The VAR Guy Blog

Why Top VARs Embrace ISMO Opportunities

Check in with profitable, customer-centric VARs, and you'll discover a growing number of solutions providers leverage ISMO (independent service & maintenance organization) opportunities. But where did the ISMO business model come from? How has it evolved? And how are today's solutions providers addressing multi-vendor customer support with ISMO solutions? Here's everything you need to know.

There are three time periods that define the delivery of IT Service & Maintenance and how customers have been best served. They include...

IT Service & Maintenance 1.0 to 3.0

This spanned:
  • 1.0 - The Mainframe era  IBM & The BUNCH
  • 2.0 - The Client Server or UNIX & PC era- Sun, HP, IBM & SGI
  • 3.0 - The Enterprise truly becomes a Multi-Vendor environment -- One vendor does not own the customer anymore
Let's take a closer look at each era...

1.0 - The Mainframe Era

In the early days of corporate computing the choices were very limited both for hardware purchase and service & maintenance. The choices were IBM or the group of mainframe computer competitors to IBM known as the BUNCH: Burroughs, UNIVAC, NCR, Control Data Corporation and Honeywell.

Until the 1980’s mainframe vendors were a virtual one stop shopping experience for corporate computer buyers. Maintenance & service on hardware were purchased from the manufacturer.   There were few if any alternatives.  An “IBM Shop” was an “IBM Shop” as was a “Burroughs Shop” a “Burroughs Shop," etc. The multi-vendor cross-platform environment did not exist.  In a nutshell companies bought hardware from one vendor and were serviced and maintained by the same vendor.

This type of single source for computer needs actually made sense and best served the customer’s needs of the time.

2.0 - The Client Server Era or the PC meets UNIX

The introduction of PC’s and UNIX systems into corporate computing in the 1980’s & 90’s initiated the introduction of alternatives for IT service & maintenance. During this period many “third-party service & maintenance” companies arrive on the scene such as Intelogic Trace, Decision Data Services, IDEA Servcom, Bell Atlantic Business Systems Services and about 30 other players.

During the 2.0 era, corporations started to see the value in having options to their hardware manufacturer’s service and maintenance offering. Even if they did not contract with the “third-party” they did serve as a great leverage point in getting the manufacturer to price service & maintenance at a more realistic price point.

The days of the hardware manufacturer having a monopoly on service & maintenance were coming to an end. In fact, in 1995 during the acquisition of Bell Atlantic Business Systems Services by Decision Servcom CEO Ken Draeger said, “As computing installations become increasingly diverse, few, if any, OEM’s can meet the burgeoning needs of the marketplace.”

Still challenges during the 2.0 era emerged, including:
  • Availability of parts
  • Availability of qualified technicians
  • Complexity of problem resolution
  • Precipitation in the marketplace
3.0 - The Enterprise truly becomes a Multi-Vendor environment

In 2010 the idea of one hardware manufacturer “owning an account” and that manufacturer supplying all the IT needs simply does not make sense. The Enterprise in 2010 is more diverse than Draeger even envisioned in 1995 and is truly a Multi-Vendor environment.  A typical Enterprise environment in a simplistic sense could consist of Sun, EMC, Cisco and Dell.

The benefits gained by having a Multi-Vendor environment also create problems in using each individual hardware manufacturer for IT service & maintenance. The resulting problem is service agreements are split among vendors whom often are also competitors.

As the number of vendors increase, costs rise and service often declines. IT staffs spend more time managing service agreements and determining which vendor is responsible for service & maintenance at a given point. Compounding the problem is the fact conflicts arise, finger pointing starts and no one takes ownership of the problem.  This creates uncertainty, wastes time and resources, ultimately delaying problem resolution.

As Enterprise IT hardware requirements have evolved so have their requirements for IT service & maintenance.  Furthermore as the Multi-Vendor environment has become the norm an optimal alternative to traditional OEM maintenance or traditional third party maintenance has become apparent.

ISMO Solutions Solve Maintenance Challenges

The IT Service & Maintenance solution for today’s Multi-Vendor environment is an Independent Service Maintenance Organization (ISMO). In other words, ISMO is IT Service & Maintenance 3.0.

Simply put, today's ISMO 3.0 approach addresses the challenges from the 2.0 era, including:
  • Parts are readily available and easily sourced
  • Availability of qualified technicians has compounded exponentially
  • Problem Resolution has improved due to integrated diagnostics and plug in parts
  • Perception is evolving…today the Enterprise is a level playing field, whoever has the most flexible agreements, superior service at an economical price point is the IT Service & Maintenance      organization that wins the business
Multiple trends have made the ISMO and IT Maintenance & Service 3.0 model a logical choice for solutions providers and their customers in 2010. The trends include:
  • IT Budget constraints and cost cutting initiatives
  • Component architecture and integrated diagnostics
  • Readily available plug in parts
  • The desire to call a domestic based help desk instead of offshore
  • The need to talk to a Technical Account Manager instead of a “call Center” employee
  • The need to have one organization own the problem from first call until the problem is resolved
  • The need for total flexibility of agreements
  • The need to eliminate hardware certification or recertification fees
  • The need for the IT Service & Maintenance organization to have no manufacturer bias and be hardware neutral

Service Questions and ISMO Solutions for VARs

As VARs --and their end-customers -- consider service and support issues, they need to keep a few key questions in mind:
  1. Ultimately what best serves the end customer?
  2. When there are Multiple Contact Points for support, customers often spend lots of time asking "which piece of the IT puzzle caused this problem?" and ultimately, which vendor is responsible for fixing the issue?
  3. Are OEM support prices over priced? And if so, how can end-customers overcome that pricing issue?
  4. Is there SLA (service level agreement) flexibility?
  5. Does the end-customer understand the difference between a Call Center vs. a true Technical Account Manager?
  6. Is the support Off shore vs. Domestic?
  7. Are Certifications or Recertifications needed?
With those seven questions in mind, savvy VARs are embracing the ISMO customer support model. Here's why:
  • The customer receives one point of contact for all potential service issues.
  • TAM (Multi-certified) vs. a call center
  • There's flexibility of SLA’s
  • No equipment certification or recertification is required
  • There's no vendor bias – the ISMO approach ensures independent, comprehensive support
  • The ISMO approach reduces hard and soft dollar cost
The bottom line: Should a customer pursue support agreements with all of their vendors (Sun, Cisco, Dell, EMC, etc.)? Or is it wiser to wrap everything under one ISMO support agreement, offered by a trusted VAR?

The answer seems obvious.

Christine Callahan (pictured) manages channel and alliance programs for ServiceKey. Monthly guest blogs such as this one are part of The VAR Guy’s 2010 sponsorship program. Read all of her guest blogs here.

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