The MSP Model fails more often than not.
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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.
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@thanksajdotcom said in The MSP Model fails more often than not.:
@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.
Which brings us back to the point that most SMBs are cheap.
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@thanksajdotcom said in The MSP Model fails more often than not.:
@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.
Exactly.. that is what my customer did - there was a mismatch of understandings and therefore the client felt that they were wasting money (aka getting no value) and instead hired a person on a time and materials basis. They are definitely getting much less value than they were before, but perhaps they didn't need the value they were getting.
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I know something that I see as rampant for both internal IT and MSP's both is a VERY mismatched understanding of what the business wants. And what the business owners want isn't necessarily anything to do with IT either. IT is a necessary evil for most SMB's they want whatever makes it easy for them to figure out what IT is doing.
A good MSP or internal person for that matter. Will take the time to actually figure it all out.
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@Minion-Queen said in The MSP Model fails more often than not.:
I know something that I see as rampant for both internal IT and MSP's both is a VERY mismatched understanding of what the business wants. And what the business owners want isn't necessarily anything to do with IT either. IT is a necessary evil for most SMB's they want whatever makes it easy for them to figure out what IT is doing.
A good MSP or internal person for that matter. Will take the time to actually figure it all out.
But that often requires allowing IT to be part of the business process - otherwise the management needs to do that. IT can't work/exist in a vacuum.
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@Minion-Queen said in The MSP Model fails more often than not.:
I know something that I see as rampant for both internal IT and MSP's both is a VERY mismatched understanding of what the business wants. And what the business owners want isn't necessarily anything to do with IT either. IT is a necessary evil for most SMB's they want whatever makes it easy for them to figure out what IT is doing.
A good MSP or internal person for that matter. Will take the time to actually figure it all out.
A large portion of my work at my last job was actually helping the business units making requests to IT figure out what they actually needed. A good internal IT team, or MSP will be able to look past the language barrier (Geek Speak vs Bad/Non-Geek Speak).
If they're not doing that, are they really doing their job?
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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.:
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.
See my other posts about how MSPs are actually naturally cheaper due to better efficiency in management, hiring, attracting talent, retaining talent, etc. If we ignore all those pieces, yes there would be a nominal necessary increase in overhead (unless other things like HR, payroll and whatever are more efficient which really can happen easily).
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@thanksajdotcom said in The MSP Model fails more often than not.:
@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.
It's very true. That's what we see all the time. Companies thinking that they can replace huge teams of part time people with one guy that they hope to work into the ground. Pretty much always get burned in the long run.
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@dafyre said in The MSP Model fails more often than not.:
@thanksajdotcom said in The MSP Model fails more often than not.:
@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.
Which brings us back to the point that most SMBs are cheap.
Most are cheap, but only like 60%. A huge percentage bleed money like crazy because of, as fas as I can tell, hubris. They like to brag about staff size or flaunt wasting money so buy the biggest, most expensive crap that they have no need for and doesn't make any business sense for them. See any SMB running a SAN, more or less, for example. Makes sense in the enterprise and tons of SMBs hate to admit that they don't have the same scalability needs as, say, Exxon Mobil, so they buy gear that would make more sense there and ignore their own needs. "If it is good enough for oil companies, it's good enough for me two man show repair shop in the mall!"
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@Dashrender said in The MSP Model fails more often than not.:
@thanksajdotcom said in The MSP Model fails more often than not.:
@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.
Exactly.. that is what my customer did - there was a mismatch of understandings and therefore the client felt that they were wasting money (aka getting no value) and instead hired a person on a time and materials basis. They are definitely getting much less value than they were before, but perhaps they didn't need the value they were getting.
The Doctor Dilemma. No matter how bad they are at business, they often earn enough to hide it. So like a satellite in orbit, often they can maintain a failing business... forever. It's failing (read: losing money every day) but never totally fails because someone (owner, doctor) is "donating" money to keep it going.
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@Dashrender said in The MSP Model fails more often than not.:
@Minion-Queen said in The MSP Model fails more often than not.:
I know something that I see as rampant for both internal IT and MSP's both is a VERY mismatched understanding of what the business wants. And what the business owners want isn't necessarily anything to do with IT either. IT is a necessary evil for most SMB's they want whatever makes it easy for them to figure out what IT is doing.
A good MSP or internal person for that matter. Will take the time to actually figure it all out.
But that often requires allowing IT to be part of the business process - otherwise the management needs to do that. IT can't work/exist in a vacuum.
Yup, and as we see on SW, rarely does even internal IT get allowed to do that.
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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.:
@Minion-Queen said in The MSP Model fails more often than not.:
I know something that I see as rampant for both internal IT and MSP's both is a VERY mismatched understanding of what the business wants. And what the business owners want isn't necessarily anything to do with IT either. IT is a necessary evil for most SMB's they want whatever makes it easy for them to figure out what IT is doing.
A good MSP or internal person for that matter. Will take the time to actually figure it all out.
But that often requires allowing IT to be part of the business process - otherwise the management needs to do that. IT can't work/exist in a vacuum.
Yup, and as we see on SW, rarely does even internal IT get allowed to do that.
And the problem is management doesn't know what they need, and a lot of IT people often don't know what they need, which is where MSPs fill in the gaps. However VARs masquerading as MSPs also causes issues and confusion in the market, so I get some businesses trepidation about doing that, but, the real issue is that SMBs, especially, are cheap, and only look at how much they are spending on paper on equipment, licensing, etc, and don't consider that IT is, in a large way, about risk mitigation, and don't look at how much it will cost if equipment goes down, etc.
