Over the next few years, Asia is poised to see tremendous growth in the area of managed services, according to Value Advantage.

Managed services is the practice of outsourcing the implementation, support and maintenance of IT systems to an external provider, which allows organisations to focus on their core business activities. According to Frost & Sullivan, organisations in the Asia-Pacific region are expected to spend over US$10.25 billion on managed services by 2010, up from $6.47 billion in 2007.

Value Advantage is Asia’s first host of Canada-based Level Platforms Inc’s Managed Workplace, the industry-leading Remote Monitoring and Management (RMM) platform designed exclusively for use by managed service providers (MSPs).

It's RMM products include management of IT systems' architecture, monitoring, managed cloud services, alerting, alerts Viewer, remote Control, out-of-band management, patch Management, scripting, bandwidth monitoring, asset management, asset tags. policy modules, reporting, customised user interface, trouble tickets, 3rd party integration, collaboration, on-premise or hosted solutions.

However, many managed service providers (MSPs), especially in Asia, work on an inefficient model of reacting to problems only after they start to affect the customer's day-to-day operations or what is called “firefighting.”

Furthermore, many small-to-medium enterprises (SMEs) don't take advantage of the full value of their IT systems; rather, they have simply purchased the equipment for the sake of adopting technology in typical kiasu fashion as they say in Asia.

So how should MSP’s aim to counteract both these problems? How can remote monitoring and management (RMM) enable MSP’s to better serve their clients as well as increase productivity and efficiency for themselves?

Well, Value Advantage is confident that its RMM products will help MSPs to better serve SMEs in Asia.

However, based on the past experiences of other service providers, they found Asian SMEs to be resistant to embrace remote services.

One was Biztone.com, established in Malaysia the late 1990s by an Australian Darryl Carlton who headed Datek, a middleware provider.

The name “Biztone” was derived from the term “dialtone” used by American telephone companies to denote availability of telephone service, rather than the tone end-users hear when they pick up the handset of a single line phone and put it to their ear and Biztone's business model was to provide subscriptions-based accounting solutions accessible on PCs' web browsers over the Internet and charge according to usage, much like one would pay for telepone calls made – ie. as and when required.

At the time, Carlton mentioned that they faced problems winning customers from among local SMEs, due to their concers with entrusting their confidential information to a third party and also due to a common practice of mantaining two accounts records – one for the taxman and another for the company.  

By 2000, Biztone had moved its marketing operations to Singapore, hoping to gain more traction from there and despite trying really hard with advertisements on many taxis and so on, Biztone eventually closed and Carlton returned to Australia, where he still remains active in IT.

Another case was Entellium, a company established in Malaysia in 2000 by several British partners to provide customer relationship management solutions online to SMEs also on a subscription basis.

Faced with similar reluctance among SMEs here, Entellium moved its corporate headquarters to Seattle, Washington in 2003 to take advantage of the more favourable acceptance in the United States, according to its chief executive officer (CEO) Paul Johnston. The company retained its research and development operations in Malaysia.

However, Entellium faced a more unfortunate ending when Paul Thomas Johnston its former CEO and Parrish L. Jones its former chief financial officer were arrested and charged for inflating its 2006, 2007 and 2008 revenues by as much as almost eight times to attract investments.

The company filed for Chapter 11 bankruptcy  protection on 2 December, 2008, in preparation for the sale of some of its assets to finnacial software company Intuit.

Biztone and Entellium provided their solutions on an applications service provider (ASP) basis, or what's more fashionably called “cloud computing” today, and while that's not quite the same thing as managed services, still it raised doubts in our mind as to how well Singapore-based Value Advantage would fare among Asian SMEs.

So we raised our doubts with Greg Lipper, CEO of Value Advantage.

Comm & Tech Asia: Will this outsourcing(IT) trend in Asia primarily take place amongst large enterprises and organisations, especially multinationals based in Asia and large Asian-owned corporations?

Greg Lipper: IT outsourcing has been common in Asia in the large enterprise and government domains for many years, but it has often been implemented differently than in the West. Sometimes just specific functions like user support, network audits, and/or procurement are outsourced. Other times, especially in Japan and Korea, a conglomerate will create a company that supports the IT needs of all group companies and then also tries to sell their services outside the group.

Outsourcing has been common in the SME domain for many years as well, but it was event-triggered services. Break / fix, installations, migrations, and new software implementation are common tasks and functions that SMEs have outsourced to IT service providers. What is new is the trend towards managed services, which is a further step on the IT management evolutionary path than fire-fighting services. Managed services are proactive, not reactive. They offer the user the benefits of predictable costs and guaranteed service levels. They also offer the service provider the benefits of recurring revenues and scalable business model. We believe the managed services trend within outsourcing will accelerate in Asia, especially within the SME category,

CTA: What other types of companies and organizations have or will embrace outsourcing of these services?

Lipper: There are only two types of companies that will not embrace managed services: 1) those that do not need IT to achieve their business objectives, and 2) those that for whatever reason would rather manage their IT with their own employees. The second group could range from one man companies that use just a notebook and printer to companies with such extreme security requirements that no third party can be allowed access to their network.

CTA: Also, what percentage of them in Asia already have?

Lipper: To come up with a percentage we have to first know the total. How many companies are there in Asia? If I had to guess, I would say 85% of Asia’s SMEs outsource IT management functions in some tactical way and 5% do it in a strategic way, but that is just a guess based on my own personal observation.

CTA: Asia is a big place with huge variations between developed and developing countries with huge differences in levels of sophistication, so in which parts of Asia is the outsourcing trend the most pronounced?

Lipper: Excellent question, with two answers. The first answer is that outsourcing per se is equally common across advanced and developing nations. The second answer is that the way outsourcing is approached is different across national markets. In addition to variations in corporate relationships and degree of outsourcing, there is also a big difference in the degree of automation. In developing countries, human resources are very inexpensive so it is easy to perceive technology as being relatively expensive. “Why should I spend so much money on remote control, when I can send an engineer to the customer to fix the problem so cheaply” would be a common questions asked in developing markets. The answer to that question is that technology provides scalability, automation, accuracy, and repeatability that humans simply cannot regardless of how low their salary is. We are bringing the cost and pricing model of the technology within the reach of service providers in developing nations so they can try for themselves with no risk and very limited expense. We believe this will further drive the managed services trend within the developing nations.

CTA: On this point:- "However, many managed service providers (MSPs), especially in Asia, work on an inefficient model of reacting to problems only after they start to affect the customer's day-to-day operations."

And I let out a huge sigh at how not only managed service providers but almost all Malaysian service providers, including all the way up to the government of Malaysia are guilty of this, as can be seen in clogged roads at peak traffic periods, overcrowded commuter trains.

Firefighting and a cheapskate attitude are common among Malaysian managements and perhaps Asian managements in the less developed countries which are just emerging from largely agrarian-based economic activities, while a handful of the most advanced Asian economies have understood, embraced and adhere to the systematic, disciplined practices which have become a part of the culture in industrial economies.

Also, there is a question of cheapskate Asian managements which perhaps due to lack of money, tend to cut corners.

So how will VA's solutions alter what fundamentally is a cultural problem, especially amongst managed service providers in the more backward Asian countries?

Lipper: VA will succeed not in spite of these cultural inclinations but BECAUSE of them. VA is not about technology. VA isn’t really about outsourcing. VA is about giving people what they want. SMEs want to get better value for their money and be referred to new customers. We do that for them, so they join the VA buying club. IT service providers want to sell and deliver more services to more clients more profitably. We reduce their service delivery cost, increase their service capacity with our technology and refer new clients to them from the buying club, and send the buying club purchase orders through them. Marketers want a quick, easy, cost-effective, and measurable way to delivery targeted offers to well-defined groups of SMEs. We give that to them. The buying club creates the market. The technology enables the targeting.  It is our “indirect benefits” business model which enables everyone to get what they want and shifts the focus off the technology and to the business benefits.

This model can be used to solve any problem where there are three parties who can each be better served if better information and communication between the three were possible. When we are done revolutionizing IT, we will move on to change the way medical services are delivered through proactive 7X24 monitoring of patients and reporting back to a doctor’s alerting system. After that, insurance.

CTA: "..many SMEs are not leveraging the full value of their IT systems; rather, they have simply purchased the equipment for the sake of adopting technology."

Another huge, sigh and indeed the worst offender again being the government of Malaysia and its agencies, which waste million buying the most sophisticated and expensive equipment - IT and otherwise – in typical "gotta-have-it" fashion, only for them to go to waste and become places for birds to build their nests in or a home for rodents.

So when you give roses to monkeys - how can MSPs which are equally cheapskate, be able to counteract both these problems among SMEs without major cultural changes starting with them first?

Lipper: Well, we’re not here to fix government problems. That is a job for someone with a bigger bank account and much more patience than I have. I’m focused on helping SMEs achieve their business objectives within the budget they have. It has been my experience that if you show a business owner a better way to accomplish an objective for less money and/or in less time. They will do it. Those are the people we are here to support. Governments can fend for themselves. Not our problem.

CTA: What use will be Remote Monitoring and Management (RMM) to enable them (MSP’s) to better serve their clients as well as increase productivity and efficiency for themselves without a major cultural change?

Lipper: We aren’t here to change cultures. We present business benefits with no cultural change necessary. RMM gives you the data you need to make better decisions and the tools you need to implement those decisions remotely. Better, faster, cheaper.  In the VA model, the technology costs less per month than the cost of going to the customer site once. We drive more business to you AND we provide the client with more value than the cost of the service provider’s services. The only cultural inclination in Malaysia, or anywhere in Asia, that concerns me is the natural cynicism and skepticism towards new ideas. If people will open their minds to this new approach for just a few minutes, they will see the benefits, but one does have to set aside their vision of reality to be able to see a new possibility. Progress is a function of taking your past out of your future and THAT requires a mental flexibility that is not always abundant in Asia.

Well, a good point Lipper made above was that Asian SMEs are already accustomed to outsourcing the implementation and maintenance of their IT systems to outside parties. In fact, a friend of mine, a former Olivetti customer service engineer provides such services to maintain the PCs and networks of SMEs, including hardware shops, law practises and even those of pest control company Rentokil in Malaysia.

This is much like how householders call in the eletrician or plumber to fix problems in their homes or how we get a motor mechanic to fix problems with our car. So it's not too difficult for them to take that next step to accept managed services.

Comm & Tech Asia wishes Value Advantage all the best in their endeavours. Further information on the company and its solutions are available at www.valueadvantage.asia