Monitoring as a Service, Part 3: The Implementation

This blog was first published on Service Management 360 on 31-Jul-2013.

In my previous post, Monitoring as a Service: Part 2, the business model, I highlighted the need for a well-defined service catalog including deliverables and work items to be prepared.

After I convinced my wife about the value of monitoring (see part 1) and the delivery model for a Monitoring as a Service business, I wanted to and think about the implementation.

There is a general question we must consider at the beginning. Do we have one monitoring environment for all customers, or should each customer have its own environment? Gaston Hernan Concilio discussed this question in detail in his blog, “To share or not to share: A monitoring dilemma.

Beside this discussion, it is essential to pick the right product to cover all of the following aspects:

  • Monitoring infrastructure

    The monitoring infrastructure should support lightweight as well as enterprise-class monitoring. It is essential that the monitoring infrastructure supports the management of the monitoring software (agentless as well as agent-based), the distribution of the monitoring components and the setup of the environment. A command-line interface is required to set up multiple instances.

  • Monitoring rules

    The monitoring rule definitions have to support simple, single-attribute comparisons and multiple-attribute verifications as well as complex, multistage, rule-dependent decisions. These rules should be stored in a central repository, to be distributed from a central point.

  • Historical data collection

    A wide range of historical data of system performance and availability should be gathered and stored in a central place for later analysis and reporting.

  • Reporting

    This is the central service customers are expecting in a monitoring service, and it is essential that the monitoring tool offers a wide range of reports, including historical availability reviews, activity reports and capacity projections for the future.

  • Multitenancy

    While multiple customers should share the same service it is essential that the product setup supports a clear, unbeatable separation of the customer data and minimizes the influence from one customer situation another.

With all that in mind, I reviewed the capabilities of IBM Tivoli Monitoring, finding that it fulfilled all my requirements except the multitenancy requirement.

The product supports this partially, but several manual steps have to be taken to separate customer environments from each other. Additionally, the licensing agreements stopped me from going for a single monitoring infrastructure for all customers. The IBM SmartCloud Application Performance Management (SCAPM) Entry Edition offering limits the infrastructure to a single Tivoli Enterprise Monitoring Server (TEMS) and does not allow any remote TEMS implementation. This leads to the following architectural approach:

Each customer gets its own IBM Tivoli Monitoring (ITM) Infrastructure (TEMS; Tivoli Enterprise Portal Server, TEPS; Tivoli Data Warehouse, TDWH) and reporting engine (Tivoli Common Reporting, TCR) together on a single OS image. On request, the service provider provides this image, including the required server hardware (if requested). Each image is generated from an installation script (IBM provides VMware images for SCAPM Entry) and has an agent depot containing all licensed agents. The agent depot is to distribute the agents to customers’ systems.

To gain control across multiple customer instances, we add IBM Netcool OMNIbus as an event consolidation engine. This enables the consolidated view across all connected customer environments. Each single customer might view its own data in its own monitoring environment and might run ad-hoc reports. The access to the OMNIbus implementation is for the service provider only.

This implementation also offers the ability to provide a different kind of service quality to a single customer (Gold – Silver – Standard). Based on this architecture, additional Information Technology Infrastructure Library (ITIL) compliant processes may be introduced as further offerings to the Managed Service Provider’s (MSP) customers.

Is this environment manageable?

This setup is manageable if we have high grade of automation for the installation, implementation and maintenance. All tasks have to be designed very well, which is a great job for a system programmer. Or ask your IBM Software Services team for help.

Is this solution good for all business sizes?

For very small customers (with a small number of systems) a dedicated monitoring service seems to be a little bit oversized. Depending on the customer’s expectations, a shared environment with lightweight monitoring might be good enough.

I do not expect my dentist to watch the health of its computer systems. The dentist should take care of me. But I expect my dentist’s computer systems to be up and running and to support its service to me.

So it might be useful to set up a shared ITM environment, without customer access, inside the MSP domain and connect these customer systems to that environment.

As Gaston mentioned, it is about “the best for you,” and I’d like to add: “and for your customers.”

In the fourth part of my blog series, I will shed some light on the procedures we need to put in place to run this Monitoring as a Service business successfully. What do you think? Please share your comments below.

Monitoring as a Service, Part 2: The Business Model

This blog was first published on Service Management 360 on 24-Jul-2013.

After my wife agreed on the business idea for Monitoring as a Service (see my previous post for the story), her first question was about the business model and how it might pay out.

To overcome this challenge I created a spreadsheet where I listed the important elements of a Monitoring as a Service solution:

The service catalog

The list of services I wanted to offer was the starting point. I tried to be as precise as possible and identified the service items that I would and would not charge to my customers. I included everything that is essential for performing and preparing the service. So we also may call this work items.

After having established the service catalog, I added the following columns to my calculation sheet and added the appropriate numbers for each work item:

  • The customer price

  • The labor expenses to run the business

  • The hardware and software expenses

This led to a win-and-loss calculation for each work item. The distilled numbers showed a positive outcome, but there was something missing in my calculation:

The initial investment

Before I can start with the business, I have to prepare myself to have all work items available for delivery. This is the investment I have to take ahead of time. Adding this enabled me to understand how often to sell a specific service and how valuable it is.

In the sample calculation shown below, I based the projection on IBM Monitoring products (this is where I have deep experience), and I planned the activities and numbers accordingly.

The first interesting discovery was that the software expenses are not as critical as often reported. Adding additional services reduces this quota dramatically. Imagine 24/7 support (not in the calculation) or problem fixing services. Problems arising in the customer environment could now be quickly identified and also handled according to the service agreements in place. It is up to me, to get valuable service agreement in place with my customer.

Reporting is another service I will offer to my customers. This ensures, that the customer is always aware of the value the Monitoring Service generates. The customer will receive a set of reports showing the availability and resource usage of its IT components and also will see, which actions have been taken by the service to achieve these availability results.

The investment for setting up and getting up to speed with monitoring can be pretty high. That’s why a lot of customers don’t monitor or do so only to a very limited extent. This investment pays back with the number of managed systems, and for service providers with the raising number of customers.

The above chart highlights and is a direct outcome from the calculation sheet. I assume I’m going to be able to convince one new customer every month, and every new customer has approximately 50 managed systems. If I do so, I will have a win of about $700.000. (end of projection after 20 customers).

The calculation sheet gives you some insight on which areas to take special care for. The ramp up investments are pretty high. The preparations for delivering the monitoring service have to be planned well and have to be reviewed carefully to minimize expenses in that area. These costs dramatically drop if the preparation phase can be shortened and the delivery model is supported by the product itself. With IBM Smart Cloud Application Performance Management, IBM provides a new software distribution model with preconfigured virtual machine images, including everything you have to have to set up a reliable monitoring and reporting infrastructure.

Especially for businesses that currently have no or only a little experience with professional, enterprise class monitoring, it is essential to get guidance how to set up such a service, regarding repeated installation, packaged monitoring solutions and multiple instance management. IBM Software Services is available to help you minimize these initial costs.

Getting this Monitoring as a Service offering properly prepared is one key factor for a successful business. The other key is the identification of the correct customer set. Monitoring services require a good, trustful relation between the service provider and the customer. It is essential that the customer accepts the fact that the service provider is able to control the monitored systems in a holistic approach. This is often true in small businesses, where the machines are already maintained by the service provider. This offers the service provider the ability to add valuable services like 24/7 monitoring, off-hour office support, automated alarming and so on.

These items might be worthwhile to add to the offered services catalog and will be drivers to create an even deeper relationship with your customers.

In my next post I will discuss the steps to prepare for a Monitoring as a Service request. So stay tuned to Service Management 360 for more.

Monitoring as a Service, Part 1: The Business Idea

This blog was first published on Service Management 360 on 18-Jul-2013.

Over the last few years I have presented several business ideas to my wife, but all were rejected. The Monitoring as a Service idea, however, passed her first review, because she understood the value of such a solution for her own business needs.

My wife’s business is not information technology (IT) related, but it relies on IT, as a lot of businesses out there do. It is essential for these businesses to have reliable IT, but watching out for their IT all day is not their core business. Smaller and mid-size companies cannot afford to frequently monitor the availability of their IT services. On the other hand, the loss of IT services may lead to significant losses in their core business.

That’s where I’d like to step in and provide the required features as a service offering. The businesses want to have stabilized IT services, but they don’t have the time, the money, the knowledge and the willingness to invest in huge IT resources or to set up a well-defined monitoring and operations center and 24×7 support organization. This kind of monitoring is a highly specialized discipline within IT, and it requires very skilled personnel to perform it in a professional way.

Is the market there?

Eighty percent of all employees in Germany (this might be different in your country) are working in businesses with 20 to 500 people. Lots of these companies have only very limited IT resources and IT know-how, and they rely on the support of their IT provider. In most cases these computer systems are there because they support essential parts of the client’s daily business. Without these systems the business would not work.

Imagine a mid-size tax adviser with 50 consultants, billing USD $100 per hour to their clients, who opens their office on Monday morning at 8:00 a.m. and quickly realizes that something is wrong with their IT system. They call their IT provider and open a high-priority request to get this fixed (first 15 minutes—gone). The IT specialist will come on premise (another 30 minutes, assuming the IT provider is nearby and available) and will start to analyze the issue. After testing this and that (30 more minutes) a broken network card is identified as the root cause for this outage. After bringing a new network card onsite and returning to the IT service provider’s office (another 60 minutes), the system can be restarted and the service can be reinstated.

In summary, this outage took a few hours and led to a loss of revenue of about USD $15,000. With monitoring supported by a service provider this outage could still happen, but it may have been identified by the weekend and the service provider could have it fixed before Monday morning. That’s what I call a business case.

How could it work?

To provide this kind of monitoring service it is essential to offer a reasonable and competitive price, and to have all required processes strictly under control. In my next post, I will shed some light on which processes to implement and the business model behind Monitoring as a Service.

Two questions are still open:

First, why did I write a blog post about this business idea, instead of going out and starting a monitoring service offering myself? Well, I have quite a nice job at IBM, and because of that, I don’t know enough small and medium business (SMB) customers. The story told above is from one of my business partners. Together with him, I currently implement this service.

And second, what is my wife’s role, that she is able to stop my business ideas? I will follow up on this question in one of my next blog entries on this subject, so please stay tuned.