The MSP Model fails more often than not.
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The only times that I see the MSPs not having the same knowledge that internal IT does is not MSP vs. Internal but always a business that keeps the MSPs at arm's length and doesn't bring them full time in house like they would with internal staff. By treating them differently (french fries vs. onion rings) they force them to be different. But when treated the same, the same benefits apply.
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@scottalanmiller said in The MSP Model fails more often than not.:
@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Carnival-Boy said in The MSP Model fails more often than not.:
Where I think that an MSP can work is as an additional resource for the internal IT department. We employ different IT companies to assist us, either when we don't have time to do the work ourselves, or where we lack the skills required for specific tasks and projects.
In most cases, I don't agree with the concept of replacing an internal IT department with an MSP, but utilising one (or more) to work alongside an IT department is great. You get the best of both worlds.
So what is the specific value of having an internal person in that (or any) case? You say the best of both worlds, but in all my years of IT, I've never seen any upside to internal IT (as a structure, the people themselves can be great.) The MSP can have the same on site presence, the same full time focus, more concern and ties to the business success... I'm not aware of any benefits to being paid by the business as an IT pro, only negatives. What benefits do you see from the payroll and management not being IT?
Our Payroll is handled by a third party, but it's service we pay for, it's flat rate. Of course if we want more services, we just make a call and they are instantly higher than they were before - perhaps that is what @scottalanmiller is saying, the MSP is sending the employee back to the company at a flat rate, granted it's a flat rate that is probably higher than if the employee was internal, but that extra money pays for a different person to come onsite when the main guy is on vacation, etc.
The term MSP indicates flat rate. We are using it loosely here to mean "any service provider", so flat rate is not the only option. But the MSP portion of the SP spectrum is flat rate.
Flat rate as in hourly based on the number of hours worked? or flat rate as in - salaried - exempt?
Flat rate, period. Meaning the contract is for $100/month, every month, regardless of service. There would always be something that designates when that would change. Most commonly it is based on number of employees.
I guess I have worked for an MSP that did that in the past - though I wasn't part of that assigned to a single customer, I was a consultant, dancing from client to client as needed.
The others (most of whom were AS/400 developers) did work at single clients, and as far as I know, they rarely if ever talked to any of the other MSP employees - instead the only difference they saw was that their paycheck was signed by the MSP, and the other internal staff at the client was signed by the client. Oh, Also, when the MSP employee took vacation, the MSP did not replace them with someone else, I'm guessing instead the client just didn't pay the MSP for that time. Is this a sign of a poorly setup/run MSP? i.e. not letting their employees know of the other uses so they could use them as a resource?
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@scottalanmiller said in The MSP Model fails more often than not.:
How does the internal IT people get that knowledge in a way that the MSP would not do identically? Two people, same role, same seat, same business - they'll get the same business knowledge.
And why wouldn't internal IT get the same IT knowledge that the MSP would - two people, same role, same access to MSPs for advice, help and training. You just seem to keep going round and round saying MSPs are better but not really explaining how. On the one hand you say MSPs are different (and so better), on the other hand you say MSPs are exactly the same (as so no worse). It's like having your cake and eating it. If you can only see upsides to MSPs and no downsides, then I can't really say anything else, I'm afraid.
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I would argue that it's possible that the MSP know more about business than internal IT. Think about it - the owner of the MSP knows tech and knows how to run a business because they are running one. The MSP also has the advantage of knowing what other companies are using and what's working and what's not. The internal guy has to work really hard to find that information out, but at the end of the day since the internal guy doesn't run a business, they may not know what the MSP owner does.
Another issue is that when people specialize, costs go down. The internal guy can never specialize because they have to be the jack of all trades. Just think of the time you invested learning about something like deploying a RDP server. The MSP has that same time investment once, but then can deploy it a number of times. That knowledge and experience saves time and money.
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@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Carnival-Boy said in The MSP Model fails more often than not.:
Where I think that an MSP can work is as an additional resource for the internal IT department. We employ different IT companies to assist us, either when we don't have time to do the work ourselves, or where we lack the skills required for specific tasks and projects.
In most cases, I don't agree with the concept of replacing an internal IT department with an MSP, but utilising one (or more) to work alongside an IT department is great. You get the best of both worlds.
So what is the specific value of having an internal person in that (or any) case? You say the best of both worlds, but in all my years of IT, I've never seen any upside to internal IT (as a structure, the people themselves can be great.) The MSP can have the same on site presence, the same full time focus, more concern and ties to the business success... I'm not aware of any benefits to being paid by the business as an IT pro, only negatives. What benefits do you see from the payroll and management not being IT?
Our Payroll is handled by a third party, but it's service we pay for, it's flat rate. Of course if we want more services, we just make a call and they are instantly higher than they were before - perhaps that is what @scottalanmiller is saying, the MSP is sending the employee back to the company at a flat rate, granted it's a flat rate that is probably higher than if the employee was internal, but that extra money pays for a different person to come onsite when the main guy is on vacation, etc.
The term MSP indicates flat rate. We are using it loosely here to mean "any service provider", so flat rate is not the only option. But the MSP portion of the SP spectrum is flat rate.
Flat rate as in hourly based on the number of hours worked? or flat rate as in - salaried - exempt?
Flat rate, period. Meaning the contract is for $100/month, every month, regardless of service. There would always be something that designates when that would change. Most commonly it is based on number of employees.
I guess I have worked for an MSP that did that in the past - though I wasn't part of that assigned to a single customer, I was a consultant, dancing from client to client as needed.
The others (most of whom were AS/400 developers) did work at single clients, and as far as I know, they rarely if ever talked to any of the other MSP employees - instead the only difference they saw was that their paycheck was signed by the MSP, and the other internal staff at the client was signed by the client. Oh, Also, when the MSP employee took vacation, the MSP did not replace them with someone else, I'm guessing instead the client just didn't pay the MSP for that time. Is this a sign of a poorly setup/run MSP? i.e. not letting their employees know of the other uses so they could use them as a resource?
All depends on what the customer wants. Lots of customers want named consultants. The bottom line is the customer, not the MSP, defines nearly all these things. That the MSP could have filled in that role is unknown, only that they did not. Why? Presumably because they weren't supposed to. At some point the MSP is turning into a staffing agency, which is fine, but the benefits dwindle (as does normally the cost.)
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@Carnival-Boy said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
How does the internal IT people get that knowledge in a way that the MSP would not do identically? Two people, same role, same seat, same business - they'll get the same business knowledge.
And why wouldn't internal IT get the same IT knowledge that the MSP would - two people, same role, same access to MSPs for advice, help and training. You just seem to keep going round and round saying MSPs are better but not really explaining how. On the one hand you say MSPs are different (and so better), on the other hand you say MSPs are exactly the same (as so no worse). It's like having your cake and eating it. If you can only see upsides to MSPs and no downsides, then I can't really say anything else, I'm afraid.
Yes, that's how MSPs are. It's like having your cake and eating it, too. That's the benefits of improving architecture, you often get nothing but benefits.
Yes, I only see upsides. Every downside you mention seems to be contrived, not a downside of MSPs. You mention one thing after another that I don't believe are true. I truly believe that the MSP model has no downsides compared to the internal staff model. Truly. And all of the points about where MSPs are negative are always based, I think, around assumptions like them being expensive, distant, shared or other thing that is not an artefact of the MSP model but a false assumption.
This is why I'm so adamant about the model, I truly believe it improves all aspects of the connection between IT staff and companies or, at worst, is a break even.
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@Carnival-Boy said in The MSP Model fails more often than not.:
And why wouldn't internal IT get the same IT knowledge that the MSP would - two people, same role, same access to MSPs for advice, help and training.
- Lack of motivation. Where would internal staff go with that extra knowledge? Only way to use it is to quit and move on.
- Cost. To get access to that at the MSP is billable, rather than intrinsic.
- Peers. The MSP is not a peer within the department. Peering would cost money as it is not staff development for the MSP.
- Access. MSP would have access to resources, like working on or viewing problems with other customers, that internal staff at a customer would not see.
- Management. Managed by IT rather than managed by non-IT. Different structure.
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@scottalanmiller said in The MSP Model fails more often than not.:
My guess is that in the middle you get more companies that attempt to take on too much and cause issues by getting to "hands on" outside of their expertise.
This is probably the whole issue in a nutshell.
To be really successful, and MSP probably needs to be pretty big, it probably won't do very well at only 2-4 people. But if you have say 20, where you have 2+ storage guys, and 2+ Windows server guys, and 2+ Windows workstation guys, and 2+ linux workstation guys, and 2+ infrastructure guys, etc, etc, etc... well then you probably really start seeing the benefits of the MSP. You pay a flat rate to the MSP, and you get access to all of those people... but as mentioned, that flat rate is going to be pretty huge. Definitely more than the cost of a single onsite IT server guy, but less than 10 specialists.
The rub is most SMBs are just cheap - aren't willing to put the expenses where perhaps they should be, and instead cheap out, hense so many of the posts we have at SW.
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@Carnival-Boy said in The MSP Model fails more often than not.:
And why wouldn't internal IT get the same IT knowledge that the MSP would - two people, same role, same access to MSPs for advice, help and training. You just seem to keep going round and round saying MSPs are better but not really explaining how. On the one hand you say MSPs are different (and so better), on the other hand you say MSPs are exactly the same (as so no worse).
But I keep saying how...
- Scope
- Focus
- Flexibility
- Longevity
- Cost
- Scale
- Training
- Management
Wait, I think I have the phrase that makes the difference....
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@Carnival-Boy said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
I'd argue that the more complex it is, the more having good structure and support is important.
I agree and that's where I think internal IT wins. MSPs tend to be very good at IT, but lack the business understanding, because they don't work in the business, they work in IT. Good internal IT staff have both IT and business expertise.
Sadly I completely disagree with this statement. Most IT guys at the small end don't know their business at all, they don't consider it their job - and worse, management at the company doesn't either, management considers it management's job, but they don't really do it either.. so it's never really done.
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Does this phrase help:
IT Service Providers can work, and do work, in every way identically to internal staff (with obvious exceptions of who writes the checks) and any and all deviations from this identical state is assumed to be done for the purpose of being additionally beneficial.
Does that make sense? MSPs can do literally anything internal staff can do. If there is something you think internal staff is good for, MSPs can match that, every time. I'm arguing that "physics" makes this happen, that MSPs staff are employees at that point, they are both. So that it's actually impossible to say that internal is better, because MSP can be internal.
But then, anytime that a business chooses to use an MSP in any way that is not identical to how they would have used internal staff, then that is a business believing that they have found a benefit to the model - which could be in any number of areas.
That's why I'm saying it is a "cake and eat it too" scenario. The MSP adds options while taking none away. But requires nothing. So any perceived negative aspect of an MSP can simply be avoided, any perceived benefit can be chosen.
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@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
My guess is that in the middle you get more companies that attempt to take on too much and cause issues by getting to "hands on" outside of their expertise.
This is probably the whole issue in a nutshell.
To be really successful, and MSP probably needs to be pretty big, it probably won't do very well at only 2-4 people. But if you have say 20, where you have 2+ storage guys, and 2+ Windows server guys, and 2+ Windows workstation guys, and 2+ linux workstation guys, and 2+ infrastructure guys, etc, etc, etc... well then you probably really start seeing the benefits of the MSP. You pay a flat rate to the MSP, and you get access to all of those people... but as mentioned, that flat rate is going to be pretty huge. Definitely more than the cost of a single onsite IT server guy, but less than 10 specialists.
Not true that you need more than the cost of one guy. Working for an MSP, I can tell you that if businesses didn't demand random costly things burning up their hours, they'd almost never need even a single full time person even in relatively large organizations. The idea that almost anyone needs a full time "equivalent" is normally untrue. It's a rare shop that can justify that much time.
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@Dashrender said in The MSP Model fails more often than not.:
@Carnival-Boy said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
I'd argue that the more complex it is, the more having good structure and support is important.
I agree and that's where I think internal IT wins. MSPs tend to be very good at IT, but lack the business understanding, because they don't work in the business, they work in IT. Good internal IT staff have both IT and business expertise.
Sadly I completely disagree with this statement. Most IT guys at the small end don't know their business at all, they don't consider it their job - and worse, management at the company doesn't either, management considers it management's job, but they don't really do it either.. so it's never really done.
That's what we see in SW non-stop. No one ever knows their business. The MSPs (and just some better IT people) in threads start to ask more about the business than the internal people have ever considered. It's crazy. They work internally and surprisingly often have zero idea about their business!
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It's also a challenge for any employee to "know" their own business well if they haven't worked for many. Knowing the absolutes about a business is only one part of the picture, knowing it relative to other businesses is important too.
Like the guy that swore that VMware was doing a great job for his company. But he'd never used any other product. So actually had no idea if VMware was working well or not. He literally just lied about it in the hopes that no one would question it. A bit extreme, but the concept is the same. You might think you are an effective business but then learn everything you did cost twice as much as it cost your competitors.
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@Dashrender said in The MSP Model fails more often than not.:
The rub is most SMBs are just cheap - aren't willing to put the expenses where perhaps they should be, and instead cheap out, hense so many of the posts we have at SW.
I can only really speak from personal experience. My company pays for several different IT companies to support us (MSPs etc), so we get training, and we get access to many different IT experts to help, support, and advise us. We don't run internal IT because we're cheap.
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@scottalanmiller said in The MSP Model fails more often than not.:
The only times that I see the MSPs not having the same knowledge that internal IT does is not MSP vs. Internal but always a business that keeps the MSPs at arm's length and doesn't bring them full time in house like they would with internal staff. By treating them differently (french fries vs. onion rings) they force them to be different. But when treated the same, the same benefits apply.
Right - if today they are internal, and tomorrow they simply get their check from the MSP instead of internal, then yeah, that's true, but I'm not sure how it works when the MSP augments internal? Would it now be the requirement of the MSP employees to pass along all business understandings to the MSP so that future MSP workers who need to work at the client are aware of this information?
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@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
The only times that I see the MSPs not having the same knowledge that internal IT does is not MSP vs. Internal but always a business that keeps the MSPs at arm's length and doesn't bring them full time in house like they would with internal staff. By treating them differently (french fries vs. onion rings) they force them to be different. But when treated the same, the same benefits apply.
Right - if today they are internal, and tomorrow they simply get their check from the MSP instead of internal, then yeah, that's true, but I'm not sure how it works when the MSP augments internal? Would it now be the requirement of the MSP employees to pass along all business understandings to the MSP so that future MSP workers who need to work at the client are aware of this information?
That would be normal. It's not intrinsic to the model any more than it is for internal staff. But the MSP as a lot more incentive to do it.
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@scottalanmiller said in The MSP Model fails more often than not.:
That's why I'm saying it is a "cake and eat it too" scenario. The MSP adds options while taking none away. But requires nothing. So any perceived negative aspect of an MSP can simply be avoided, any perceived benefit can be chosen.
It can't require nothing, unless the overhead of the MSP is zero, but it's not zero, so.... it has to be more expensive than in house, unless you are firing someone who managed the in house, then I could say you are getting a wash.
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test
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@scottalanmiller said in The MSP Model fails more often than not.:
@Breffni-Potter said in The MSP Model fails more often than not.:
- When an external is brought in, Often it is a deliberate decision to save costs by removing the internal team afterwards. Regardless of competence, performance or anything else, the decision just boils down to money saved, not what delivers the best return on investment.
This may be true, but not something I see in the real world. I'm not sure I've actually ever seen this first hand as an MSP, but I've seen it from internal IT people that think it is happening. I'm not totally sure that I know any internal people that were replaced with an MSP, but I'm certain it happens. But commonly? I'm not sure about that. It's repeated as a fear a lot, but of the MSPs and internal people here (which is everyone), how many of you had an MSP brought in and then had them replace you OR were brought in as an MSP and you replaced the people that were already there?
As an MSP, we've done attrition fill ins often (replacing people who leave) but not replacing people who still work there. Sometimes it's to let someone working in IT to move into management or something else, but that's IT attrition even if not corporate attrition.
To be honest, I've more often seen MSPs replaced by in-house IT because, on paper, it costs less to just pay one guy to deal with everything and be forced into a jack-of-all-trades situation than to pay the MSP price for the added value.
