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Stanimira Koleva, Cisco

by Stuart Wilson, Monday 6 September 2010

Stanimira Koleva is European commercial and small-business director for Cisco. In this piece, Koleva argues that the emergence of cloud computing means that moving to a managed services model could become an interesting new revenue stream for SMB resellers. This will enable resellers to engage with customers long-term, instead of being forgotten after installing a piece of kit

From box shifters to service providers

Small businesses generally have a love-hate relationship with IT – technology enables powerful and efficient new ways of working, but managing the resources needed to support these can be a headache. Many small businesses rely on the advice of a preferred partner, such as an IT consultant or reseller, to recommend and provide the equipment needed to support specific business objectives. This type of outsourcing helps SMBs to focus on their core business.

However, even with the partner providing the required IT products, the technology or telecoms services needed by the business are often supplied by another provider. This leads to complex situations, where small businesses have to juggle multiple points of contact, multiple points of failure, multiple contracts, billing agreements and so on – an unnecessary burden for business owners and managers focused on building their businesses up in a challenging economic environment.

The best arrangement for small businesses would be one contact for all their IT requirements – be it products or services. This could mean that their IT provider would also become their telecoms provider. In the past resellers would have regarded this set-up as too complex. This isn’t the case today. With the wholesale adoption of internet protocol (IP) the barriers to entry for technology resellers to become telecom service providers are dramatically reduced. You don’t need your own telephony network or data network to provide a managed service to your customers, and the skills and technology required to deliver these services are well within the grasp of many IT resellers.

Managed services

There is also extra support out there for resellers wishing to enter the managed services sphere. Cisco, for example, has a managed service provider enablement programme that guides small business partners through the managed service offering, helping them sign up to service level agreements (SLAs) and capitalise on new business model opportunities.

This shift brings multiple benefits to both end users and resellers: end-users can simplify their billing and IT support processes and achieve cost-consolidation savings, especially as a managed service often comes through hardware leasing programmes, which helps to cut their up-front capital costs. Resellers can move closer to their customers, find up-sell opportunities, secure ongoing revenue streams and more effectively deliver support and new services.

Already, this new way of providing services to small businesses can be seen across Europe, as organisations including Portugal Telecom, Vodafone in the Nordics and WIND in Italy are already offering small businesses innovative managed services packages based on Cisco technology.

We estimate the managed services market opportunity to be in the region of US$40 billion globally, particularly as small businesses adjust to the ‘economic new normal’ and look to reduce their capital expenditure. Despite the apparent move out of recession, European small businesses are unlikely to return to big ticket spending. The move to managed service provision represents a great chance for resellers to evolve from box shifters to trusted and value-added advisors to their customers.

Natural evolution

Reseller-delivered managed service options can be very flexible and the services can either be customer premise-based and delivered by the managed service provider, or hosted and managed by the partner. These offerings use a partner’s range of skills and services in areas such as design, implementation, configuration, maintenance, monitoring, network access and routing. If something ever goes wrong with the technology, the small business can rely on its managed service provider to resolve any problems.

Moving into managed services for small businesses from scratch may seem an ambitious undertaking for ICT resellers, but it is a natural evolution of the traditional reseller business as the technology and economic environment shift and customer demands change. Resellers need to evaluate their offering and ensure that they are ready for what the new ‘business as usual’ situation holds.

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December, 2020

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