Few industries change as fast as Information Technology. Each year, technology changes dramatically alter the vendor community available to small and mid-market firms. Cloud technologies are leading the next wave of change. For the market that means a return to traditional service models and away from the fixed-fee, managed services approach that has dominated for the last decade.
Joe Gleinser, GCS Founder and President, had this to say in the August 2015 issue of ChannelPro Magazine:
[Traditional fixed-fee approach] put us in conflict with our clients on a regular basis. We found ourselves saying we couldn’t do something because it wasn’t in the contract, or that we’d have to raise prices. With the model we have now, the interests of the client and the provider are better aligned.
Fixed-fee managed services arose to address a hard reality of IT - the amount of service needed by a small business varied dramatically month to month. Why? A fifty person business in 2005 could easily have had five or more servers. One or two server failures can require 20 or 30 hours of labor. This produced hourly invoices that contributed to our clients' high blood pressure.
In 2015, those five servers are mostly gone.
They've been replaced with Office 365, Salesforce CRM, Amazon Web Services, and other cloud applications. The core driver of the variable costs for IT support is gone. So have fixed-fee managed services companies reduced their price? For new clients, yes. If you've been under contract for a few years, chances are good profits are soaring for your managed services company.
The industry's shift to a fixed-fee model alienated many mid-market firms with internal IT staff. They were mostly independent but needed help on large upgrades and, occasionally, on support tasks. Unfortunately, their traditional vendors either moved to a fixed-fee approach or were bought out by those that had.
GCS Technologies is spearheading the return to hourly services pricing better aligned to the technology of today. Our On-Demand model enables our clients to buy the IT services they need, when they need them. This model with cloud technologies aligns IT expenses with business activity.
Contact us today to see if on-demand technology support is right for your business.