Services Given New Direction

Compaq Computer Corp. last week put its stamp of approval on the MSP business model when it launched its new Remote Monitoring and Performance Reporting service.

Compaq Computer Corp. last week put its stamp of approval on the MSP business model when it launched its new Remote Monitoring and Performance Reporting service.

Compaq Global Services high-profile entry into the emerging services niche could spur greater acceptance of the new outsourcing services model. And its use of management service provider InteQ Corp.s remote monitoring services in an OEM-type arrangement could signify the long-term viability of the pure-play MSP. But Compaq, of Houston, is not the first large services organization to enter the market—and it wont be the last.

IBM, for its part, has entered into similar partnerships with MSPs. "Varying parts of IBM have different strategies. On the hosting side, they use SiteRock [Corp.], and on the network services, they use NetSolve [Inc.]," said Corey Ferengul, senior program director at Meta Group Inc., in Chicago.

IBM also last week announced its new Remote eMonitoring service, built on Segue Software Inc.s SilkVision and SilkPerformer V application performance monitoring and scalability testing tools.

The Remote eMonitoring service provides remote monitoring and testing of client Web site performance and analysis of network server and database performance.

"We will monitor their transaction times outside the firewall," said Larry Pierce, executive, Infrastructure Systems Management at IBM Global Services, in Somers, N.Y. "We will write a script for the customer, and the product is told what to monitor. We will operate from our hosting center in Rome."

The service is offered on a monthly subscription basis.

Outsourcing behemoth Electronic Data Systems Corp., for its part, is working to break out its Web hosting group into two management services and is creating the packaging for those services, Metas Ferengul said.

Large hosting companies Exodus Communications Inc. and Cable and Wireless plc. also use partners to offer MSP-type services to their customers. "Theyve been using almost exclusively SiteLite Inc. and SevenSpace/Nuclio Corp. as their two primary providers of their MSP services," Ferengul said.

CGS is using InteQs remote monitoring services as an extension of its Business Critical Services portfolio of remedial and consulting services. The services include monitoring of client servers, networks and applications over Internet connections. The services, dubbed Remote Monitoring and Performance Reporting, also provide a secure portal that clients and Compaq consultants can access to view real-time performance trend reports.

Compaqs decision to work with InteQ, of Bedford, Mass., could spark interest from other computer services companies into looking at such arrangements, signaling the potential for staying power among MSPs still in business as the shakeout continues, said Eric Goodness, an analyst at Gartner Dataquest, in Lowell, Mass.

"This will ensure the long-term viability of the MSP pure-play. It does it by providing them with the revenue flow for long-term viability, gives them a partner that provides credibility in the market and proves you can do high-level partnering with OEMs to effect these solutions," Goodness said.

Despite early projections for huge market growth, the MSP subscription services model has not taken off for a number of reasons—not the least of which has been the resistance from IT.

Most IT consumers still dont understand it, and then theres the SOW factor at play, said InteQ customer Tom Riemer, director of Information Systems at South Shore Mental Health Center Inc., in Quincy, Mass.

"Theres still a lot of SOW—same old way—in the industry." The resistance, Riemer said, comes not from real decision makers in an IT organization but from "the recommenders. Its really about job protection," he said.

And then theres the trust factor. "You hate to say it, but [a name like Compaq] will come with greater trust," Riemer said.

CGS is integrating InteQs remote monitoring and reporting services into its services delivery infrastructure. CGS will market the services primarily to Compaq customers in North America. The services will support heterogeneous computer operations but only if some Compaq hardware is present, according to Jerry Coffey, director of Business Critical Services, in Stow, Mass.

"We think many enterprise-class customers will feel good about entrusting these services to a Compaq. It will make the story that much stronger," Coffey said.

Not every large vendor with a services arm will follow the same path, however. Hewlett-Packard Co., for example, has been heavily involved in the MSP Association, although it has not come out with a significant service itself.

"They are pulling in systems integrators and getting them to get into MSP services. They have been the most aggressive next to Intel [Corp.] in getting SIs to move to managed services," said Martha Young, an analyst with Enterprise Management Associates Inc., in Boulder, Colo.