thanks for reading.