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Pay for “Manages Services”, don’t get support.

May 4th, 2020 · 1 Comment

As a technology company we pride ourselves on customer service.
Unfortunately, too many companies only care about making money.

For years I have fought against the “managed service” (MSP aka Managed Services Provider) mentality. Microsoft and Intel have tried their darnedest to coheres tech companies into providing “manages services”. Where the customer is charged a flat fee for a lot of things and supposedly provide certain maintenance and support to the client.

The theory is that the end customer gets a known monthly bill for all hardware, software, services and new equipment every three years. What I have found is the Technology providers profit margin is so small they don’t actually monitor the alerts, don’t run critical software security patches, they don’t install the latest versions of software including security software and the vast majority of the time don’t make sure backups have run. In addition, the “included” services never actually included what the customer needed. Help with Outlook? Sorry that cost extra. Computer won’t boot, sorry that cost extra.

It seems to get readers Blogger need to post images to entice people to read. Here is a picture of my daughter with a sword, because ‘Ice Princess”.

What our competition tends to do is use the “guaranteed” money as a foundation to pay their salesmen, owners and staff as much as possible. What happens is they forget that they pledged to provide services to the customer.

Time and time again, I have a new client that had managed services, but they were not getting patches, backups, updates that they were paying for. In addition all the work they needed help with was not part of the contracted service, so it cost the customer extra.

Back in 2007 this trend was almost forced upon the technology providers. We (Ward Computers) have fought it tooth and nail. Intel wants me to buy their hardware and give it to clients and charge them a monthly fee and rotate it out with new equipment every 3 years. This is called hardware as a service (HAAS). So I pay for the hardware (I notice the hardware manufacturer are never willing to be paid over the course of three years at no interest) then I give it to the customer for a promise to be paid a certain amount a month every month until Jesus comes back or the end of the world.

Microsoft wants me to pay for their software (give them our business credit card and bank account access) and then we provide the software to our clients for a monthly or annual fee. This is called software as a service (SAAS).

The problem is the cost to the end user. It cost $150 a year for Microsoft Office 356. The customer could buy Office 2019 Home and Business for $250. In less than 2 years you, the business would be saving money if you bought the software outright. The same applies to hardware and other software companies like Adobe.

The “as a service” always benefits the manufacturer (Intel, Microsoft, SonicWall et al), not necessarily the tech company providing the service to the client, and defiantly not the client.

The best-case scenario is that the fees from the manufacturers make the life of the product (break-even point) three years. If the client normally replaced the item (computer, printer, router) every three years, they would break even. Again, this is best case. As you can see above with Office 365, you would need to replaces Microsoft Office software every 18 months in order to “break even”. With the three year or less model, the manufacturers have made sure that the company providing the service (your direct tech provider like Ward Computers) makes a 3 to 5% profit margin. That is not a lot of money to run a business. As a result, services are not really provided, or the tech company has to sell numerous add-on services to stay in business.

Tech companies are providing other monthly fee services, through 3rd parties. Such as backups as a service (BAAS), cloud storage, and security software as a service (SSAAS). These come with a wide range of fees to the end user, since the provider is trying to stay in business.

Our clients (the clients of Ward Computers) tend to only replace products when they are no longer repairable. This is normally the 5 to 7-year mark, however it is not unusual for hardware to last 9 years.

Our competition and even the manufacturers will lie, and it is a damn lie, that the cost of maintaining a “over 3-year-old computer” is $20,000 a year. That is a figure Intel recently put before us (the IT community) in a webinar. They (Hardware and software makers) claim they figure in staff pay and repairs et al. I’m here to say that is not true.

With our clients, we let them know if and when we believe that the product needs to be replaced to increase productivity or maintain security. Saving them (our clients) thousands of dollars in cost every year.

With the SASS, HAAS, SSAAS et all, it ends up costing the customer. This cost must be passed on to someone, and that someone is the customers customer. Your Accountant, favorite restaurant, grocery store, hair dresser all must increase their prices or face going out of business with the “as a service” model. So “big business” makes a ton of money and the “little guy” is paying for it. A terrible capitalist model in my opinion. Don’t forget, Ward Computers is a capitalist company and proud of it, so our condemning “big tech” should tell you something.

Now I hope you can see why I believe that the “support” or “maintenance” or “managed services” is not good for companies. Let me give you a real world example that just recently occurred.

Botana’s Mexican restaurant had one of their kitchen printers stop printing. This of course caused issues with their customers getting their meals.
They have a “mandatory” service contract with a company in Kansas City, Kansas. That is about 4 hours drive away from Branson where Botana’s is located.

As a result, the tech for the “service” company “spent hours” trying to figure out the problem and could not. They told the owner of Botanas that they could not do anything about it, but they could “send (sell) her a new printer and overnight it (putting the cost on the customer’s bill) though at the time it would be 2 days for the overnight freight. This service of diagnosing the problem was not covered in their contract.

Since we (Ward Computers) originally sold Botanas the software (Dinerware) and much of the hardware, they called us at 8pm in the evening. We are about a 40-minute drive from Botana’s. Before hopping into the car and running down there, I asked a few simple questions about what happened before and after the printer quit working. At the same time, I remoted into their network and tried pinging the printer, no luck.

It turns out they had a power “brown out” that morning about 11 am. As a result, the owner had unplugged and plugged power in to all the printers and other devices in the restaurant. I asked the owner to turn off the printer, wait 15 seconds and turn the printer back on. I let her know if that did not work, I would drive down right then. When she started to turn the printer off, she noticed the power plug was not connected all the way in the printer.

She turned it off, pushed the power plug in, turned it on and the printer worked. Tickets to the kitchen that were backlogged from all day began printing.

Paying for a managed service did her no good, calling a company that wants to serve their customers did.

This is why we provide local service and support. We provide remote access to our clients but all are within a 45-minute drive of our office. We provide remote monitoring, were we get logs of activity and actually review every log, every day. We also provide remote support.

I do not believe it is smart, to not be able to reach your customers, by having a drive of more than an hour.

We also do not charge for drive time. To my knowledge every Manages Service Provider does. In my opinion, that is just another way to steal from the customer.

That is why Ward Computers only serves Taney, Christian and Greene (north Springfield) counties in Southwest Missouri. We do our best to not leave a customer down all day without a kitchen printer, because we are a complete state away.

So if you have a MSP “serving” your business, make sure they are performing all the tasks they promised.

Until we meet again, have a COVID-19 and Computer Virus free week.

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