White Paper

Managed Services: Business Efficiency andGrowth through InfrastructureManagement SolutionsMichael Marks and Venu VenugopalSolutions Marketing Group – Communications, Media and EntertainmentApril 2006

Table of ContentsIntroduction ........................................................................................................................................................................................................ 3Business Challenges Facing the MSPs .......................................................................................................................................................... 3

Revenue Challenges .................................................................................................................................................................................. 3Cost Challenges ........................................................................................................................................................................................ 4

Leveraging CA Solutions for Growth and Efficiency .................................................................................................................................. 4Improving Services and Aligning with Customer Needs .................................................................................................................. 4Reducing Costs .......................................................................................................................................................................................... 4Managing Risks .......................................................................................................................................................................................... 4

Specific Benefits to Key Organizations ..........................................................................................................................................................5Operations and Engineering......................................................................................................................................................................5Internal IT, Data Center and Customer Service....................................................................................................................................7Product Management and Product Marketing ....................................................................................................................................8

Summary ............................................................................................................................................................................................................ 10Proof Points ..........................................................................................................................................................................................................11About the Authors ............................................................................................................................................................................................12

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IntroductionToday’s Managed Service Providers (MSPs) face tremendouspressure to improve services, reduce costs, and managerisks in order to deliver revenue and profitability in anincreasingly competitive marketplace. The MSPs haveexpanded the breadth of their service offerings fromnetworks to other adjacent elements in the infrastructure— including systems, applications, security and voice.They are also trying to address the market requirement forimproving services and enhancing customer experience.As the enterprises are increasingly dependant on business-critical applications that are geographically distributedand interdependent, the demand is for comprehensive,end-to-end managed services with service level guarantees— across all the infrastructure elements. The scale, perfor-mance, and efficiency needed to succeed in this marketcan be achieved only through infrastructure managementsolutions that are comprehensive and proven. Long-termstrategic partnership with the vendors of those solutionsis also critical. CA is uniquely positioned to deliver againstthese needs through its proven leadership in infrastructuremanagement solutions and strategic focus on serviceproviders as a segment.

Business Challenges Facingthe MSPsThe Managed Services market has followed the same trendsas enterprise Information Technology (IT) in general, interms of increase in complexity, convergence of technol-

ogies and criticality to the business. This has provided anumber of new revenue opportunities for the MSPs. At thesame time, it also has resulted in overwhelming businesschallenges, as enterprises increasingly expect clear, provablebusiness benefits from outsourcing their infrastructureand IT management.

Revenue ChallengesThe traditional areas of managed services such as networkdesign, implementation and monitoring are getting moreand more commoditized. Intense competition is puttingsignificant price pressures, thereby impacting the revenue.To succeed, MSPs need to augment their existing serviceswith new ones that are of higher value to their customersand offers better stickiness and cross/up-sell opportunities.This requires moving ‘across-the-stack’ within a set ofservices or ‘up-the-stack’ by offering more businessfocused services than traditional device centric services(see Figure 1).

A modular, grow-as-you-go approach is most effective forMSPs to augment their traditional services. Not only doeseach customer have unique requirements, but individualcompanies range in their desire to outsource functions toa third party. While some companies fully outsource allnon-core IT management functions, others prefer to retainthe majority of management functions. The MSPs with aflexible and modular service model will be able to respondto these demands quickly and effectively, and will have aclear competitive edge. In addition, an MSP’s ability toincrease revenue depends directly on their ability to prove

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Managed Hubs

Managed Desktops

Managed LAN

Managed Hosting

Managed Email

Managed Firewall

Managed VPN

Managed Business Continuity

Enterprise Risk Management

Secure Messaging

Managed Mobility Services

Performance Management

Software Delivery

Service Desk

Backup & Restore

On-demand Content

Asset Management

Managed Triple Play

Managed Routers

Managed Business Process Life-Cycle Management

Integrated Services Management

IT Capacity Planning

Compliance focused Business Practices

Resources Management

Managed Business Process Optimization

Systems Standardizations

Business Value

Device Centric Services Business Centric Services

Figure 1. Managed services continuum.

the business value of their services, and constantlyemphasize that value through a customer centric serviceassurance approach.

Cost ChallengesThe breadth and complexity of services directly affectstheir cost structure. Enterprises are outsourcing more andmore business critical services and hence round-the-clockproactive monitoring and follow-the-sun managementhave become the norm — adding to the overall cost. Also,as providers step out of their traditional domains ofexpertise, costs in ramping up staff, training, deploymentof multiple management platforms and integration, etc.can become a significant cost factor too. In this regard, thenumber of disparate vendors/technologies in the providermanagement solution needs to be minimized and existinginvestments should be leveraged whenever possible.

Both the complexity and variation in customer environmentsbeing managed, and the range of management functionsoffered can increase the expense of customized solutions.Hence it is important that providers offer scalable andrepeatable services, and avoid one-off offerings. Also,from that perspective, it is necessary to attain a criticalmass of customers as quickly as possible to ramp-uprevenue as well as to drive down per unit costs to competitivelevels. The penalties for Service Level Agreement (SLA)violations also add to potential expense of servicedegradations. These needs can be effectively addressedthrough management platforms that allow high level ofintegration and automation, and provide comprehensive,end-to-end management capabilities across all theinfrastructure elements.

Another factor that affects cost efficiency is security risks.Risk Management is, in effect, management of serviceavailability and performance, whether it is provided as aservice (up-the-stack revenue opportunity) or as a built-incomponent of managed infrastructure services (improvedservice assurance, thereby reducing cost). Further,customers increasingly expect that the services theyreceive meet certain minimum security standards andproviders’ multi-tenant environments do not compromiseintegrity of their data.

Leveraging CA Solutions for Growthand EfficiencyTo respond to these market pressures effectively, CA’sEnterprise IT Management (EITM™) strategy provides aflexible path and a range of solutions that focus on managedservices by unifying and simplifying the management ofenterprise-wide IT from three important angles; improvingservices and aligning with customer needs, managing

costs, and managing risk. EITM allows MSPs to assisttheir customers in the evolution of enterprise-wide ITmanagement from a reactive event-driven approach toone that is proactive and business-focused.

Improving Services and Aligning withCustomer NeedsCA allows service providers to implement an agile manage-ment integration platform to respond to rapid businesschanges and marketplace opportunities. Alignmentbetween customers, services, and infrastructure allowsoperations staff to ensure meeting of customer servicelevel commitments and prioritization of responses basedon business needs. CA’s focus on modularity helps MSPsin rapidly responding to market demand for new services,supported by a grow-as-you-go infrastructure managementframework. This means that improving existing servicesand launching new ones can be done with incrementalsoftware purchases and minimal training time. Comprehen-siveness of CA solutions allows consistent managementof disparate technologies and complex infrastructureelements. CA’s emphasis on openness of solutionsarchitecture and integration with a large number ofthird-party solutions arm MSPs to leverage existingplatforms and enables easy automation of servicescomponents such as workflow, fault management, servicelevel monitoring, reporting etc. — there by improvingcustomer experience and service efficiency.

Reducing CostsProfitability of managed services to a large extent dependson implementation of a scalable framework and repeatableprocesses. To achieve this, automation of many steps in theservices value chain becomes a necessity. This includesorder management, provisioning, billing, service assuranceand reporting, all driven through a comprehensive workflow.CA solutions are market leaders in a number of key areasin this value chain and also integrate well with other pointsolutions, to provide a management framework that allowshigh level of automation and process consistency. Alsothe comprehensiveness of CA solutions allow integratedmanagement of disparate infrastructure elements anddiverse technologies — whether they are part of the network,systems, applications, database or business processlayers. Cost benefits of such an inclusive and integratedapproach are significant, as services can be enhanced orlaunched with minimal incremental infrastructureinvestments, personnel resources, or training.

Managing RisksRisk management is increasingly being looked at as anecessity for managed services’ continuity and customerexperience excellence. It is no more a security manage-

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ment issue alone. Vulnerabilities in a customer environmentthat is being managed, if not patched, may allow unauthor-ized access to business critical systems. Also, if notmanaged well, a virus or worm could be propagated fromone customer’s environment to a broader set of customersand assets being managed by the MSP. Such a threat canresult in service interruptions and increase in call volumeto the service center - affecting not only the SLAs but alsothe reputation and brand equity of the provider. CA’ssolutions on threat and risk management ensure thatthese risks are managed well and minimized.

Specific Benefits to KeyOrganizationsEach of the stakeholder organizations in an MSP hasunique business needs. CA’s infrastructure managementframework and solution sets comprehensively addressthese needs. Specific benefits of CA solutions to each ofthese organizations are:

Operations and Engineering Challenge that today’s MSPs face on Operations andEngineering side is in providing a provisioning and serviceassurance solution that is scalable, efficient, flexible and,most importantly, customer centric. CA solutions help theproviders to address these challenges effectively.

• Customer Centric Operations:

– Portal solutions that allow role based access forcustomers — to status reports on orders, provisioning,migrations, assets, service assurance, tickets,performance trending, and SLAs (Figure 2).

– Portal solutions that allow role based access forsupport and management teams to monitor andmanage orders, provisioning, migrations, assets,service assurance, trouble tickets and SLAs.

– Workflow solutions that monitor and manage theservices value chain end-to-end. That is, ordermanagement, provisioning, billing, service assuranceand reporting — including escalations management.

– Predictive capacity planning to identify bottlenecks inthe customer environment and to make data-drivenrecommendations for additional infrastructuredeployments.

For example:

CA CleverPath™ Portal solutions allow the VP of

Managed Services Operations to access real-

time snap-shot view of operational performance

across all the managed services, and drill down

into the details if needed. Built-in authentication

and access control modules from eTrust® ensure

that aggregated performance information and

SLA related financial impacts can be viewed only

by the management staff.

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Figure 2. Portal solutions provide exceptional customer experience and operational efficiency.

• Efficiency of Operations Infrastructure:

– Automated, built-in intelligence enabling proactiveservice assurance across a broad range of infra-structure elements and technologies. This allows theoperations staff to manage large number of customerenvironments without adding unnecessary resources(Figure 3).

– Vendor and technology neutral SLA monitoring andmanagement and efficient response to incidents.Out-of-the box integration support of hundreds ofthird-party vendors and technologies, providingexceptional efficiency across the entire managedservices value chain.

– Workflow management solutions that improveefficiency across the operations setup — withmeasurable improvements in metrics such as MeanTime to Repair (MTTR), Mean Time to Fix (MTTF),and Mean Time between Failures (MTBF).

– Automated asset discovery, asset intelligence andinventory allowing real-time monitoring, managementand reporting on assets across the customerenvironments.

• Scalability of Operations Infrastructure:

– Modular service assurance solutions that allow grow-as-you-go management infrastructure. As number ofmanaged elements and customers grow, scale to theneed by adding incremental licenses and supporthardware/software.

– Modular and comprehensive service assurancesolutions that allow easy addition of service specificmodules as portfolio grows across-the-stack and/orup-the-stack — no new point-solutions or additionalvendors needed, driving down per unit costs.

– Technology and vendor independent coverage acrossthe entire enterprise infrastructure that is beingmanaged — networks (including data, voice, andwireless), systems, databases, applications and security.

For example:

CA Spectrum® fault management solution set

provides the Director of Managed Network

Services Operations with proactive fault

management capabilities across thousands of

managed elements covering scores of vendors

and technologies. Its easiness to integrate with

existing point solutions such as trouble ticket

management enables 100% automation in

creation and routing of services trouble tickets.

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Figure 3. Comprehensive, integrated and modular management solutions — enable managed services across the enterprise infrastructure stack.

– Portal solutions that allow centralized command andcontrol, easier workgroup collaboration, and reporting(Figure 4).

– Business process management and optimizationsolutions that allow management of IT infrastructurealigned with services goals and business objectives.

For example:

CA eTrust® Treat Management and Security

Information Management solutions allow

the Director of IT to implement and manage

perimeter security on the support network/

assets, thereby ensuring high availability of

customer services portal.

• Efficiency through automation of back-end processes:

– Workflow management solutions that improveefficiency across the internal infrastructuremanagement and customer services setup.

– Asset discovery, management and intelligencesolutions that provide real-time view of assetinventory and capacity utilization — helping to makewell informed decisions on resource allocation andaugmentation.

– Storage management solutions that allow centralized,automated backup and recovery of mission criticaldata and ensure business continuity in the event of anemergency or disaster.

– Single sign on and password management solutionsto streamline user provisioning and user adminis-tration across hundreds of assets, applications anddatabases.

– Configuration management, change control andsoftware delivery solutions that provide fullyautomated patch updating, version control andsoftware distribution across the infrastructure.

– Comprehensive and modular management solutionsthat cover the entire breadth of technologies andvendors — hand-held devices, distributed systemsthrough mainframes; wireline networks throughwireless networks; networks, systems, databasesthrough applications.

For example:

CA Aion® Business Process Management and

Unicenter® Job Management solutions enable

the Service Delivery Manager to quickly pinpoint

causes for delay in service implementations and

take corrective actions — all through a centralized

service delivery dashboard.

CA eHealth® performance management solutions

allow the Operations Manager to track, manage

and report performance metrics against Service

Level Agreements (SLA) on a single service or

portfolio of services, and also identify and

address operational improvements necessary to

enhance the SLAs.

• Flexibility of Operations Infrastructure:

– Comprehensive solution set that allows disparateset of managed services — across-the-stack and up-the-stack — allowing maximum flexibility in serviceofferings. Cost-effective introduction of new servicesand support systems.

Internal IT, Data Center and Customer ServiceThe internal IT, business processes and OSS/BSS play acrucial role in overall success of managed services. Theinternal infrastructure of an MSP is very similar to that ofthe enterprise customers the MSP manages. Hence thebusiness value that an MSP is asked to provide (by itscustomers) is strikingly similar to what their internalinfrastructure provides. Specific benefits that CA solutionsbring to these organizations are:

• Business focused Management of IT Infrastructure:

– Solutions that provide integrated fault and perfor-mance management of mission-critical systems,applications, and databases. Platform neutral, vendorindependent support, and built-in intelligence reducecosts through platform consolidation, automation ofincidents and systems management functions, andjob scheduling.

– Security management solutions that monitor andmanage internal and external threats/risks, and userauthentication/access across networks, systems,databases and applications that are critical for theservices that the MSP provide.

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Product Management and Product Marketing Services that were once flagship offerings and comfortzones of the providers are fast becoming commodities. Asmanaged services evolve from device/technology centricto business centric, traditional boundaries between MSPsand Systems Integrators (SIs) collapse — creating anextremely competitive market place. Primary challengesthat Product Management and Product Marketing groupsface are: limited budget and higher expectation on ROI,short go-to-market timelines on new services andenhancements, average revenue per customer, need forcomprehensive, yet modular, solutions that cuts acrossnetwork, systems, and application boundaries, andimproving efficiency of support setup to drive down unitcosts. In this regard, specific benefits of CA solutions are:

• Limited budget and higher ROI thresholds:

– Business process management tools that providereal-time view of services performance as a portfolio— informed decisions based on collective view ofassets, portfolio, investments and resources.

– ‘Shared risk’ partnership based on application hostingservices that allow success based investing. Flexiblelicensing, including subscription pricing - that enables‘grow-as-you-go’ infrastructure management build-up.

– Comprehensive and modular solution set from asingle vendor — allow cost effective addition of newservices — ‘across-the-stack’ or ‘up-the-stack’,increasing cross-sell/up-sell opportunities andaverage revenue per customer.

For example:

CA Unicenter® Asset Management and Asset

Intelligence solutions enable the Manager of IT

to track internal assets and manage resources

across those assets. Same solutions arm the

Manager of Product Management to track and

recover customer premise equipments (CPE) that

are leased or rented by the customers, there by

reducing cost of revenue.

CA eTrust® Directory, Single Sign On and

Identity Manager solution set allows the CIO

to control costs in user provisioning and user

management across hundreds of assets —

whether they are distributed systems or

mainframes, web services or databases,

Windows desktops or Unix servers.

CA BrightStor® storage management solutions

enable the Director of IT to ensure business

continuity of support systems, databases and

applications through centralized management of

backup, recovery and storage performance

management.

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Figure 4. Sophisticated command and control dashboards allow end-to-end managementof business support systems that Managed Services rely on.

For example:

Single vendor contract and CA FlexSelect™

Licensing allow the VP of Product Management

and the VP of Finance to reduce capital and

operational expenditures — and hence per unit

cost of services.

• Rapid go-to-market timelines on new products andservices:

– Application hosting services that allow quick go-to-market on new services.

– Solutions that maximize existing infrastructureinvestments — out-of-the box integration with legacysystems and hundreds of third-party point solutions.

– Comprehensive solution sets that allow rapid additionto existing services. For example, managed networkservices can be easily evolved into managed securityservices and managed desktop services, as infrastructuremanagement solutions are integrated and modular.

• Services evolution ‘across-the-stack’ and ‘up-the-stack’:

– Modularity of solutions enable quick evolution intobusiness focused services such as business continuity,enterprise risk management, asset management,on-demand content, business process lifecycle manage-ment etc. — increasing stickiness of services andimproving profit margins

– Solutions that align with market and technologytrends — including convergence of networkingtechnologies, integrated multi-function networkelements, integrated management of network,systems, application and security, comprehensive‘through-the-stack’ management.

– Risk management solutions that view security as abusiness enabler — allowing services with security asan embedded functionality or security managementas a service itself.

For example:

CA Spectrum®, eHealth®, eTrust®, BrightStor®,

Wily™ and Unicenter® portfolio of solutions and

their interoperability through CA Integration

Platform enable the Director of Product

Management to evolve Managed Router Services

to Managed Security Services (across-the-stack)

or Managed Business Continuity Services (up-

the-stack), quickly and cost efficiently.

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Figure 5. Market leading resource optimization and business process management solutionsenable informed decisions on services planning and execution.

• Improving efficiency across the managed servicesvalue chain:

– Role-based, service oriented dashboards that allowintegrated view of services status, performance,and reports for customers, internal support groupsand management — from anywhere, at anytime.Multi-source information aggregation, filtering andcorrelation.

– Customer portals that allow role-based self-servicecapabilities and business process intelligence toinitiate workflow tasks. Integrated contractmanagement and centralized support processes.

– Integrated workflow management tools drivingefficiency across the value chain functions — bringingdown unit cost.

– Resource optimization, project management andportfolio management tools that bolster efficiency ofproduct launch planning and execution — conform toindustry best practices through built-in intelligence aswell as integration with third party tools. (Figure 5)

For example:

CA Clarity™ solutions arm the Product Managers

to program manage new services development as

well as lifecycle management of existing services

with real-time view of budgetary information,

schedules, resource constraints, etc. and their

business impacts.

SummaryThe MSP market has evolved and expanded significantlyover the past decade. Although network and IT infra-structures are more business critical than ever, factorssuch as complexity of technologies, increase in internalsupport costs and necessity to focus on core business, areforcing enterprises to outsource more and more of theirinfrastructure management. The market demand is forcomprehensive, end-to-end managed services with servicelevel guarantees — across all the infrastructure elementsin the customer environment. The scale, performance, andefficiency that are necessary to succeed in this market canbe achieved only through infrastructure managementsolutions that are comprehensive, seamless and proven.As discussed in this paper, CA is well positioned to helpand partner with the MSPs to address these market needseffectively. CA offers a comprehensive, integrated andmodular portfolio of market leading solutions that theMSPs can rely on, to maximize their revenue growth andbusiness efficiency.

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Proof Points• One of the largest telecom and mobile service providers

in the world — with services in 120+ countries —wanted a scalable, high performing solution to providehighly automated managed services, leveraginginvestments in existing ordering, provisioning andtrouble ticketing platforms.

CA solutions provide value through:

– A highly scalable and performing infrastructuremanagement solution; currently manages 60,000+end-customer network/security elements.

– Integration with legacy ordering, provisioning andtrouble ticketing systems and end-to-end automationin fault management and problem resolution.

– 95–97% of tickets are generated automatically,lowering per unit costs

– Rapid extension of services (and revenue streams)from Managed Router Services on Frame Relay andATM to Managed LAN, Managed IP VPN andManaged Security services on IP and MPLS.

• Seven of the Top 10 Internet Service Providers in NorthAmerica, including AOL, the largest; total base of 50M+subscribers. Wanted Threat Management solutions toprovide — service differentiation and operational costefficiency

CA solutions provide value through:

– Real-time protection of subscriber environmentsagainst Viruses, Worms, Spyware, Spam, identitytheft, and hacker intrusions.

– Mitigating the risk of spreading threats on providernetworks (and hence legal risks too).

– Increasing revenue and reducing churn.

– Deriving operational cost savings by reducing supportcalls and operational staff required to combat threats.

• One of the largest telecom providers in the world, withdata services in 98+ countries; recognized leader inManaged IP services. Wanted comprehensive perform-ance reporting provided on their fast-growing, flagshipMPLS VPN services.

CA solutions provide value through –

– Best-of-breed platform for performance reporting ontheir managed and unmanaged network services.

– Differentiation of VPN services by offering tieredperformance reporting; increased revenue stream.

– Reporting as a valuable customer retention tool andimproving customer experience.

– Minimization of infrastructure investments byshared-risk partnership. CA’s hosted ASP Services cutgo-to-market timeframe to less than three monthsfrom a typical 18 months.

• One of the largest and fastest growing MSPs in Europewith over 14,000 kilometers of fiber optic networkinfrastructure. Wanted an end-to-end infrastructuremanagement solution that provides competitiveadvantage in offering superlative managed services.

CA solutions provide value through:

– Proactive management of the 100,000+ networkelements.

– Proactive notification of capacity constraints on end-customer networks – thereby improving customerexperience.

– Improved quality and reliability across the suiteof services.

– Performance reporting as a value-added serviceenabling the maximization of bandwidth utilizationand quality of service.

• European MSP, with 800 enterprise customers, 8000managed devices and $12B transactions per day on thenetwork. Wanted zero touch provisioning and real-timereporting, and integration with legacy order manage-ment systems, fault management and customer portals.

CA solutions provide value through:

– Retained Revenue of $120M+ due to lower churn.Direct Revenue through Enhanced Reporting Services:$4.7M.

– Leveraging existing investments through seamlessintegration with scores of legacy systems. Modularityof CA solution set and openness of its architectureplayed a critical role.

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About the AuthorsMichael Marks is a VP of Solutions Marketing at CA withresponsibility for leading the efforts on strategizing andmarket positioning of CA solutions into Telecom, Mediaand Entertainment vertical. Prior to this role he was a VPof Market Development and Strategic Alliances at ConcordCommunications. Before joining Concord, he was a SeniorProduct Manager for 3Com’s service provider networkmanagement products, and also held a variety ofoperations roles at Pacific Bell.

Venu Venugopal is a Director of Solutions Marketing atCA with responsibility for solutions strategy and marketpositioning for Telecom, Media and Entertainment vertical.Prior to the current role he was a Director of ProductManagement for CA’s eTrust® Security InformationManagement product line. Before joining CA, he was aSenior Manager for Product Management & Marketing atSprint, where he led the development and launch ofSprint’s IP Virtual Private Networking and ManagedSecurity Services product portfolio. During his tenure atSprint, he also held positions as the Senior Manager forNetwork Security and the Principal Program Manager forManaged Network Services.

Contributors The following individuals also contributed to this paper:Jim Lochran and Bill Costello.

Copyright © 2006 CA. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. This document is for your informationalpurposes only. To the extent permitted by applicable law, CA provides this document “AS IS” without warranty of any kind, including, without limitation, any implied warranties of merchantability,fitness for a particular purpose, or non-infringement. In no event will CA be liable for any loss or damage, direct or indirect, from the use of this document, including, without limitation, lost profits,business interruption, goodwill or lost data, even if CA is expressly advised of such damages. MP299230406