A Roundtable Discussion with Presidio and Cisco about the Future of Managed Services
Ryan, let me start with you. Looking at the services industry overall, do you think that managed services is at a tipping point? If so, what impact do you see on Presidio’s managed services business?
Ryan Jordan: The industry is definitely at a tipping point. The demand for managed services is growing exponentially, and so is Presidio’s managed services business. In fact, it’s the fastest area of growth in our business.
Jim, do you agree with Ryan about reaching a tipping point in the industry? If so, why do you think clients are looking more actively at managed services?
Jim McDonnell: I completely agree. I think there are several factors making managed services more attractive to IT. Companies have a much greater comfort level about moving a portion of their operations into the cloud, because the cloud has credibility. IT organizations have strong incentives to streamline their operations and save money. They don’t feel like they need to do all the heavy lifting themselves, because they know that doing everything on-premises comes at a premium.
Ryan Jordan: We’ve all gotten used to not being physically located in the same place as our resources or colleagues we work with. Control is still important to IT, because they have ultimate accountability, but there’s increasing awareness that you can have control without physically touching and managing every technology asset.
Jim McDonnell: To amplify what Ryan said, we talk about Fast IT, which is basically the need to accelerate the delivery of technology to the enterprise. Everyone used to talk about business agility, but Fast IT is about IT agility. The degree of speed and responsiveness expected of IT organizations today is truly staggering.
So are customer preferences changing, or are the offerings of managed services changing?
Ryan Jordan: It’s actually both. Clients have more of an interest in what managed services have to offer, and managed services are changing to align better with what clients need. ServiceGrid makes managed services more flexible than outsourcing contracts of the past.
Doyle, let me direct this question to you. Can you explain the difference between the “old managed services” and the new?
Doyle Bar: I think IT has been hamstrung by rigid, long-term outsourcing agreements. What we hear from clients is that they want more agility and flexibility—for managed services to be tightly aligned with their business. The managed services model has to be more fluid and adapt to the ebb and flow of the customer’s business. The old long-term contracts locked clients into very specific service levels and equipment. They also locked clients out of partnering with other companies that might be a better fit for other technology areas. The intention was to protect the customer, but changing those contracts when something major happened in the business—like an acquisition—was nightmarish.
What’s the more modern version of managed services?
Ryan Jordan [laughing]: We didn’t get up one morning and say, “Hey, we need to be in this business. Let’s go build a NOC.” Moving from the design and deployment to help with the operational side of using technology is a natural evolution. Our managed services business was really an enablement for our clients. We design technology solutions to connect information for a connected world, and we’re purpose-built to manage these environments. We have all of the facilities, tools, and people to help our clients consume new technologies faster and in different ways.
How would the origin of managed services change the way you offer them?
Ryan Jordan: We created an offering that came out of discussions with clients about what they need. Our clients need support at some points in the adoption of technology, and those needs can and do change. So from the start, we structured our processes to be as flexible as possible. I think we’re ahead of the game in the marketplace, because that’s what clients want from vendors: flexibility. It’s true that just off-loading managed services allows IT to be faster on their feet. But offering a managed service that’s also flexible and responsive adds tremendously to IT’s flexibility.
Could you be more specific about how this works in actual practice?
Ryan Jordan: Technology today is so complex, and the interrelationships, integration, and convergence of technologies all add to that complexity. If a manufacturer sets up a managed services practice, they probably don’t have the breadth of expertise that can be critical to the success of the new technology. In contrast, Presidio has a very deep bench in terms of technical expertise. It might be as simple as having us support a big upgrade for a year until the client retires their old equipment. This gives them time to cross-train their operations staff and take back the day-to-day management when they’re ready. Having those options means our clients can pick the model that works for them and change as their needs change.
Doyle Bar: I can add another dimension to that. We’ve never taken a one-size-fits-all approach to managed services. You need to understand business requirements at the industry level at a minimum, and at a company level ideally. For instance, rolling out a new application and updating the infrastructure to support the trading desks for a global financial services company requires a different service approach from supporting the operations for a hospital.
Jim McDonnell: Doyle raises a very important point about the future direction of managed services. A cookie-cutter approach gives you better economies of scale, which supports profitability. But you’re sacrificing the ability to customize offerings by industry or customer—and that can affect your competitiveness.
That’s the way we believe managed services is heading. Presidio is already ahead of the curve with the way they’re using Cisco ServiceGrid™ to evolve their managed services portfolio.
Jim, can you explain what ServiceGrid® is?
Jim McDonnell: Yes, of course. ServiceGrid is a cloud-based solution that integrates IT operations, not just between the enterprise IT organization and the partner, but between all of the partners in their ecosystem.
Ryan Jordan: Technologies like ServiceGrid become so important to helping us achieve both the efficiency of delivery, for profitability, and the ability to tailor that delivery to individual customer business requirements, for stronger competitiveness.
Technology is certainly associated with efficiency. How does ServiceGrid help a managed services provider like Presidio to be more responsive, and align better with the customer’s business?
Ryan Jordan: We take a lifecycle approach to our customer’s technology needs, which means you have to consider how you’ll support solutions during the up-front design. When you think about this aspect early on, it may affect how you design things. It’s more challenging to think in all of those dimensions, but the outcome is a happier and more successful client.
Jim McDonnell: Presidio embodies a new type of relationship between the customer and the managed services provider. Customer needs can change in a heartbeat. They may want to move from fully managed to what we call build-operate-transfer. They may want to use one model for a few months or for years. You just don’t know.
So is ServiceGrid an advance in managed services because of efficiency or because of the way it will change partner relationships?
Jim McDonnell: It goes beyond efficiency or saving time—it’s being able to handle enormous complexity. As the vendor ecosystem grows to support the infrastructure, you have to be able to automate service processes or the effectiveness of managed services delivery starts to unravel. A platform like ServiceGrid makes it simpler and more profitable for partners to manage these complex environments. Presidio is a great example of bringing in ServiceGrid to address one need, and almost immediately seeing potential beyond that.
Ryan Jordan: Originally, we did look at the platform as a way to make our service delivery more efficient for our clients. The more complex the problem, the more important it was to respond quickly. ServiceGrid lets clients see performance as it’s happening. They love the dashboard control and visibility—that single pane of glass. They don’t have to wait for vendors to report on how they performed against SLAs; they can see for themselves. They can also see performance across the interconnected vendors. With ServiceGrid, the visibility is layered and the customer has control over what they see. That level of knowledge is revolutionary.
Is there any other way in which you envision ServiceGrid changing how you enhance your managed services business?
Doyle Bar: From the technical side, we see the ability to simplify our operations, so we’re not staffing one person per customer to keep up with integrations. Now we have greater efficiency in each interaction, and we’re beginning to see economies of scale.
Ryan Jordan: We’re also seeing growth potential. Let’s say a customer wants additional support or technology that may not necessarily be core to Presidio today. With ServiceGrid, we can tie into our own back-end ecosystem to help deliver services to that customer. It’s a great way to get into longer-term strategy discussions. Redefining the partner ecosystem for clients and partners.
Can you or Ryan take us into the future? How do you envision ServiceGrid changing your managed services offering?
Ryan Jordan: We believe ServiceGrid will help create a more level playing field, where partners like Presidio will gain a greater advantage as more parties are connected. Clients can move faster to bring in new technologies without being afraid that they’ll end up with siloed support contracts everywhere, and no integration with the rest of their managed services.
Doyle Bar: CIOs get very excited when they realize that they can select the technology to support what their business
is asking them to do, without feeling so constrained by the partner ecosystem that will be available to support
Maybe one of their carriers isn’t giving them the best service at the best price, so they start looking to expand their ecosystem pool. Instead of integrating with each member of the ecosystem one at a time, everyone connects to Cisco ServiceGrid once, which gives everyone the ability to connect to the others in the ecosystem. ServiceGrid keeps this whole ecosystem cohesive, even as you’re adding and subtracting partners.
When you talk about being more responsive, how fast is fast? Or how flexible is flexible?
Ryan Jordan: If a managed services customer calls us in the morning about something they want to change, we can have something new written up by the end of day. It takes a bit more time if we involve our Professional Services organization, but the managed services piece is relatively fast. Right, Jim?
Jim McDonnell: Typically with acquisitions, it might take months or even years to converge infrastructures. Presidio can bring up the acquired company on ServiceGrid in a few weeks, and the CIO can begin to converge the service process. The acquired company can stay on its own ticketing system during the transition, but IT has a unified process with one pane of glass—which gives a lot more flexibility.
How does Cisco’s Intercloud play in the managed services and ServiceGrid space?
Jim McDonnell: Intercloud gives IT organizations a choice about how they want to deploy cloud, whether that’s public or private or a hybrid approach. With Intercloud, they can make the best decision based on the problem they’re trying to solve.
Ryan Jordan: We can now help our clients take advantage of public cloud assets without the risk associated with putting core applications in the cloud. We manage it through a hybrid managed service—Presidio managed cloud offering—which is all empowered through Cisco Intercloud.
Jim McDonnell: ServiceGrid enables Intercloud deployments that involve multiple clouds from different providers to be supported with a single, integrated framework and a single set of processes across the IT organization. Building the future of managed services together.
How does this forward-looking planning with ServiceGrid and Intercloud require Presidio and Cisco to work together?
Ryan Jordan: We’re in lockstep with Cisco, and we collaborate on nearly everything. We’ve built our business on the Cisco partnership and programs—the programs are really the lifeblood of Presidio, and the partnership is what continues to accelerate our collective growth. I think the collaboration with Cisco has always been wonderful, and I expect that that will continue.
Jim McDonnell: Presidio is a forward-leading partner, and their vision of the future is very much aligned with where we think the industry is going with an integrated service model. We’re working together closely, and learning from some of the early deployments. We’re an agile shop internally within the ServiceGrid business unit, and our intention is to take the feedback, learn quickly, and build it into the product at web speeds.
Ryan Jordan: Today, clients are spending $400 billion on outsourcing services, with very low levels of satisfaction. That’s going to change in a dramatic way. So, yes, our vision is far-reaching in terms of where we want to take ServiceGrid, and where we expect ServiceGrid to take our business.
How about a final word from the group on the future of managed services?
Jim McDonnell: We’re rolling up our sleeves and working together with partners like Presidio to really define what kind of technologies and tools will help drive their managed services and cloud practices effectively into the future. Together, we’re building a unified road map of what that looks like.
Ryan Jordan: The final word is “big,” as in “we’re betting big on ServiceGrid.” Using Cisco ServiceGrid and Intercloud as the platform, with Presidio at the center of that support ecosystem. It will give us a big advantage in our managed services business. Once we pass that industry tipping point, it will be leaps and bounds from there.