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Volume 31, Issue 2

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The “old way” of enabling business continuity meant costly hardware investments, unreliable monitoring capabilities, uncontrolled and hard to manage fees, and most importantly – slow recovery times. The new managed services approach eliminates these concerns by providing an on demand business continuity solution that meets the needs of the enterprise, has a cost structure that is in line with actual usage and, most importantly, is drillable on a regular basis without providing dramatic disruption and cost to the business. The newest virtualization capabilities are at the heart of these advances and are making practical business continuity available across the entire spectrum of company sizes.

Managed services deliver a win-win for service partners in this area with enhanced revenue opportunities that lock in a longer term customer. In addition, this approach builds a more linked channel because it is easily repeatable. As Forester Research points out, “managed services [has] a one-to-many, standardized service delivery model with a relatively small labor component and offers examples of how to articulate the value of these offerings.” For the highly in demand business continuity market, this approach brings an innovative new revenue model to the channel.

To appreciate how this model works, it’s helpful to first compare it with the old model; with an understanding of the role that virtualization plays today. Next, looking at it through the customer’s eyes, it’s easy to see why it makes sense and why it works. Finally, the channel can provide insight into how managed services are replacing outdated “tool” driven revenue streams with better margins.

Out with the Old and in with the New
Traditional business continuity can best be likened to having to rapidly move your family from your home and into a hotel room. You’ve left an environment with which you were familiar and had slowly modified over time to specifically fit your needs. Your new location is a standard configuration of someone else’s design. It’s a scaled back version of your former residence and nothing is familiar; you are forced to adapt and redesign your patterns of living. Beyond this inconvenience, no matter how long you had to leave your former residence or how much foresight you had into the disruption and prepared for it; you’ve inevitably forgotten something, and it’s most likely that it’s not just one thing.

Today, hosting and virtualization have allowed you to leave your home without really leaving. In other words, you can have a parallel universe right across town or across the country with as much or as little of the comforts of your primary home that your budget will allow. Virtualization allows the enterprise to capture an image of a primary server. During recovery, most of the traditional compatibility problems associated with getting the new hardware and operating system platform to play nicely with a fresh application installation and subsequent data restore are eliminated. By systematically capturing images and storing them on standby virtual servers, all the moving parts and their relationships are preserved.

According to Gartner Research, “Virtualization ... allows for planned downtime, with migration of virtual machines from one server box to another. Along with planned downtime, the migration of virtual machines from one server to another also makes disaster recovery more affordable for organizations.”

Now that the recovery problem has been solved the remaining challenge is image transport and hosting. Here’s where the managed service industry shines. The basic building blocks of this industry are economies of scale. Built correctly, each new unit of measure brought online in a managed environment should cost incrementally less that the unit immediately preceding it. In other words, growth produces ever increasing downward pressure on the cost of delivery of services.

In this environment the server image transport, infrastructure preparation and hosting and professional services are addressed. It is here that the entire solution “comes together.” The resultant expertise that naturally resides within the service provider means that knowledgeable help is on hand around the clock, which is exactly when disaster strikes. If properly vetted and chosen carefully, the service provider in effect becomes an extension of the enterprise’s staff, exactly when they need it the most.

A Case Study for Success
As a rapidly growing university town, Clemson, South Carolina is a city that prides itself in community excellence. In order to preserve and accelerate this vision, Clemson wanted to streamline its data management efforts to help ensure continuity of operations for its expanding infrastructure. With 100 GB of data to back up every month, one critical component of this was off-site data backup that would enable Clemson to maintain the integrity of its most important information, with the ability to quickly restore it as needed, while also having access to less critical data in a timely manner. By handling business continuity through a managed services approach, Clemson was able to achieve these goals with higher service levels and improved total cost of ownership over traditional service delivery models.

This newest model offers companies both large and small a number of compelling benefits over a hardware driven approach, including:

  • Increased peace of mind with the knowledge that the network is proactively monitored 365x24x7
  • A single point of contact and single supplier instead of multiple vendors
  • Improved service level agreement terms
  • Reduced costs through a more stable and predictable pricing model
  • Elimination of the need to build and maintain management and reporting systems
  • Reduced costs for specialized IT staff

The virtualized component is key. Working with a local IT solutions and services provider, Clemson is utilizing a leading edge solution that enables them to protect data in a web-based environment that is fully secure, while providing rapid data recovery when needed. And the worry about tapes is also eliminated. They take advantage of a local cache that enables them to pull up mission critical data quickly as needed. In addition, less critical, operational data is tiered in order of recovery importance, giving Clemson access to the data it needs, when it needs it.

As Alexias Anderson, IT manager for the City of Clemson explains, “The managed services model is very beneficial to us because I am a one person IT shop so there’s not a lot of time to devote to managing the various applications we have. With a managed services disaster recovery solution, we had the opportunity to implement a very efficient strategy while being able to manage other things more effectively as well. The learning curve was also very short and easy. We love it! We’ve had to do a few restores and they were all very seamless and very easy.”

A Thriving Channel

It’s no longer good enough to pull one trick out of a bag; the move to solution selling vs. tool selling is transforming the channel into one that provides proven, repeatable, long term value. When a business continuity solution is wrapped in an appealing managed services package, the reseller gains higher margins than it would via a typical transaction that only involved a piece of software or hardware.

Services today looks much like the original equipment manufacturer (OEM) structure that we’re familiar with as it relates to traditional hardware production. Much like hardware OEMs that take many disparate parts and assemble a finished good, so does the managed services market. Instead of hard drives, mother boards, computer chips and chassis, service providers combine hosting space, hardware, software and people to produce a finished product. While the business model makes sense, it is the byproduct of specialization, economies of scale and subject matter expertise that really make the compelling argument.

The result is a combination of capabilities that are exactly what the enterprise needs only when they need it. Even better, they only pay for it when they need it. A single entities’ inability to profitably produce such a combination is why it was never done before. On the service provider side, being able to create a profitable business model with compelling prices to the user thanks to economies of scale is a winning combination. From a channel perspective, this new tool enables traditional value added resellers to bridge the gap and take on true trusted advisor relationships with their customers. Most importantly, by leveraging the OEM service provider model the customer engagement is profitable from day one.

Stacy Hayes co-founded DS3 DataVaulting, a veteran data management solutions provider, with Idris Grant and Bill McCormick in 2002. He is an accomplished technology industry business leader and has also served as a U.S. Naval Officer and specifically, as White House Liaison Officer for the Secretary of the Navy. He has a B.A. degree in Industrial Relations from the University of North Carolina at Chapel Hill.