Monitoring as a Service, Part 1: The Business Idea

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

http://www.servicemanagement360.com/2013/07/18/monitoring-as-a-service-part-1-the-business-idea/

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.

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