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“Industry Nomenclature”

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Phil Clark, Marketing and Channel Development Director, NIU Solutions

After 23 years in the IT Services industry, I have never been so frustrated with the confusion we’re generating with clients, largely down to nomenclature. It is well publicised that the Cloud word is overused, but I am seeing a dangerous kickback from companies that are worried about cloud message dilution – and that MSP as an industry term is safer territory. And so begins MSP message dilution – where does it stop?

And in this context we are seeing client enquiries become increasingly complex. Our company is current embroiled in many client sales situations, across whom there is no common competition, no consistency of requirement definition, smatterings of “cloud” and “Services” with no real clarity on the need – and, as a result, they will get responses from our competitors and ourselves that are impossible to compare, full of gaps and assumptions that are invalid. Then they’ll pick the cheapest one.

I have never been so frustrated with the confusion we [as an industry] are generating with clients, largely down to nomenclature.
And this company will be one who doesn’t actually provide Services with a capital “S”, but is likely to be a reseller of stuff who wants to move into this space – and have broadly under-called the costs to support this move. So when the client asks that provider to sign up to Termination for Persistant Service Level breach, or integrate their service management framework with the clients ServiceNow offering, and they are met with blank faces, and at that point they’ll realise their tender process was a load of old toss – and they should have picked the provider who was more experienced in the Services way of doing things. Or – even worse – they muddle through contracts to be staring down the barrel of a “service provider” who is in administration because they didn’t realise how complex MSP world can be.

So I was wondering how we can start to be a bit more specific in order to help our clients find the right partners on projects. Radical thinking, but lets think about our world on a spectrum from the viewpoint of what our clients actually want. This may be a little simplistic but I think it captures the profile of most clients reasonably well:-

Shade 1 – Clients who want to buy IT or Applications entirely on demand, and don’t care where its delivered from. They also don’t care about SLA’s or responsibilities for who does what, and who makes it work.

Shade 2 – Clients who want to buy IT or Applications on demand, but have specific requirements for that IT that make entirely shared or standardised services not suitable.

Shade 3 – Clients who want to buy IT or Applications cheaper than their current delivery model (either on demand or not), but impose certain restrictions on delivery models to support their business requirements

Shade 4 – Clients who have an existing IT team, but need to source specific skills or services from a third party to supplement functions that they will integrate into their world internally

Shade 5 – Clients who want to buy all of their IT or Applications for the same price as their current delivery model, but with higher levels of function or flexibility (such as management or DR) gained through the benefits of Shared Services from a Service Provider, and are looking to a third party to integrate it into their world, but navigate the complexity of service ownership and boundaries themselves through contracts.

Shade 6 – Clients who have no concept of IT, but need some “stuff” to support their business processes and want someone else to design, build and run it for them, and – most importantly – own the service entirely.

So across these 6 shades, we have created industry terms that are blurred on the edges to make companies significantly more appealing to a broader client community. Public Cloud, Private Cloud, Hybrid Cloud, Cloud Services Aggregator, Cloud Services Integrator, Cloud Services Broker, Managed Services Provider, Mini-Sourcing, Selective Outsourcing, Full scope Outsourcing, Outtasking, etc.

…companies that resell product (dump and run) who […] have simply rebadged themselves to get out of a commoditised and low margin business, but have yet to understand the complexities of the MSP space.
And then you have a different dimension: companies that resell product (dump and run) who are now either Private Cloud companies or Onsite MSPs, who simply have rebadged themselves to get out of a commoditised and low margin business, but have yet to understand the complexities of the MSP space – and are starting to get rumbled. Can we please all agree that reselling a product with no SLA’s on a financed annuity basis is not a service? It’s a financed product, and if you have no ability to take a call when it goes wrong you are not an MSP! Tier 1 Vendors with Hardware and Software arms take note too please.

So my question to readers is this… Would it be sensible to agree some definitions on a spectrum to ensure our clients understand where we all play – and stop wasting lots of peoples time and money? I’m not saying my definitions are correct, but surely a classification of capability, signed up to by appropriate service providers and governed by a industry body (that is aligned to clients needs) would be a useful tool for both identification of client opportunity, and also potential partnerships in our space. I am happy to start. Based on my definitions, we’re an MSP with existing clients who need Shades 3-6 and we do a very small amount (less than 10% of revenues) occasional product resale if a client needs no “follow-on” Service. With a capital S.