Offering 24x7 managed services without a network operations center (NOC) was once a near impossibility. How can you manage something when you don't have the around-the-clock system in place to manage it?
But solution providers are finding they can break down the no-NOC barrier by pairing up and working with each other to sell managed services, which represent a market opportunity estimated at $40 billion, that grows at a rate of about 20 percent annually, according to some estimates.
Two VARs, Heit and WestShore Technologies, are bucking the no-NOC trend by partnering up for managed services offerings.
Heit, a Cisco Systems Silver certified partner in Fort Collins, Colo., has its own NOC, while security-focused solution provider WestShore, Tampa, Fla., does not. Along with having a NOC, Heit holds a host of managed services designations, such as Cisco Powered Managed Security, Cisco Powered Managed Unified Communications and Cisco Managed Services Partner.
The two solution providers teamed up recently, after a WestShore customer asked about security management.
"We got an opportunity around [Cisco's] self-defending network, did the implementation, and the customer wanted ongoing monitoring and management," said Jason Lang, WestShore's president and CEO.
But with that opportunity came the questions: "How do we supply and deliver services when we lack 24x7 resources?" Lang asked. "Is this something we want to undertake and invest a ton of money in?"
Lang estimated it would take years for WestShore to build out its own NOC and cost six to seven figures -- time and money the company couldn't expend.
And as WestShore was scouting ways to offer managed services without eating the additional overhead for resources, Heit was looking to branch beyond its managed services offerings for the financial industry and hoping to get exposure in more verticals and markets.
"Heit has a NOC, and it'd be a lot easier for you to resell our managed services," Dan Holt, Heit's CEO said.
Heit Vice President of Sales Ken Totura added: "Building out a NOC takes people, processes, tools and credibility."
WestShore's Lang said he saw a case study for Heit and contacted the company about reselling Heit's managed services. The two struck a deal.
"Instead of being competitors, we can be partners," he said, adding that WestShore's staff and Heit's staff complement each other. WestShore has a couple of CCSPs on staff; Heit has CCSPs on third shift for 24x7 coverage. Now WestShore can expand its market by selling security, infrastructure and managed services in its Tampa region.
Next: Partner-To-Partner Collaboration A 'Win-Win'And while the pairing lets WestShore offer managed services without the time and money needed to build a NOC from the ground up, the partnership has its advantages for Heit too. Totura said it boosts Heit's speed to market and its ability to reach customers. It shortens the sales cycle while boosting the client base. All told, he said, it creates new opportunities.
"We specialize in the financial services community, but it's homogeneous to other verticals," Totura said. "Our expertise works in a lot of verticals and we reach them through partnerships."
Heit and WestShore teamed up via the recent launched Cisco Systems channel program, the next-generation Managed Services Channel Program (MSCP), which Cisco unveiled at its annual Partner Summit in Boston in June. Cisco now allows more partners to participate in the MSCP program by lowering the barrier of entry and enabling partner-to-partner collaboration through a white label arrangement that lets two partners work together to deliver managed services using one partner's NOC. The previous iteration of the MSCP required all partners to have their own NOC to qualify.
Both WestShore and Heit said the Cisco program brought them together and has created new opportunities.
"We're backed by a partner with expertise," Lang said of WestShore's managed services agreement with Heit. "We can work as a team and sell into the local market here."
And Heit's Holt said his company is getting better use out of the resources it already has.
"We've invested, taken years and invested in people, process and technology, and we weren't fully utilizing all of those," Holt said. "Cisco has helped with that."
The partnership answers the ever-mportant question: "Can you be all things to all people?" Totura said. The ability to offer services in more areas to more types of companies can open a lot of doors, while having to turn down business by saying no only benefits the competition.
"Saying no opens the door for competitors to get in," Totura said. "The whole concept of partner-to-partner partnering is to have a formal construct in place to avoid that." Totura added that he has dubbed that construct "coopetition," a mix of competition and cooperation between partners.
Cisco's MSCP program and the ability to offer its services through other partners requires no up-front cost and no personnel costs while creating stickiness and a renewable revenue stream.
"It makes perfect sense," he said. "Now the customer is tied to Heit and tied to us. It's a win-win."