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Michael Nikhamov
Chief Financial Officer
12/16/2010
It is very strange to see some IT and Financial executives’ decision process.

Here is an example. A company is interviewing datacenters partner for co-location and full management services of their network infrastructure and servers. The infrastructure consists of about 100 servers and 40 network devices and appliances. After providing them with our proposal we found out that we are the most expensive provider.

We could not believe this. Our prices are very competitive. We certainly cannot get our hands on our competitor’s proposals but after questioning IT staff of the organization we found out that our competitors offer the same colocation AND full management price as we propose for colocation only. We were in shock. We thought that full management would lack some services and started hassling for more information. Asking if DBA services are included, if change control is included, if patching is included – the answer was YES!!!

Having 140 devices infrastructure and including full support pricing in the colocation cost sounded insane!!! How can you compete with this??? And more over how can anyone deliver those services in such budgetary pressure??? Should just close our operation and go out of business???

Here is how we do this. We cannot provide full management services if we do not deploy the client in our management platform. It includes device repository, monitoring, knowledge management, ticketing and task routing system, scheduled activities, change control, backup and recovery controls and other important management aspects. Only by wrapping our management platform around the client infrastructure we can meet SLAs. We would know how the server is doing 24/7. Each server is like a patient in a hospital connected to sensors by multiple wires so nurses and doctors know what is going on. By deploying clients infrastructure on our management platform will allow clients to be certified by SAS70 or HIPPA or PCI relatively easy and painless.

We are patching servers at least once in a quarter. We feel that each server besides monitoring should be visited buy a human administrator at least once a month to just browse through the log. We are sending our techs to check physical alarms on devices every week. We operating backups to stay close or sometimes exceed requirements of SAS70 or HIPPA or PCI.

Besides basics we know that there will be daily client’s requests for changes, performance bottleneck resolutions, tuning, troubleshooting etc. For infrastructure of this size, there will be a hardware problem once in a quarter. There will be a need for security assessments on regular bases etc. 

How can you include all that in the co-location cost?

Well, we were lucky. We got the information from the potential client and figured out what was wrong. The competitor gave them full management including EVERYTHING you can imaging in the IT world but limiting them to only 20 hours per month. It comes to 9 minutes per server per month!!!

If you take into consideration the excitement of the client’s executives that they can get FULL management for that cheap and our way of precisely assessing client infrastructure’s needs and quoting exact services and taking a risk of underestimating needed hours you would understand the disconnect.

Maybe we are just too precise to provide unparalleled consistency. Maybe we are stressing the importance too much?

Through latest sales cycles we can see that our competitors can go away with hazy definitions and still win the business. Get the client in the database canter then figure out how to make money on small things. This looks like novo days strategy of a lot of MSP providers.

I know one thing – the way Digital Edge treat’s its client’s technology – this is the key to the success. This is how IT groups of our clients become successful. This is why Digital Edge shows 100% uptime records for at least last 10 years. And this is why our clients say that their systems are stable and Digital Edge removes the stress from their operations.

   

Replies

Taron on 1/8/2012 1:37:04 PM

Good to see real expertise on dispaly. Your contribution is most welcome.

 

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