Managed Security Services Growing Among SMBs

A new report from Forrester Research on the state of IT security at small to midsize businesses (SMB) in North America and Europe predicts ongoing growth in the managed security space.

In a result similar to that of enterprise respondents, SMB executives reported that the two top drivers for using managed security services is the demand for a specialized skill set that security requires (cited by 31% of the respondents) and the need to reduce costs (cited by 24%).

Other reasons cited for adopting managed security services include:

• The need to reduce complexity (19%)
• The need for 24/7 security coverage (19%)
• The rest of the IT environment is outsourced (5%)
  

Managed Services Tops for Filtering and Monitoring
The report also revealed that the top two services SMBs ask from their managed security provider are e-mail or Web content filtering (36%) and network firewall monitoring (33%). Forrester believes that the biggest uptick in the next year, however, will come from increased use of vulnerability management and assessment. Some 20% of SMBs plan to deploy these services in the next twelve months.

The Forrester report clearly shows that SMBs have a strong interest in all facets of managed security services. Some 23% are already using it for identity and access management, and another 35% are interested in it, but either have no plans or no budget for adding it to their slate of services.

Similar proportions of SMB executives recognize these issues: host event log monitoring or management (31% are interested but have no plans or budget); IDS/IPS monitoring or management (30%); endpoint security (34%); and regulatory compliance monitoring and assessment (31%).

When To Add Managed Services
The Forrester survey didn't tackle one of the most interesting questions from a managed services standpoint (in fairness, the focus was on security, not managed services). That is, what will it take for SMBs to start adopting the services in which they express interest, but have not yet budgeted for?

Our recommendation is to be proactive and deliberate about adding services. Don't wait for the need to arise; develop a plan to takes into account your security needs and build capabilities into both your budget and deployment plans on an incremental basis. That way, you'll enjoy the highest level of protection with a minimum amount of disruption.

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Managed Service Scenarios: Choosing the Best-Fit Solution

Are you puzzled about how to choose the best-fit managed service solution for your particular business needs? As a basic guide, the following are three typical high-level scenarios for deploying managed network services.

Scenario 1: Customer Owns Network and Shares Management Responsibility

Companies that already have an internal IP network can continue to manage it while out-tasking the management of onsite equipment -- usually known as customer-premises equipment (CPE), used for the managed service (see Figure 1).


The Roles and Responsibilities are as follows:
Managed service provider -- Sets up, maintains, and administers the equipment needed for the managed service, including company-owned equipment such as servers.

Company -- Managed service customer maintains and administers its internal network.

Scenario 2: Service Provider Owns the CPE; Customer Can Share Equipment Management with Service Provider

Some companies do not own a LAN, either because the location is new or the company already out-tasks its LAN services. In this situation, the service provider can manage the equipment needed for the corporate network as well as the managed service.

Many large enterprises like this arrangement because they can maintain physical control of the equipment while relying on the service provider for 24-hour network operational support (see Figure 2).


The Roles and Responsibilities are as follows:
Managed service provider -- Sets up, maintains, and administers the equipment for the managed services as well as the corporate network.

Company -- Monitors its corporate network through a Web interface provided by the service provider, receives regular reports on the network status and managed services, and is notified in case of a defined emergency.

Scenario 3: Service Provider Owns Equipment in its Own Facility; Customer Monitors Service Provider's Management of the Equipment

The difference between this scenario and the previous one is that most of the equipment is physically located in the service provider's "hosting" facility instead of on the customer premises.

The Roles and Responsibilities are as follows:
Managed service provider -- Sets up, maintains, and administers the corporate network and related managed services; most of the network equipment is physically located in the provider's computing center; the exceptions are the equipment for the LAN and network connections, as well as gateways for computers and IP telephony.

Company -- Monitors performance of its systems through a Web interface provided by the service provider, receives regular reports on the network status, and is notified in case of a defined emergency.

Summary: each of the three basic scenarios can be customized to meet your particular requirements. In upcoming posts, we'll identify some more specific application examples.

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Managing Enterprise IT Operations, from Afar

According to a recent McKinsey & Company report, their research results demonstrated that the potential for managing servers and other IT resources remotely is essentially underutilized.

However, changes in the current business environment will increase the adoption of this approach. Plato, a wise Greek philosopher, wrote about how "necessity is the mother of invention." Certainly, that perspective is equally valid today.

The motivation for utilizing the resources of a service provider can be considerable. A case in point: Fortune 50 companies, with budgets of $2 billion, can save as much as $500 million of their IT infrastructure budgets.

How, you may ask? Apparently, it's mostly from reducing fully-loaded labor costs.

Evaluation of IT Assets and Liabilities
McKinsey surveyed 141 CIOs at multinational corporations, and 34 percent of them said that they anticipate utilizing some infrastructure management services over the next three years -- which is an increase from 19 percent of respondents in a similar survey performed during the prior year.

Economic justification is the basis for the expected growth. As hardware costs fall, labor has become the focal point. They estimate that costs for non-labor IT components -- the hardware, software, maintenance, and facilities -- declined by almost 44 percent between 2000 and 2008 as prices have dropped.

McKinsey also estimates that total costs will fall by nearly half from 2000 to 2010, however the labor component will more than double -- to 62 percent, from 30 percent.

Apparently, the attraction of a managed service solution is due to changes in the deployment of infrastructure. Many organizations have simplified their IT and network architecture, making it easier to decouple components, and utilize service providers.

Selectively Out-tasking the Drudgery
Besides, standardization has made some management tasks ready for automation. As a result, it is now easier to manage some complex IT tasks, like network security monitoring, from a remote location.

Furthermore, organizations can selectively out-task parts of their IT infrastructure management. Some companies will choose to only out-task network monitoring, while others seek assistance with the total management of their data center needs. Clearly, it's a flexible model that can adapt to shifting business requirements.

In summary, McKinsey believes that the greater speed and security of data networking has made interactions between the service user and their provider more stable. This progress has therefore increased acceptance of the managed service delivery model.

By the way, before you rush to reduce your Business Technology deployment plans, you may also want to reflect upon McKinsey's guidance on IT spending cuts: they believe that "IT investments deliver more value to a company's top and bottom lines -- by creating new efficiencies and increasing revenues -- than any savings gained from traditional IT cost cutting."

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Questions to Ask a Managed Service Provider - Part 2

With more and more managed service providers (MSPs) entering the market, your choices are expanding. If you choose the wrong one, however, you might wind up with more challenges than benefits.

How do you know? According to Matt Cowall at Appia Communications, it’s often as simple as asking.

In part one of this post, we covered three of the top five questions to ask a managed service provider: How long has an MSP been in business? What kind of support does the MSP offer? And what kind of redundancy does the MSP offer?

Today we’ll cover the remaining two questions that Matt recommends you ask, and they’re arguably the two most important:

What quality of service does the MSP provide?
This is probably the most important question, of course. You’ll learn quite a bit about an MSP’s service quality when you check its references. Be sure to ask what happens when there are issues. Does the MSP respond quickly and take ownership of the problem?

Another key indicator is the MSP’s service level assurances. A service level agreement (SLA) is a document describing the minimum performance standards an MSP promises to meet. It should also clearly describe remedies — and even penalties — if the MSP ever fails to meet the minimum standards. An SLA is an essential part of a contract between you and an MSP.

Does the MSP have formal SLAs? Do the assurances cover what you’re buying? And do the assurances have ramifications? The willingness of an MSP to offer SLAs with significant penalties for service interruption is a sure sign that the MSP is a high-quality provider. No MSP can remain in business if it has strong SLAs and can’t deliver on its promises.

How willing is the MSP to meet your specific requirements?
Your company or organization is unique; it’s often that very uniqueness that has resulted in your success. Unless an MSP is willing and able to tailor its services to meet your specific requirements, you may find yourself bending your operations to suit the MSP — instead of the other way around.

You can tell a lot about an MSP’s flexibility during the procurement process. Do they ask a few questions and then send you a quote, or do they take the time to listen to your specific needs and develop a custom proposal? And since no MSP can meet every requirement, are they forthcoming about what they are able — and not able — to do, so you can make a fact-based determination of how well their offerings fit your needs?

Lastly, ask about a roadmap for their products or services. Your needs will evolve over time, sometimes quickly. Therefore, your MSP should have a plan that aligns with your future business needs.

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Questions to Ask a Managed Service Provider

The benefits of outsourcing make a simple and strong case, and more organizations are choosing to do so. As a natural result, more and more companies are entering the managed services provider (MSP) market.

According to Matt Cowall at Appia Communications, some of them are well-qualified; others are simply trying to take advantage of a market opportunity. Price is important, but it's not the only consideration, and the benefits of using an MSP can quickly evaporate if you choose the wrong one.

Matt recommends five key questions to ask before selecting an MSP. We'll discuss three of them today.

How long has an MSP been in business?
As in any business, there's an art and science to offering managed services. One obvious way to separate the experienced MSPs from the wannabes is to ask how long they've been in business.

If they've been operational for some time, they probably will have already addressed any service delivery issues they may have experienced in the beginning. Length of time in business is also an indicator of financial stability and client satisfaction.

What kind of support does the MSP offer?
One of the reasons you choose managed services is to turn your headaches over to someone else. If the MSP's support is weak, then you'll need to manage both the MSP and the problems you thought you were outsourcing.

Does the MSP have a support center that is staffed 24/7/365 (as opposed to being on call)? Does it have formal ticketing and escalation procedures? And does it monitor your services for you, or are you expected to bring problems to its attention?

What kind of redundancy does the MSP offer?
As you shop for an MSP, you'll learn about the infrastructure they use. Don't forget to ask if that infrastructure is redundant. Redundancy is the duplication or repetition of critical components in a system to provide alternative functionality in case of a failure. Even the best equipment fails from time to time, so it's essential that there are sound backups in place to ensure service isn't interrupted.

This is part one of a two-part blog post. In part two, Matt will share his thoughts on questions that managed service buyers should ask about provider quality and flexibility.

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