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By Jeff Kaplan

Although most of the major market research firms predict that small- and mid-size businesses (SMBs) will acquire new technologies and business applications at a faster rate than their larger enterprise counterparts over the next two to three years, THINKstrategies has found a growing proportion of SMBs have become frustrated with the escalating complexity and hassles of managing todayís information technology (IT) and software applications. As a consequence, many SMBs are turning to a rapidly expanding array of managed services to help them handle their IT operations.

SMBs have become increasingly dependent on IT and have found themselves at risk of system disruptions and downtime that can harm their business. Even when their systems are up, they are often not running at an optimal level to fully satisfy their business requirements. As a result, SMBs generally donít get the best performance and ROI from their business applications, or IT and communications operations.

SMBs are no longer satisfied with their current IT suppliers reacting to problems. Instead, they want their suppliers to proactively reduce the risk of an IT problem adversely affecting their business. Few SMBs can afford to hire adequate in-house IT staff to overcome these issues, but they also canít afford to continue to operate at a suboptimal level. These issues are causing many SMBs to reevaluate their IT strategies and suppliers.

Rather than rely on traditional suppliers that simply provide a set of products and reactive maintenance services, a growing number of SMBs are seeking new suppliers that can assume greater responsibility for deploying and managing their technologies, and reduce the total cost of ownership (TCO) of their IT operations.

This trend has created a growing interest and adoption of managed services among SMBs. Managed service providers (MSPs) assume responsibility for administering specific IT or network functions on an ongoing basis. The variety of managed services has grown to include managed back-up and recovery, desktop, email, network, security and storage services.

The concept of managed services appeals to many organizations. It enables them to offload a portion of their IT operations without relinquishing full control as they would in traditional outsourcing arrangements that lead to the transfer of the assets to an outside vendor.

Managed services are generally delivered from a remote, centralized location via the Internet. In many cases, the MSPs have consultants who are able to perform an assessment of the customerís current system and management requirements to determine the level of service needed. Many of the MSPs are also aligned with third-party service companies that can provide on-site support when necessary.

Managed services are usually priced on a monthly, per-user or device basis. The services are typically packaged into multiple levels, ranging from basic monitoring services in which the provider notifies the customer of problems that the customer resolves on their own, to fully managed services that rely on the provider to identify and resolve issues.

The concept of managed services isnít new. Telecommunications carriers have been offering "value-added" managed services to their largest customers for decades. The idea of delivering managed services to a broader cross-section of customers emerged during the dot.com era when the ability to monitor remote locations via the Internet became a reality.

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Jeff Kaplan is the Founder and Managing Director of THINKstrategies.
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