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The Next Wave

Gartner says that midmarket CIOs will struggle to adequately staff their IT organizations in the near future and that SMBs should consider managed network services for a long list of IT flexibility, cost, and staffing reasons. I couldn’t agree more, and I’d like to discuss these issues in this blog.

Managed Services will become a monstrous industry over the next few years, and Aerohive has aligned its product portfolio, in a variety of ways, with this new market trend. As an innovation leader in wired/wireless and remote-access/VPN networking, Aerohive offers public and private cloud management solutions and cloud-based applications and is poised for dominance as this “Next Wave” hits.

Wi-Fi’s Next Wave: defined

What is this Next Wave that I’m speaking of anyway? Here’s the long-winded version … and keep in mind that I’m primarily addressing the Wi-Fi piece of the equation.

Well first there’s the BYOD problem. If you haven’t heard of the BYOD problem, then there’s a three step program to get you up-to-speed: 1) stop doing whatever you’re doing that is making you clueless, 2) Google BYOD, and 3) agree that BYOD is a problem. The BYOD problem is causing significant device density and complexity on most mid-market and enterprise networks (including varied users, operating systems, devices, locations, and security scenarios).

Next, there’s the “build it and they’ll come” problem. Users are putting everything onto the Wi-Fi and Ethernet networks: clocks, picture frames, weather radio, security cameras, kiosks of all sorts, pricing terminals, Apple TVs, projectors, sensors, and of course the list is absolutely endless. Pretty soon, there will be so many devices connected to an access point that it will be simply hard to believe when you see it. There will be many Security/QoS/User/Device/Application scenarios to consider in the network design, and the design will be focused around identity, mobility, density handling, security, management, reporting, and troubleshooting. It’ll be a tall order for sure.

The Next Wave is when networks become so complex and so dense, with near-ridiculous requirements, that an entire market segment – the mid-market (Gartner calls it the SMB) - simply can’t afford to deal with all of the problems. Network Engineers that have the appropriate level of training and experience are simply too expensive when you factor in salary, benefits, on-going training, the inefficiencies of working within a single employer’s environment, and all the rest. Enterprise-class equipment itself may be expensive depending on the type and amount needed, but designing, installing, configuring, maintaining, and managing the network could cost significantly more than the equipment over time based on the staffing involved.

Managed Services to the Rescue

Manufacturers will all market in the same way in the years to come: “Our equipment is magically automatic, so it takes less people with less skill to operate our network.” That may be true if their gear is feature-less, but feature-rich, enterprise-class systems are diametrically opposed to being completely automatic in their operation by their very nature. This means that while manufacturers are trying to figure out how to solve these problems in an “automatic” way, skilled people will have to solve these problems for the time-being. Highly-skilled people cost money … hence Gartner’s report. This applies to every type of networking equipment: Wi-Fi, Ethernet routers and switches, WAN optimizers, storage, authentication systems, and much more.

It’s a sizable problem for sure, and this is where Managed Services comes to the rescue, filling a big gap in the mid-market. Managed Services can apply the right amount and type of resources (e.g. equipment & people) to a customer’s needs/problems without as much waste or risk by “OPEXing” the cost structure for both equipment and people. The cost of human resources within a Managed Service Provider (MSP) can be spread across a number of customers, giving each customer better value due to economies of scale.

Engineering level employees are expensive, and if they do their job well, they often work themselves right out of a job (e.g. things work properly, and there is possibly less work to do). In many organizations, only an administrative person may be needed as a full-time employee, and an MSP could serve in place of one or more Engineering level employees, offering a very high level of skill but only as much time as actually needed “on the clock.” This equates to lower employee count and cost overhead, lower risk, and more organizational efficiency for the customer.

Customers can simply give an MSP a list of service requirements and expect them to contractually deliver the necessary services, complete with SLAs. MSPs will be able to offer full redundancy and massive scalability as part of their architecture, added services (MDM, Authentication, Guest Services, etc.), and usually a distributed workforce with quick reaction times as part of their offering. Neither of these may be possible with internal employees, depending on the number, skill level, and location of the employees.

Many organizations buy enterprise equipment expecting the equipment to last at least 5 years. That means that for the first 3-4 years, they aren’t maximizing their investment. In other words, they are over-buying with the thought that the equipment has to meet their organization’s needs for the next several years. Suppose that they could outlay only as much money as would meet their need(s) for 1-2 years, and they could outlay these funds by the year. MSPs can upgrade the customer’s network as-needed over time. Would this be attractive to some organizations? I think so. It prevents over-spending and minimizes risk.

Who’s on First?

So are there any well-known companies already pioneering the MSP approach? For starters, Aerohive and iPass have recently announced a Managed Services partnership. iPass is focused on an enterprise-class offering with true SLAs. iPass is certainly well-known for providing Wi-Fi and VPN access to hospitality, retail, business travelers, and service providers. In the future, MSPs will be asked by enterprises to design, install, configure, and manage not only Wi-Fi, but Ethernet, remote-access/VPN solutions, MDM, firewalls, WAN links, and much more. iPass is certainly well ahead of the current market curve.  

In the retail space alone, there’s currently a significant, high-speed shift to Wi-Fi happening for Point-of-Sale (PoS) systems, guest access, coupon delivery, and product location, and keeping up with the rapid and complex market and technology changes while maintaining compliance with requirements such as PCI isn’t a simple task. It requires leading-edge technology in the hands of leading-edge experts, and that’s where partnerships like iPass and Aerohive bring value to the market. The BR200-WP, Aerohive’s expandable Branch-in-a-Box (Wi-Fi-enabled, VPN, PoE Switch/Router) is an example of the innovative solutions being offered by iPass to its customers within the retail sector.

Some Cool MSP Advantages (not a comprehensive list)

There are some pretty cool advantages that an MSP can bring along for the ride, depending on the MSP’s offering.

  • Managed site-to-site VPN connections can easily beat the cost of MPLS circuits.  
  • Redundancy is inherent to any MSP’s solution, so it’s not really something you’re likely to pay extra for.
  • Given that an MSP is likely to have more technical resources than the customer, letting an MSP design, install, and configure the network (especially across a number of geographically-dispersed locations) is likely to equate to a much faster launch time for the network. This also applies to moves/adds/changes, and more efficient network installation/changes can equate to a customer being able to run their business more effectively.
  • An MSP is responsible for being intimately familiar with industry best practices (security, density, scaling, etc.) and legal/industry (PCI, HIPAA, SOX, etc.) regulations.
  • Flexible network resizing. At times you may have special events, situations, or changes in your network requirements that require that the network be resized or reshaped. An MSP could easily handle this “on-demand resizing/reshaping” as part of their normal management process.
  • The MSP is responsible for being up-to-speed on the latest technologies, market trends, available products, and best practices. The customer doesn’t have to worry about employee training, which vendor’s equipment is best for a particular need, and so on. The MSP simply meets the customer’s needs based on a contract.
  • An MSP can do Proof-of-Concept (PoC) testing of a solution before it’s chosen/installed to make sure the required hardware and software features work properly and will meet the needs of the customer. Further, when code updates with new features become available, the MSP can do testing of the updated code prior to a production roll-out.

SLAs: The Great Differentiator

Over time, there will be many VARs that also call themselves MSPs, providing some type or level of managed services. The differentiator between these so-called MSPs and the MSPs that can significantly enable a customer’s business to succeed will be in the Service Level Agreements (SLAs).  SLAs are essentially service contracts that spell out exactly what the provider agrees to do for the customer and what happens if they don’t provide the service as required. Giving it a little thought, the better the SLAs being offered, the more proactive and integrated into the customer’s organization the MSP will have to be.

With Aerohive, some specific SLAs that seasoned MSPs will focus on (not a comprehensive list) will likely include:

  • Network deployment time
  • Throughput per device
  • Network uptime
  • Client health

Hopefully this gives you a reasonable picture of how the MSP model makes sense to meet the requirements of The Next Wave, how it can help you if you’re a VAR or prospective customer, and prods you to take a closer look if you’ve previously given it any thought. Happy hunting!

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