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Is AT&T's New Managed IT Services Plan A Threat To You?

The other day I received my VERY FIRST piece of direct mail from a company trying to sell me managed services. I gotta tell ya, it was a little tear-jerker of a moment. Why? Amazingly, even though I've been in business for over 5 years and spent close to $20,000 last year on various IT support services, I have never received ANY type of promotion from ANY managed services company in this area. What makes it worse is that I know there are at least 30 to 40 MSPs withing driving distance of my office.

Not a flyer, postcard, cold call...I mean NOTHING...until now.

But I was a little disappointed about WHO the letter came from. It was AT&T (my phone company) offering their "Total Tech Solution," which is their version of managed services. The plan includes:

- My own virtual US-based IT support help desk that is open 24-7-365

- Automatic security updates

- A pop-up catcher

- Anti-spam software

- An Internet security suite including anti-virus, anti-spyware and a firewall

All for...drumroll please...

$63.90 per month.

And if I sign up now, I'll get a $100 credit on my phone bill PLUS a $25 VISA rewards card.

So my question is this...if AT&T (or any other telecom provider for that matter) started offering managed services to small businesses in YOUR town, is that a threat to your business? If yes, what can you do to overcome it? If no, why not?

My view on it is this...

You are safe UNLESS they figure out how to get the marketing right. Naturally they also have to figure out how to deliver a great service, but keep in mind that they have a lot of money backing them, and they have a HUGE customer base to pull from...something that should not be overlooked, espeically right now when people are looking for ways to save money and cut back.

This - and many other topics regarding recession-proofing your IT business - are going to be discussed at the upcoming Marketing and Money-Making Boot Camp in Nashville, April 2nd - 4th. Don't miss it: http://www.robinsbigseminar.com

 

 

 

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Comments (9)

Mar 16, 2009
andrewjahnke said...
My first thought is that they're going to run into the same challenge as any other massive company trying to target the businesses they've been neglecting for so long (SMBs) - and that's that they're going to lack the boots on the ground. They might be able to out-market us, but if they don't have the ability to do a truck-roll, then they're still going to have to depend on us to do the on-site work for them.

Aside from that, they're going to need to do more than marketing to shoe-horn themselves in with our customers. Who do they think their prospects are going to call when they get this mailer - AT&T, or their IT consultant?

By the way, was that $63 per PC, or for a whole network up to a certain number of PCs?

Mar 16, 2009
 said...
I would agree with above,it will come down to relationships. This looks more like a consumer type offering rather than a business - look after servers, firewalls, etc. And finally Dell offers similar and they are struggling.
Mar 16, 2009
Linda Lynch said...
Without a doubt they will need feet on the street, and I no longer help big companies gain feet. But aside from that, I have local competitors who are cutting their prices left and right. It is discouraging that they are helping to make the services we provide a commodity.
Mar 16, 2009
 said...
This isn't managed services for SMB's. There's no mention of a proactive monitoring platform such as Zenith or Kaseya. The virtual help desk is likely a text chat; what does an SMB do if they need help and their network or Internet connection is down? Will AT&T's fee include advanced work such as vpn's, firewall, network configuration, etc. You get the picture. AT&T's offerings are little different from Verizon's offering to consumers of a McAfee security suite!
Mar 16, 2009
dmg2 said...
The biggest question I see is: How much is covered by their virtual help desk? If the help desk isn't able to resolve the issue quickly via the phone or remote access, what happens next?

Generally speaking, I estimate my cost to provide the same thing to be approximately $160 per year: Level 1 Help Desk and an "all-in-one" internet security suite like AVG.

I could either charge that as a setup fee and charge $21.97 per month or, if my pockets are deep enough, just charge ~$35 per month. Either way I turn a profit of around ~$260 per PC annually and... the best part... I don't have to touch ANYTHING! Of course, in this scenario you make your money off of volume, but get this: If my (US-based) help desk is unable to resolve the issue it is escalated to Level 2, which is either the customer's internal IT staff (if they have one) or yours truly. I treat it as a break/fix call and charge a discounted hourly rate. I have already been in the process of getting ready to roll this out to end-users and business users who aren't quite ready to commit to a full service "all-you-can-eat" plan.

The biggest advantage AT&T has over me is the ability to reach more people. I'm not even sure the brand helps them much as they have a reputation for terrible customer service.

Mar 16, 2009
randyhall said...
It is a growing threat, and so was Dell's entry into Managed Services with their purchase of Silverback. The biggest threat is from prospects and clients questioning our PRICING when compared against AT&T. I do not believe they can provide a comparable service for that price, not even close. BUT, that type of press helps to drive down our pricing by commoditizing our services. The answer, build your brand, have a USP that is real and substantiated, testomonials, and MARKET MARKET MARKET.
Mar 16, 2009
lukemorehead said...
In our local market AT&T has a horrible reputation. If you just speak the name AT&T people groan. Not a threat to us at all.
Mar 16, 2009
Robert Morris said...
We have recently ran into several potential customers that have various hosted services from Ma Bell, most of them are/were not thrilled with the level of service that they rcv mainly due to the lack of personal attention and customer service. Personally I think as the larger companies offshore these types of services that feeling will continue to grow. So as of today Im personally not real overly threatened by them.. Granted that may be a little naive I dont know. Time will tell. They are the 800lb gorilla and have tried they're hand in lots of different service markets i.e. Security/ISS. The good news for us all is if they dont get a high rate of return and larged measured success they wont be in it for the long haul.

Ms Robin I am also one of the local MSP's in your area that you mentioned..And Im sorry but you are flying incredibly low under the radar in the local tech communities here in Mid TN, so Im not real suprised that you havent been called or marketed to. I know your not on any of the many lists that we work. If your interested I would be glad to be a reference for you!..lol..Thanks for the heads up!

Mar 17, 2009
isdpcman said...
What I like about this is that AT&T will attract the attention of home owners and non-server based businesses and that will increase the interest and validity of our services. I'm not hunting for home PC business but I do like the fact that I can build off of their advertising.

Anytime a company this large starts rattling the cage people take notice of the offering. I remember the same concerns when AT&T got into the VoIP market (What, you didn't know AT&T had a VoIP program named CallVantage to rival [and potentially KILL] Vonage?) They still have it and it didn't kill Vonage. Sales with Vonage went UP.

I view this like I do when GM has a BIG sale on cars. Regardless of whether you buy GM or not car sales will increase because they excite the market with their advertising.

The pressure will be on us [as independent companies] to provide the level of service they cannot get from a huge company like AT&T and I believe most of us are up to that task. But this is an indication that big companies are seeing the value in what we are offering today. We can now start to battle the AT&T's and DELL's by using their size and bureaucracy AGAINST them. Smaller, leaner, agile and more personal, I believe we can provide a level and quality of service they will not get from a conglomerate that MUST play the price market to compete. This means low wage employees which means lower quality service and I doubt they're sending techs to the site for $64/mo.

You get what you pay for in this business. It will all come down to proper marketing and positioning.

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