Outsourcing solutions–Hydra Network

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Hydra Network
Outsourcing
ROI & cost justification
SAN
SLA
I'm a CIO for a company with 150 employees, and I'm considering outsourcing a good portion of our IT support and maintenance to a third party to cut our expenses. I met with a sales rep from Hydra Network last week after they had done a SAN implementation for us through another partner, and am really suspicious about their ability to offer the SLA they claim to be able to offer, at the rates they are charging (they are 20-50% lower than any other national provider solutions we've investigated. I found one cheaper local offer, but we need a provider who can handle our branch offices in 3 states). They seemed to do a great job with the SAN work, but now we are looking for them to handle our general IT help desk and provide remote support to our end users, as well as supplement our onsite staff as needed. We might also turn over the management of 2 or 3 servers. What i want to know is, has anyone or is anyone using any of their services and can tell me if they are as good as they sound? Also, they say they can save us huge money on our tech purchases (they are a Dell Reseller), but they don't have an online store. Does anyone understand how that works? Any feedback is much appreciated (before i go and layoff 3 support techs and sign a year contract)! Thanks, Jay
ASKED: January 18, 2006  3:00 PM
UPDATED: October 17, 2008  3:01 PM

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Hi Jay…

First let me say that I do not know the company you are talking about, but I have some general advice. I have had considerable experience with such matters both as a consultant and in my current occupation. I have had to pick up pieces after such attempts at saving money. Here, for what it is worth, is my two cents.

If they are seriously underpriced as seems to be the case, there is usually a good reason….ie, they don’t deliver. I have run into this one many times. I have and continue to work with and in budget tight Municipal entities and the drive to save money leads to many poor choices. The SLA you speak of could be a real problem. What is your recourse if they don’t deliver? This needs to be spelled out in any contract. There is also the expense of Court proceedings if they don’t deliver and don’t follow the contract. This is expensive and most companies end up cancelling the contract and cutting thier loses. Not a good thing to have to go to the CEO about. I would also be concerned about how long they will be around.

As far as being a DELL reseller, they may well be. You should be able to check with DELL about that. You should also check what level of authorization they have with DELL. The fact that they don’t have an online store probably isn’t a concern as you can do your own homework on DELL’s website before calling them. Keep track of the pricing and the specs on your orders though. DELL sells diferent levels of equipement just like everyone else and those savings may not be worth the trouble.

I hope I have helped a little bit. If you would like to talk further, send me a private message.

Best of luck to you.

Regards,
Paul

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  • Japeters
    Hey, jaypeters! This is japeters! ;) Are you in the New York area as well? We used Hydra Network in Manhattan for about a year, until we were bought out by a larger company that had their own large IT group. I have to say the service was pretty good overall (better than our current internal department...though that's not saying much!) We are smaller, only 20 employees though. We had a network admin that quit and and so we dove right in and outsourced our entire IT department to hydra network. they remotely managed all of our daily administrative tasks, monitored our systems, and responded by phone within 20minutes usually when we had a problem (often immediately) and onsite within 4 hours for emergencies. It made my job a lot easier (i was the "CIO" so to speak), because they practically took over everything that i normally was doing, leaving me nothing to do all day but strategize. i do miss that a lot (i actually have to work for a living now). also, their customer service was excellent. They were sometimes sluggish about scheduling new installs and non-emergency onsite support time though, but we were able to live with it. We still buy all our computer products from them, because they are really cheap. You're right, not having an online store is sort of inconvenient, but if you call them they handle all the configuration details and provide free pre-purchase consulting, something which you have a tough time getting from other sellers. My opinion (for what it's worth) is that you will probably have nothing to worry about if you sign the contract. I'd recommend them to anyone who needs to cut back departmental costs while maintaing support.
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  • Bobkberg
    You're a tough act to follow Paul - but I'll try. First off Jay, he's right, but allow me to flesh out some more details. I'm in a slightly differnt When any item in the SLA is specified, there should be a response time for acknowledgement, response, and resolution. One nasty trick I've seen is where someone unqualified answers the customer's request within the acknowledgement/response window - which the "tech" says "Gee, I don't know, I'll have to get somebody else", and the "escalation clause has a considerably longer SLA. Some suppliers set that up to basically avoid meeting their SLA. I'm sure you can extend that concept into other areas of the SLA, detail-wise. Another trick I've encountered is where for the first few months, you get the outsourcer's top people, usually during a probation or vetting period - then they slowly start moving your support over to lesser qualified and sometimes unqualified people. Another key thing to consider is how well they'll keep up your systems with respect to patches, anti-virus, anti-spyware, anti-spam, etc. If they do the support work up front, you'll have fewer calls from people who see a problem. But it's commonly known in this business that there are a large number of users who have no clue that anything is wrong until it's a crisis, and that's where they can look good for the most part - and a major system failure SLA is something that doesn't often have to be fast service - reputedly because of the escalation chain. One last thing - Consider building in the assumption that their work can be audited independently - without notice, by a third party of your choosing. Then (unless they protest), make that audit assessment carry penalties up to and including contract cancellation. Check with your attorney's for the fine print necessary. Hope that helps, Bob
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  • Slurpy77
    Hi, I don't have any experience with Hydra but I am interested in your question. The answers provided all make sense with regard to being careful about the paperwork. What bob was saying about initally having the "top" guys looking after you at the start & then lesser experienced engineers is essentially the case (we are based in Ireland and probably provide the same service here as Hydra are doing in NY) as we do the same thing - not necessarily consciously though - it just works out that way as generally you need the top guys to go in at the start to document the existing system and make any changes to improve it and in general to lessen the number of support problems. When this is done, then it is OK to send in less experienced engineers to solve the simpler problems. We have replaced a couple of IT departments over here and we are generally considered good value, but we do operate similarly to how Bob described. Invariably, the monies saved are put back into improving the infrastructure thus cutting down on the amount of problems experienced. My two cents! Larry
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  • Solutions1
    If one looks at this matter through the other end of the telescope, one can ask not why one vendor bid low, but instead what factors may have caused the other vendors to bid higher? For example, the pricing differences may be symptomatic that your RFP and associated information exchange processes with bidders did not create an informally-level playing field, leaving some vendors guessing about factors that impact their estimates of their cost to serve your account. In contrast, Hyda is more or less an incumbant supplier to you, so it perhaps has additional insight and incentive that influenced its estimate of cost to serve.
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  • Idesign4u
    I have to agree with your first respondent (DrillO). You are the CIO of a company -- obviously because you have some smarts... Remember the old adage: "If it sounds too good to be true, it probably isn't!"? I'm not familiar with "Hydra...", but if their 'deal' doesn't 'sound' right -- go with your gut instinct. ...Or give them a short term trial, and monitor them very closely!
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  • Richl01
    I agree the SLA bait and switch is the main thing with any outsourcing company. one of the main things to ask is are you supporting alot of mobile users? with 150 employees how many are computer users and how often are they calling the support desk for help. it also sounds like location is a factor. maybe if you spend some money on training the workforce and remote admin tools. and keep the consultants for the remote sites that you do not have any IT expertise, and ocasiaonl staff augmentation.
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  • Jcvaug
    All the previous comments are absolutely on the spot. I'd like to add that you must request that they provide you with at least 5 references. Of course they will provide you their best reference. This is up to you now. Call or visit all references and ask each of them the same questions that you have prepared. Then, make your assessment based on your gut feeling about the company, tempered with the answers to the questions. This is my standard procedure for whatever service/equipment I buy.
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  • EECOMSOL
    Jay, You can take everything you have heard from everyone thus far and apply it in your decision making process and you will be still be doing fine. I have had to evaluate third party and outsourcing vendors in past and here are some of my learning points? I will also hope that your meeting with Sales Rep form Hydra does NOT influence your decision; which it should not. Legal: Remember this is a contract and the SLA as I see it is one of many services offered to you by this vendor so you will need to be clear in what services will be provided, you will need to have a clear measuring criteria (Ex: Running Periodic Metrics) for historical purposes. You will need to define the method of delivery and a periodic evaluation of level of service. Some contracts can have clauses for cost reduction over time (Leave no stone unturned). Bottom line you must have an EXIT clause. Since you are a small company you will need to manage your litigation COST. Remember you are taking on this initiative for cost saving strategy. Performance/Core Competence: As with your own company you have your core competencies, have you determine what Hydra Network does best and how that fits into your requirement? Are they primarily Distributor / re-seller or Network Service / Support Provider? Where is the lion share of their business earnings? Be careful if they are extending the primary business function into a secondary function for the type of service you are requesting. I am not indicating that they cannot provide you with the service you need, what you have to realize is that you are extending your IT organization externally (external resources) and you need to have a complete understanding of what is promised and what they are capable of delivering (I had first experience on this) By the way, let me say to you, if I may, that you will need to very detailed and specific as you would with your internal IT service and functions and when and how they are delivered. Ex: Patches, Upgrades, Disaster Recovery Planning (DRP) Change Control, Help Desk, Escalation Process (Your Access to Key decision makers within Hydra Network and your organization, IT, Legal and Non-Legal) System Availability Communication Protocol between resources (Technical & Non-Technical) etc? You will need to conduct multiple site visits to Hydra Network Facility. You MUST be accompanied during each visit by people at different of levels of your organization; form programmer to analyst, to executives. Everyone must define their expectation prior to site visit and compile a summary after site visit. As for the online store, I cannot ascertain whether this is critical to your business based on your question, but as Paul said, you can do your own research on that. One question you might want to ask is why they decided not to have one. Don?t hesitate to express your expectation in reference to the online store and the impact their decision not have one (On-Line Store), has or will have on your decision if it is that important. Make them answer the tough questions up front. Lastly: Contingency Plan? This is completely an internal fall back plan, should you have to change course. It MUST be comprised of who will be involved, how it will be implemented and what are or is the trigger criteria. Your fall back plan MUST identify a team responsible for implementing your fall back plan and the team must be comprised of people form both Hydra Network and your firm. You will also need to communicate and share the plan with Hydra and they MUST be in agreement with when, how, what and who of the plan along with the transition process. Everything must be shrouded under your LEGAL umbrella. Remember you are doing this to save money; this also includes your company maintaining its ability to EARN? Good Luck Regards, Ade.
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  • Eastonr
    I have no knowledge of this company. I suggest you focus on their enterprise systems management practice. If they are any good, they should have in place a framework that is close to ITIL -- this way you have a basis for administering the SLA.
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  • Jaypeters
    [...] Despite the occasional peril of lost connectivity, it’s a fact of modern business that more and more services are being sent overseas. Once primarily for application development and call centers, outsourcers are enroaching increasingly closer and closer to the heart of businesses. Over on IT Knowledge Exchange, several SMB-types discussed outsourcing their entire IT departments. [...]
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