How Managed Service Provider Accreditation Helps Buyers

In today's changing volatile economy, companies find the predictable monthly service charges of a managed service provider (MSP) highly attractive. They can deploy technology, confident that they're not pouring money down a black hole. The problem is, scads of technology providers are now trying to recast themselves as MSPs.

How can you tell which ones are qualified?

That's Charles Weaver’s job. He's CEO of the 8,000-member International Association of Managed Service Providers. His nine-year-old group offers an accreditation program for managed service providers, and it's closer to a bar exam than a pro forma blessing. No MSP has ever received a perfect score, and it can take as many as three tries before a company passes. (For more on MSP accreditation, see When Selecting Qualified MSPs, Assume Nothing.)

Part Technology, All Business
The Managed Services Accreditation Program (MSAP) has two parts: a written exam and a physical inspection. The written exam is only about one-fourth weighted toward technology, says Weaver. The other 75 percent relates to the business. "It's not a technology certification. We look at everything from their financials to their facilities. We make sure they're a healthy stable company. We ask questions about disaster recovery and security, but a lot of the exam is designed to determine their financial stability."

The physical inspection follows, during which Weaver or one of the 15 IAMSP board members visits the facility. They check for physical security and process documentation, among other issues. "Documentation is a big problem at the small and midsize service providers," says Weaver. "They fail to write things down, and that puts their business at risk." If they fail the test, the IAMSP shows them how to improve, and they can take the test again (at a cost of $1500).

Dealing with Growth
The accreditation program has been so successful that Weaver is hoping to set up partnerships with consulting firms to help MSPs prepare. The IAMSP has already added sub-categories relating to accreditation for green IT facilities and master MSPs (those who lease services to smaller MSPs).

But keeping up with the growth in the industry is keeping Weaver busy. "Companies are demanding managed services because they're trying to cut costs. But they're finding very green, very immature vendors who say they're an MSP because they went to a seminar," he says.

If you're entrusting your company's technology to an MSP, then invest the time to determine whether your MSP is accredited, and what that accreditation process involved.

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Next Generation Managed Services Enable Retailers to Innovate

Online competition and access to price information has been squeezing already thin retailer profit margins for some time now. Combined with the added pressures of the economic crisis, many retailers are being pushed to the edge. Sadly, familiar names, such as Circuit City, have already been pushed over the edge.

To survive this crisis forward-looking retailers need to focus on:

1. Efficiency -- making every part of the business as lean and efficient as possible, especially in the supply chain.
2. Cost Removal -- driving out costs everywhere, especially in labor, their second biggest cost after the goods that they sell.
3. Customer Experience -- seeking ways to differentiate an increasingly homogeneous shopping experience.
   

Salvation in Managed Services
Retailers have traditionally been very closed to the idea of managed services provided by third parties. Razor thin margins have made them very risk adverse. There is a general skepticism of service providers, large IT firms, and their understanding of retail or their ability to adequately serve retailer needs.

Those fears and biases are beginning to fade as the reality of economic pressures for cost reduction and competitive pressures for differentiation bite harder than ever before. Retailers are now exploring how managed services allow them to address these monumental challenges.

Research by Cisco IBSG (the company's strategic consulting arm) reveals that successful providers of managed services must address retailer core buyer values:

• Proven Reliability -- to manage risk and complexity.
• Cost Effective -- pay for performance.
• Tailored Solutions -- specific to the retailing industry.
• Focus on Customer Experience -- enabling competitive differentiation.
• Speed to Market -- deliver benefits immediately.
  

Managed Services Enable In-Store Innovation
Many retailers are aggressively applying managed services to innovate. Digital Signage, or the ability to provide targeted multi-media messaging to customers, is being used by retailers such as WalMart and Eddie Bauer to influence buying decisions at the point-of-sale and to increase store traffic. The complexity involved in the deployment, underlying network and operations means that retailers are increasingly turning to proven, managed end-to-end solutions.

Companies like Best Buy and Home Depot are trialing Telepresence kiosks that allow them to enhance the shopping experience by bringing expertise directly to their customers in their stores -- in a scalable and cost effective manner. Service providers that install and deliver these solutions become valued partners who offer unique value-added solutions specific to the retail industry.

The current economic crisis will re-shape the retail business. Resilient retailers who survive and thrive will be those that proactively embrace next generation managed services as a means to attain competitive differentiation. Inventive managed service providers will deploy unique solutions that help to position retailers for the long term.

About the author: Stuart Taylor is a Director in Cisco IBSG. Stuart leads thought leadership and engagements with key Service Providers in managed services. He has over 15 years of experience focused on strategy, corporate development, business unit strategy, M&A and operational improvement with large mobile and wireline operators and high technology clients.

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How to Stay Ahead of Hackers and Cybercriminals

My conversation with Jonathan Nguyen-Duy, Director of Product Management for Verizon, ended up being very thought-provoking. We were supposed to talk about a new security offering, a backbone-based solution aimed at stopping Internet-based attacks even before they hit a company's network. (I'd spoken previously to Nguyen-Duy about Verizon's risk-correlation service.)

Nguyen-Duy is a fount of knowledge about the changing landscape of international cybercriminals. Verizon is expanding its denial-of-service (DOS) detection and mitigation capabilities into eight network management centers serving 24 countries with new levels of scalability -- in part because of an increase in international cybercrime, according to Nguyen-Duy.

"Our customers are telling us that the frequency and complexity of DOS attacks has grown. We're now seeing cyberattacks based on social and political activism. We're also seeing less sophisticated hackers getting access to attack methodologies."

A case in point: consider the following related events.

Item: The Bureau of Alcohol, Tobacco, and Firearms, he says, recently arrested "the eBay of cybercrime" in Phoenix, Arizona which was selling automated attack programs, called botnets.

Item: A CIA official said at a conference that the recent power outages in South Florida were results of an unauthorized probe of the utility network originating from China.

Item: Crime syndicates are more frequently attacking financial services firms, online retailers, and government agencies for extortion purposes, in countries where there may be no laws or no enforcement of the laws.

"If you're a global enterprise or agency with deep pockets and a brand to protect, the challenge is real," Nguyen-Duy says.

"This gives rise to a clear problem: If you have a DOS attack that floods a device with five times the normal amount of traffic, do you have the capacity on site to parse through it and separate the legitimate traffic, and can you do it in real time so you don’t have degradation in service?" Remember that typical consumers won't sit through a transaction if they experience latency of more than 10 seconds.

Protection: Around the Clock, Around the Globe
No, we're not trying to write the script for Die Hard V here. However, because globalization is increasingly driven by the ability to share information anywhere, companies that take advantage of it are also making themselves more vulnerable.

Unless you want to deploy high-priced security experts everywhere you do business, it would be prudent to consider how expanded managed security services can protect your multinational communications network. And, thereby prevent the unthinkable from becoming a reality.

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