Friday, January 27, 2012

SOP Friday: Software Upgrade Policy

I wrote awhile back about Activating and Registering Client Software and Hardware. And I wrote a few weeks ago about your Hardware Replacement and Upgrade Policy. This is a very different Software topic.

You need a policy (or at least a philosophy) about software upgrades, even if you don't sell software. Because it is central to the success of our clients, we need to give them good guidance. Here I'm going to address three topics regarding software upgrades: Philosophy, What you sell, and patching.

Software Upgrade Philosophy

Perhaps the most important message you can send your clients about software is a consistent approach to upgrades. When something's new, the only decision is whether to buy it. But when it gets older you have to decide what to do about "generations" of software. I'll use the Microsoft office suite as my primary example since it is in most client offices.

Clients inherently know that life is easier if everyone has the same version of Office. This is particularly true of older software. Office XP and Office 2010 are not compatible. You can open Office XP docs in 2010, but you have to "save as" the old format in order to open with XP again. Once someone updates the file, it's all over.

Macros are particularly troublesome since Visual Basic also changes with each software generation.

Even things that are supposed to be 100% compatible are not. In our book business, we have seen that complicated documents we save in Word 2010 have problems opening successfully in Word 2007, even though they are supposed to be the same format.

Realistically, many offices cannot afford to upgrade everyone's Office Suite just because one person got the new version. Having more than one version can cause a serious reduction in productivity for some offices. Each has to decide what it's worth. As a result we're okay with skipping a generation. This makes the upgrade process more affordable. And, if the client buys open licenses, they can legally install the current version or the most immediate previous version. So staying in sync is easy and doesn't cost more.

Ideally, we like clients to agree to only skip one generation. Look at your own clients. The handful with "that one" Access 97 database have a hundred times more trouble with Microsoft Office issues than any of your other clients. They don't see the difference because they only see their office, but you see the difference all the time.

When companies commit to only skipping one generation, it means they have to shell out some money up front for new software every five years or so. But in the long run, they definitely save money. So you have to work to convince them to keep up with the upgrade policy. And, whenever a new version of Office is released, you have to remind them of the "best practice" in this area.

Another important policy is to match up the hardware generation with the operating system generation. For example, we will not install Server 2003 on new hardware. Period. It doesn't have the right drivers. It might not recognize some of the new components. It certainly can't take advantage of the newer features (in this example, 64 bit processing).

By the same token, we won't put SBS 2011 on a five year old machine. We don't want to install a 2011 operating system on any machine older than 2011. The hardware won't be beefy enough. It won't have all the components to take advantage of new features (like hardware-level virtualization). And it often can't be upgraded to provide reasonable performance without a huge cost. See my article on Hardware Replacement and Upgrade Policy.

Summary: Pay attention to the software "generation" and develop your philosophy about upgrades. You need to balance client needs with costs. For us that means it's okay to skip a generation, but don't skip two generations. And we like to see the hardware and operating system from the same generation.

What You Sell

We have three primary policies about what we sell regarding software.

First, we sell the latest operating system.

Second, we decide between OEM and Open Licensing depending on the client's needs.

Third, we sell other upgrades when they're really needed.

Many year ago I was asked to give a second opinion to a prospect. They had purchased several new computers, which shipped with the new Windows 98 operating system. Their "consultant" had quoted additional software costs and labor to remove the Windows 98 and install Windows 95. His reasoning: Windows 95 is stable and no one ever trusts the first generation of a Microsoft product.

The client asked me what I recommend. Of course I said that I would never replace a brand new O.S. with something that's three years old and based on old technology. This amounted to a consultant who only knew one O.S. and was afraid to support the new one. That's just an unsustainable business model.

We sell the latest operating system. That means Windows 7. That means SBS 2011. Even in the days of Vista, we sold Vista. Techno-goobers and pundits didn't like it, and it was a P.R. nightmare for Microsoft. But as an operating system, it worked great.

When you don't sell the latest operating system, you deprive your clients of many new features, and you increase their overall support costs.

We don't upgrade just to upgrade, but when we sell a new computer, we always choose the latest operating system. Through the whole fiasco of trying to make Windows XP live forever, we simply sold the latest, greatest, and most secure operating system available. That policy never steered us wrong.

As for OEM vs. Licensing, we have changed our tune. We used to drink lots of Microsoft Kool-Aid and push licensing. And for many clients it made a lot of sense. But for smaller clients, Open Licensing has fewer advantages.

Here's the argument for Open Licensing from Microsoft:

1) You get the latest office suite (or operating system). If you want to use the previous version, you could install that as well.

2) You have a perpetual license so you never have to un-install the software.

3) If you buy two years of software assurance, you can get the next version at no additional charge if it's released during that 2-year period.

4) Legally, you can uninstall the software from one system and install on another. So, if your hard drive or mother board fails, you can legally install this software on another machine. You can't do that with OEM. It dies when the machine dies.

Open License makes great sense for larger organizations. You can deploy it en masse and know that everyone is legal. You can maintain consistency throughout the organization, which saves more money over the long run in large companies. Re-installing as needed is simple and you don't have to worry about whether its legal. Overall, management and maintenance is easier with Open Licensing.

With OEM, the key drawback is that you're buying something that will die. Not might, will die. It lives with the machine. So despite client claims that they can do whatever they want, they can't. Luckily, Microsoft licensing authentication has gotten very good, so you spend less time convincing clients that you can't break the license agreement for them.

The key advantage to OEM is that it's a lot cheaper. A secondary advantage is that you can sell one license at a time. Open has a five-license minimum.

With regard to price: When you sell OEM, you have to tell the client that it's a bit of a gamble. As long as the machine lasts, they can use that license. If the machine lives ten years, they can use that license for ten years. Since you only sell business class machines with a three year warranty, they are guaranteed at least three years of life. But if the machine dies in the fourth year, they have to buy Office again. For most clients this is a complete non-issue. Even if they keep the machine for five years, the chances that they will have a failure that requires the purchase of another copy of Office is pretty slim.

With regard to the five-license minimum: For really small companies that buy 1-4 computers a year, they will have a tough time staying eligible for the Open Licensing unless the office licenses are bought at the same time as the SBS licenses, and they have software assurance so that they can add additional licenses for two years. This becomes a simple math problem. And a pain in the neck when that Software Assurance expires.

The bottom line is that OEM is usually the best choice for very small clients and Open Licensing is better for larger clients. The big exception would be small clients who are Not-for-Profit organizations. They can use Tech Soup to get software at extremely low prices, so they can afford to buy 10 or 15 copies and be legal everywhere.

Patches, Fixes, and Updates

Finally, we get to patches, fixes, and updates. This one is pretty easy: Install 'em! Unless there's a major reason not to, we install all the latest patches, fixes, and updates. This is true for operating systems and software.

Just do it.

Most updates are minor and only affect microscopic pieces of the overall code. These are delivered via Automatic Updates or by manually running Windows Updates. We use Zenith RMM (Continuum) to push the most important updates. They currently deploy security updates, but will be expanding to additional updates as well.

I know some people freak out about every update that comes along. But realistically, 99.999% of the time, nothing bad ever happens. So we don't have a policy based on the exception to the rule. We have a policy based on the rule: Apply the latest updates.

The reason is extremely simple. Call tech support (for Windows, Office, QuickBooks, or any other program). The first question they ask is whether you've applied all the latest updates. If the answer is no, then they say to go apply those and call back.

You do the same with your clients. It's amazing how many issues simply go away (or never appear in the first place) when you have all the patches, fixes, and updates installed.

Just do it.

And what about Service Packs? Well, those do make us a little nervous. But not too bad.

I'm old enough to remember NT 4.0, Service Pack 6a. How much does it suck to have the latest Service Pack be a re-release of the service pack with a minor fix? It's a huge flag that says, "Let others try it first."

Microsoft has flip-flopped about service packs. In the first place, they were intended to be a collection of all the paches, fixes, and updates for the operating system or software. But then they went through a phase of adding serious functionality. Then they removed some functionality due to lawsuits. Then they went back to only providing updates. Then they made a few exceptions to that.

Then, they invented the "roll up" so that the latest version of NT 4.0 is not SP6a, but SP6a plus the latest roll-up. (Shoot Me Now)

So . . . Here's our policy about these major Service Packs, Feature Packs, and Roll-ups: Wait for about a month after they are released. If the world does not come to an end, then schedule installs for all clients. These updates are never critical. After all, they contain mostly old patches, fixes, and updates that you've already applied. They just make it much easier to get all the latest stuff installed quickly and in an orderly manner.

Once in a great while there's a problem. But for the most part, service packs these days are uneventful. So be diligent, but don't be afraid. Give it a little time to see if there are problems, then go ahead and install.

- Implementation Notes -

As with all policies, you first need to spell out what you want to do with regard to software upgrades, and what your philosophy is. Write it down. Explain it to your team.

You also need to add these policies to your constant communication with clients. Put it in your newsletters. Add it to your discussions when you sell software and deliver new PCs.

Make sure everyone on your staff is promoting your vision about how software upgrades should be handled.

There are no specific forms for implementing this SOP. You might write up a brief description of the procedure and put it into your SOP binder.

This kind of policy requires that everyone on the team

1) Be aware of the policy

2) Practice the policy

3) Correct one another's errors

4) Support one another with reminders

Your Comments Welcome.

- - - - -

About this Series

SOP Friday - or Standard Operating System Friday - is a series dedicated to helping small computer consulting firms develop the right processes and procedures to create a successful and profitable consulting business.

Find out more about the series, and view the complete "table of contents" for SOP Friday at

- - - - -

Next week's topic: The First Client Visit


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Wednesday, January 25, 2012

Nominations Open For the SMBTN "SMB 150" Contest

SMB 150 Contest!

Once again, SMBTN and SMB Nation are pleased to announce the SMB 150 influencer contest for 2012. Nominations are open now and one lucky nominee will be awarded a BlackBerry PlayBook if nominated by Friday, January 27th 8am PST. An awards dinner will be held to honor the recipients in sunny Los Angeles.

Be sure to nominate yourself and others for this voted upon and peer-reviewed award.

Don't delay, nominate TODAY!

Click here for SMB 150 Nominations
This year the SMB 150 program has some exciting improvements:

From the SMB Nation Web Site:
    • Voting. In early 2012, a ballot will be presented with all of the nominations. Each candidate will have a photo and a biography/sales pitch/statement seeking your vote!
    • Judges. We have recruited a panel of esteemed industry judges we’ll announce soon to oversee the election. The judges input will be weighted along with the voted. This validation step insure that truly the Top 150 are selected!

    • Awards dinner! Awardees and members of the public will be invited to attend an awards ceremony and dinner in Los Angles in late April 2012. It will truly be a magical evening!

    • Sponsorships! Allowing us to the take the SMB 150 to the next level is the platinum sponsor from BlackBerry! Contact me for additional sponsorship opportunities.
Nominations accepted! Click HERE to nominate yourself or a like-minded accomplished SMB IT leader. You know how you are; you know who they are! Just do it!

So click the link and let the SMB 150 voting begin! It’s election season, folks!

About the SMBTN:

The SMB Technology Network™ is an organization of over 600 consultants, solutions providers, and value-added resellers who provide technology products and services small-to-medium sized enterprises. The organization seeks to improve the quality and strength of the SMB market by providing programs to educate their members, opportunities for them to network, and to create alliances with interested SMB vendors.


Friday, January 20, 2012

SOP Friday: Keeping Your Standards and Procedures Organized

Last week we talked about hardware upgrades. Next week we'll talk about software upgrades. Today we're going to take a bit of a break and talk about the SOP (Standard Operating Procedures) process as a whole. How do you organize all this stuff so you can find it, use it, and make your business more efficient?

Of there isn't one perfect way to do things, so I'll just talk a bit about what we do.

First, consider who creates SOPs? Answer: Everyone.

Everyone has duties. The receptionist, the office manager, the bookkeeper, the service coordinator, the technicians, etc. Everyone who does something has to document what they do. Ideally, each person in a role will inherit documentation and procedures. Also ideally, that person will update those procedures. For example, when a web site changes or you switch to a different payroll system, someone needs to update the instructions for payroll.

Maintaining documentation should be a piece of everyone's job description. Employees won't put a priority on it if you don't.

Note: For all documentation, we tend to have one file for each policy. Yes, you can combine them into a large document, but that's actually harder to manage when it's large and you need to make changes. You might occasionally scoop up all your documentation into a single document, but it is probably easier to manage day-to-day if you keep it in individual files. You can still flag the files with categories and sub-categories in order to make them easier to organize.

Second, consider where you put documentation.

I'm not sure why, but the default answer people want to give is that 1) All documentation should be in the same place, and 2) All documentation should be in some big, electronic thing that's 100% accessible from anywhere on earth. That might work, but we haven't found that approach useful.

Administrative folks use one set of files and folders to do all their work. So we created a "Policies and Procedures" folder within that work area for them. That way, they don't have to go log into some tool they never use. For us, the full path is x:\Operations\Policies and Procedures.

Technicians never go there. Why would they? In fact, they don't have permissions to the Operations folder. Technicians have a different place to store stuff: SharePoint. They have an area filled with monthly maintenance checklists, technology SOPs, favorite white papers, New PC checklists, etc. This information is available no matter where the technician is - inside the office or out.

Note: IF your admins use SharePoint all the time already, then keeping their documentation in SharePoint makes sense. But if they never use it for anything else, you're setting yourself up for failure if you ask them to go do this one thing only occasionally.

Third, consider who manages the overall documentation.

At America's Tech Support, this is Mike. He knows where all the documentation is for admins and for techs. He cleans things up occasionally. If we need to print things out to store in a binder, he does that (but not too often).

The person in charge of documentation is responsible for making sure it's organized and accessible. There's nothing worse than trying to find documentation you KNOW you have, but you don't know where it is.

Documentation naturally divides into two simple categories in the I.T. business: Admin and Tech. But one top of all of that is a third category, Company Policies. Company policies are the "philosophy" topics we've discussed and the SOPs that apply across the board. For example, the philosophy about three-year upgrade cycles (see last week's article) and the SOP on Date Formats apply to everyone.

Everyone, especially technicians, needs to know about the philosophy on three-year upgrade cycles. But they don't need to edit it, print it out, or deal with it in any way. Similarly, everyone needs to know and use the approved date formats, but they don't need to edit it.

I prefer to keep these company-wide policies and procedures in with the Admin policies and procedures. These items need their own sub-folder and should only be edited by management types. You won't edit them very often, so it's important that keep them where you can find them!

Finally, consider how you'll backup up all your SOPs.

Ideally, you're already backing up the core data files, and x:\Operations\Policies and Procedures is part of that. You'll also need to backup SharePoint, or occasionally do a file/folder copy over to the Operations folder.

Electronic Options

Aside from SharePoint, there are plenty of electronic options for saving all your docs. For us, the PSA system has never been convenient. We used to use ConnectWise. Now we use Autotask. Both are great for time tracking and billing. Both are clunky for things like this. It's just not what they do.

In my opinion, this activity is so straight forward that you just don't need a big database filled with Word and Excel docs in order to organize your documentation.

. . . and you might just decide to keep it all in one big file.

Bottom line: whatever works for you is what you should do. But don't just let everyone put their documentation in whatever folder they feel like. Then it will be lost forever. Whatever you decide to do, you should have a very clear policy about where documentation is located and who uses which system. And this should be so thoroughly embedded into your daily operation that you never have to ask someone to help you find documentation: It will always be in the only place you will ever look.

Your Comments Welcome.

- - - - -

About this Series

SOP Friday - or Standard Operating System Friday - is a series dedicated to helping small computer consulting firms develop the right processes and procedures to create a successful and profitable consulting business.

Find out more about the series, and view the complete "table of contents" for SOP Friday at

- - - - -

Next week's topic: Software Upgrade Policy


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Tuesday, January 17, 2012

2012 - The Year For Managed Services

I know many people are still break/fix. To be honest, I don't know how they survived the last 3 years.

For those who adopted a managed service model immediately before or during the current recession, it has been a life saver. If you have even one or two clients who prepay for services on the first day of the month, you know what a boost that is for cash flow. It's nice to know that some piece of you nut is covered no matter what else happens.

Now imagine having 100% of your clients on managed services. All the money flows in on day one. The only variables are product sales (hardware/software) and project labor. The core revenue of you company is set.

Believe me, this model reduces stress AND makes it easier to run your company. Regular maintenance might be boring, but it dramatically reduces other work. Maintenance can be scheduled. Most of it can be done remotely. When you do start work on a client project, try to clean up all the tickets they have in the system. Thus the work just flows.

For MSPs that went into the recession with a 100% MSP model, the experience has been a gradual tightening of the belt. As clients slowed down and laid off employees, the per-desktop pricing model reduced their I.T. expenditure . . . and your revenue. Unlike the break/fix crowd, clients can't cut spending to zero and just wait til things break. So there was a gradual reduction in revenue and clients reducing staffing a little here and a little there.

I firmly believe that we'll see a reversal of that in 2012. It won't be fast, but clients will slowly add a desktop here and an employee there. One. One more. One more. In this scenario - with no change in your service agreement - clients will begin paying you more. As they add employees, the per-desktop pricing model will gradually increase your revenue.

We did sales during the draw-down in order to maintain revenue. We needed a few extra clients in order to counteract the reduced revenue from client reductions in force. Now, we have a stronger base. And as clients add desktops, we expect to see a gradual increase in revenue.

I am frequently asked, "Is it too late to get into Managed Services?" Absolutely not. In fact, as I wrote to someone yesterday, I think the managed service model is THE model of the future. It is becoming the default process for delivering technical support. And there are some very clear parallels with other support entities out there.

My favorite adviser on MSP Sales and Marketing is, of course, Robin Robins. She loves to give examples from other service industries, such as heating and air conditioning. These folks do a great job of marketing seasonal maintenance. They'll tune up your heater and your air conditioner. They'll tell you to change your filters. Then they'll put their sticker on your water heater and air conditioner. And when you need service . . . who ya gonna call?

We see the same model with window cleaners and even carpet cleaners. They ink a deal to provide regular service. Of course they get other work as needed.
And they serve their clients under contract before they serve "strangers." In fact, that's a big mantra of the managed services crowd. Think about what happens the first time there's a big heat wave and all the marginal AC units fail. Clients with maintenance agreements get priority service while strangers wait and sweat.

So, managed services is the emerging default model for service delivery. For us and for other companies that provide service.

There will always be break/fix companies. And they will struggle more and more each year.

It's never too late to adopt a successful business model. Managed Services is that model. And 2012 will be a great year for anyone who's on board.

What does your year look like?


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Sunday, January 15, 2012

In-Person Microsoft Events in the NorCal Area

Got a note from my friend Suzanne Lavine over at Microsoft. Here are some upcoming in-person events in the NorCal area. These and other in-person events are always listed in my free weekly newsletter. Sign up now at SMB Books.

If you know of other in-person events I should list, please email me. Thank you!

- - - - - -

From Suzanne:
In Person Events

Mark your calendar (PS I’ll be attending, presenting, or hosting each of these events)

February 2nd 8:30 – 11:30 Microsoft and Synnex Licensing Bootcamp (details below)
Register: … PS recommend staying for IAMCP lunch……

February 2nd 12:15 – 1:30 IAMCP Lunch with Neal Potter – State of the Union on Microsoft partner program, new products, how to compete, Cloud, and more.
Register: search for Northern California chapter (invitation should be posted next week Monday)

February 20th 12:30 – 1:30 PM Lunch provided for those who register. NorCal 2nd Open Door Day. Come to the Microsoft SF office to network with your Microsoft team and other service providers, MSP’s, ISV’s, and other important people.
Register: Email [email protected]

February 21st VAR Summit at Microsoft Mountain View office 9:00 – 4:00
Register: Mark your calendar, details coming

. . .

Details for Feb 2nd:
Join Microsoft and SYNNEX for a focused discussion on Licensing Microsoft Solutions for partners selling into Small & Medium Businesses.

Are you leaving money on the table? Do you struggle with the complexity of Microsoft licensing?
Want to augment your ISV or Services practice?

This power-packed three-hour boot camp is great for client-facing sales managers, account executives, and technical resources who are new in their role or who need a refresher on Microsoft's licensing programs. And, if you're already a Microsoft licensing expert, attend this Bootcamp and test your knowledge! We will review trends, tools, scenarios and tips to help you and your customers.

In just three hours, you'll learn how to:
• Grow your business with the right licensing programs for your customers
• Discover techniques to position Annuity with Microsoft Software Assurance
• Enhance your profit margin with best practices
• Understand Microsoft Cloud licensing options for your customers
• Leverage incentives, rebates, financing and promotions to save money
• Connect with local resources and knowledgeable experts
• Increase your revenue, decrease your cost of sale and provide superior service to your clients
• Review Key Licensing Scenarios: Virtualization, Business Intelligence, Cloud
This event is designed to give you the knowledge you need to advise your customers, save money and build a Microsoft roadmap.

San Francisco – Thursday, February 2nd from 8:30am – 11:30am PT

These Microsoft Bootcamps are co-sponsored with SYNNEX Corporation. For more information, contact [email protected] or call 800-456-4822 x4810.

. . .

Suzanne Lavine
Northern California/Nevada – Partner Territory Manager, Microsoft Corporation
Commercial Small/Mid Market & Partner Focus

W: 415.972.6434 | M: 510.703.4220 | [email protected]
My Blog:

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Friday, January 13, 2012

SOP Friday: Hardware Replacement and Upgrade Policy

When do you replace hardware? Well, that's more complicated than it appears at first. There's the "ideal" policy, the reality of dealing with clients. And then we have the reality of dealing with clients in the worst recession in sixty years.

General Rule for Success: "We Like To See . . ."

Let me just take a sidebar here and explain a powerful rule of success if you are a computer consultant (or any kind of consultant). You need to have a philosophy about how things are done. In some way, this is a core belief that leads us to create all these other policies.

It boils down to this: The combined total of all the advice you give will move your clients in the right direction. It will give them better performance from their computers, more efficiency from their employees, and save them money in the long run.

We are this month celebrating clients with 5th anniversary, 7th anniversary, 8th anniversary, and 10th anniversary, as our clients. When I look back on all the advice that's been given and taken, I can honestly say that we saved them money "in the long run" because of our advice.

Newbies to our company don't understand how we can have so few service requests. We have weeks where basically nothing happens. That's because we are very firm in pushing our philosophy about hardware, software, licensing, maintenance, and spending money wisely (which might mean spending more in the short term).

The key phrase to memorize here is We like to see . . . because it gives clients confidence that you have a big-picture philosophy about how things are done. We like to see hardware replaced every three years. We like to see Exchange on a hosted platform. We like to see point-in-time backups. We like to see a documentation folder for each machine.

When you go into a client with strong philosophies about how things are done, they feel more comfortable relying on you to give them good advice!

- - - -

Anyway . . .

There are two major policies here. First, there's a policy regarding upgrades. That is, upgrading existing hardware. Second, there's the philosophy regarding replacement of hardware.

Upgrading Existing Hardware

This used to be more of an issue in the "old days" when 1) Technology kept improving at a fast pace, 2) Things broke, and 3) Components were installed separately.

Today, most of the core components are built into the motherboard. LAN card, Video, sound, printer, RS-232, USB: It's all onboard. So if something goes wrong you normally just call the manufacturer because it's covered by the warranty. (See next topic.)

But, aside from that, things don't break. Well, rarely. I don't remember the last time an onboard LAN went bad, or a sound card or video. I think I recall one bad LAN port in the last ten years. And all I really recall is that someone had taped over it with a label that said to use the add-on LAN card. So maybe it wasn't bad at all.

We used to get faster and faster modems. But now 56K is the top. You either get one or you don't. LAN ports have been 100 MB or 1 GB for so long that no one every upgrades. Sound is onboard. Very few people want an upgrade in the business environment, unless they're doing something special. Every machine has five or more USB ports.

The point is: We almost never have to address upgrading existing hardware. But when we do, here's our policy:

It is this company’s core belief that a business class machine’s useful life is 3 years.

Upgrading Hardware
We do not upgrade hardware in machines that are more than 3 years old. If we're looking for a manufacturer part, we end up spending a lot of time trying to find the right thing and get it ordered. We almost always lost money once we consider the labor involved in getting such parts.

In addition, we are much more likely to experience additional problems once we start replacing stuff. For example, we've had a motherboard go bad after upgrading memory. Yes, we've done it a million times. But suddenly something goes bad and it's an issue that has to be addressed.

The only two possible exceptions are:
1) A retrofit (not upgrade) of a business critical machine in an attempt to keep it alive long enough for its replacement to come on line.
2) We have explained our policy to a client and they are willing to pay for both our time to find the correct parts and all time for all installation and troubleshooting of issues arising from that installation.

So far, we haven't had too many clients that are so endeared to a machine that they select option 2.

Replacement Hardware

Note, please, that this discussion involves all hardware except printers. That means that we're talking about servers, desktops, laptops, routers, firewalls, switches, . . . everything.

Printers are an exception because we tend to sell business class HP printers, and they never die. One time we had a client who built their annual conference registration system around HP Laserjet 4 printers (a wise choice). I had bought a used HP4 from a client. So it was 5+ years old when I bought it. When I decided to move to a faster printer, I sold it to this client for their conference registration system. Five years later, they retired that system and there was my old printer in the pile, in perfect working order. Finally donated to charity along with the rest.

As for everything else . . . Our general rule is that a business class machine’s useful life is 3 years. There are several reasons for this.

First, we sell business class machines. So they're built to last that long. They're built with better parts and better processes. They're inspected more carefully. And they really should last three years trouble-free. This is true of HP. It's true of Lenovo. It's even true of Dell. IF you buy business class machines.

You can take a "home" grade PC (or low-grade server) and boost the memory, boost the cache, boost the hard drive, etc. You can spend just as much as a business class machine, but you'll have an upgrade home machine. It won't be designed to last three years. You need to start with good equipment and figure out how to reach your price point. Never start with cheap equipment and spend your way up, because it will never become business class.

Second, we sell only servers and workstations that come with a 3-year warranty. For everything else (firewalls, switches, etc.) we require at least a one-year warranty and we really push the three years. We always quote equipment with three years worth of warranty, whether it's standard or an upgrade.

Our managed service agreements require that all covered equipment has to be under warranty. If not, all labor is billable. There are two very simple reasons for this:

1) Equipment designed to have a three year warranty almost never has any issues within the first three years. In fact, it also never has issues within the first five years! It's "business class" and just works.

2) In the fourth or fifth year, under extended warranty, we can still just call the manufacturer and say, "Come fix your stuff."

Third, technology marches on! Whether a client wants to admit it or not, you have to upgrade sometime. Old machines get slow. They get bogged down with lots of programs. They get asked to do more than they were intended to do. Hard drives begin to slow down because of re-reads and re-writes. Older machines have fan issues, even if they're not obvious, so they're hotter and slower.

AND all the equipment in your office has to work together. When you replace a desktop here and a desktop there, pretty soon the server is the slowest machine in the office. It's working overtime just to keep up with all those fast desktops.

Network equipment also gets old. Ports go bad. But more importantly, older chipsets are slower than newer chipsets. New kinds of protocols come into existence and the routers and switches don't know what to do with them. VOIP is a GREAT example of this. Very often, manufacturers will put a 100 MB port on a firewall that can't possible pump out data faster then 30 or 40 MB. Yeah, you get a link light. But you don't get the data flow you're paying for.

That approach worked great when you were moving from a 1.5MB T-1 to a 6 MB DSL line. But with a 70 MB cable connection or 1GB Fiber, you are totally wasting your bandwidth potential and slowing down everything in the office.

Older, slower equipment is just going to get older and slower. Period.

A philosophy of regular three-year upgrades will always keep your client working efficiently with quality equipment.

There's a very weird mentality with equipment. Sometimes we find ourselves saying, "It still works." Well, yeah. So what. The first Compaq Proliant I ever installed with Windows NT 3.5 is still working today. Pentium, baby! With a blazing 96 MB of RAM. 16 GB SCSI drives. It takes ten minutes just to POST. But it works!

The fact that you can turn on a stereo amplifier built in 1974 and it works is NOT impressive. It's solid state. It should just work. But does it give you the performance you want?

A switch (or even a hub) that's five, ten, or fifteen years old will "work." It will turn on. The lights will blink. Data will flow. But that doesn't mean it's a good idea to use that equipment in the backbone of a client's network.

A five year old server will turn on. It will load the O.S. Lights will blink. Data will flow. But that doesn't mean it's a good idea to use that equipment in the backbone of a client's network.

The Sales Pitch

Many clients accept the three year rule. This is due, in large part, to the fact that we harp on it all the time. We remind them of the age of their machines. Sometimes we even label machines with the year they were new. We quote replacements for three year old equipment. We encourage the clients to officially adopt a three year replacement policy. And when machine are absolutely brand new, we remind them that it will be old in three years.

I would say that "most" clients accept this policy. Most of them allow us to replace servers in three years. So, while they might extend the warranty for a year, they begin getting quotes to replace it at the same time. Most clients try to adopt similar policies with desktops, but they tend to be closer to the four year mark.

And a four year old desktop is not horrible these days.

But, as you know, the new desktop machine that replaced it is blazingly faster! I love projects that require a decision make to sit down at three or more of their employee machines and work on a project. They see how painfully slow they are making their employees work. It really helps them see that we're not just pushing hardware to make money.

It's funny how little attention is given to desktop machines, given that they are the most important productivity tool for 90% of all employees in our clients' offices.

So we're not just pushing hardware sales. We really are working to make them more efficient and profitable. This policy is not meant to serve US. It is meant to serve the client. After all, when we're working on an old, slow piece of crap, we're getting paid by the hour. With that policy in place, we'd make a lot more money working on old equipment!

I know you know how it is.

We are so "into" technology that we can't stand being on old, slow machines. But some people somehow convince themselves that they're saving money.

You need to believe this philosophy deep in your heart: Old machines cost money! You need to speak this philosophy when talking to employees and clients. You need to work it into your web site, your newsletters, and all of your client conversations.

"We like to see these machines replaced every three years."

Your Comments Welcome.

- - - - -

About this Series

SOP Friday - or Standard Operating System Friday - is a series dedicated to helping small computer consulting firms develop the right processes and procedures to create a successful and profitable consulting business.

Find out more about the series, and view the complete "table of contents" for SOP Friday at

- - - - -

Next week's topic: Keeping Your Standards and Procedures Organized


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Thursday, January 12, 2012

I Didn't Like Myst and I Don't Like Google+

Last night my daughter asked me, "So what comes after Facebook?"

All I could think of was, "Well, it's not Google+"

I'm not a "gamer." I have enjoyed video games over the years, but I've never really been addicted to any. I've never built a monster computer in order to play a video game.

The game I've tried that I liked the *least* was Myst. I received it as a Christmas gift one year. It has no instructions and no apparent point. You're on an island. You can walk around. You can poke things and look at stuff.

When I first got the game, I installed it and spent about half an hour being totally frustrated. No instructions. No point. No goal. Just walk around the island. I couldn't figure out how to do anything. And there was my cute daughter to play with, so I shut it down.

On probably a dozen other occasions, I loaded the game, wandered aimlessly around the island, realized I couldn't figure it out, and then shut it down. Then I uninstalled it and never considered trying again.

Someone finds Myst entertaining. It's a very popular game. And there are sequel games. But I found it confusing and not entertaining.

My impression of Google+ is about the same. I go there because hundreds of people have added me. Then I spend half an hour putting people into circles. But I don't know the point of that and then realize that I'm putting people into circles they're already it.

So I look to see what else there is to do. Then I close it down and do something else.

I see that Google+ is different from Facebook, but I don't see a compelling reason to use it instead of Facebook. It reminds me a bit of the Microsoft small business financials product. Everyone who got it installed it, looked around, realized it was like QuickBooks with fewer features, then uninstalled it.

It might be a great product, but there's no compelling reason to switch.

Strangely enough, I believe Facebook's popularity is about to reach its zenith. I don't know what will replace it, but it won't be Google+ (in my opinion). Just as Facebook came out of nowhere to replace Friendster, Yahoo Groups, and MySpace, something else is hiding in the wings waiting to take down Facebook.

(Note, please that Friendster, Yahoo Groups, and MySpace still exist. But their market share has been destroyed by the popularity of Facebook.)

Sometimes we convince ourselves that something is so big that it can never go away. Like the Magellan search engine. Or Overture, Alta Vista, Lycos, Infoseek, Excite, and a dozen others. Oh, and Yahoo. Dominance is a fleeting thing on the Internet.

Probably the biggest thing Facebook has going for it is that the universe is not expanding as fast as it used to. Despite the addition of billions of people in China and India, new Internet connectivity won't guarantee an expanding user base as it did ten or five years ago. That means that market share will come by stealing actual users and not merely by acquiring new users.

It's a new game and Facebook is perfectly situated to play the old game.

I'm sorry for Google+. I mostly like what they do as a company. I give them more money than I give to Facebook. But right now Facebook is winning the social media game. If you're only going to participate in 3-5 social media sites, one will be Facebook.


Wednesday, January 11, 2012

Bend Over, California Employers, Your State Government is at Work Again

Employees might not know what all the alphabet soup stuff stands for on their paychecks, but their employers should.

One of the taxes employers pay is Unemployment Tax. This is basically a STATE program. So why do we pay Federal Unemployment Tax (FUTA)? Well, that's to pay for the administration of the unemployment system. But there's an extra amount of tax thrown into FUTA to provide a government-based "insurance" program to make sure the states can't go broke.

It's kind of like the Federal Deposit Insurance program.

So California gave out more unemployment payments than they had money to pay for. Since we have the most screwed-up state legislature in the world, and a series of horrible governors that goes back three generations, this state simply pays for things with no plan to pay them back.

Well, the feds have a plan. They loan the money to the state unemployment department. And when the money is not paid back, employers get an extra bill from the Feds.

So, if you are lucky enough to be an employer in the State of California, you will need to make an additional lump-sum FUTA payment this month for every employee. See the State EDD site for details:

Assuming the State of California continues to be completely irresponsible next year and the year after, you can expect an additional .3% increase in FUTA rates until the State has a system to pay their bills.

- - - - -

PLEASE remember, on election day to Vote Against All Incumbents. I know you think your Assemblyman, your Senator, and your local elected officials are the exception to the rule. But they're not. The people who got us in this mess are NOT going to get us out.
 am NOT opposed to taxes. I'm not one of those people who thinks every tax is too high and the government shouldn't do anything. Far from it. I enjoy clean drinking water and safe roads as much as the next guy. But I *AM* opposed to completely irresponsible elected officials.

At the end of the day, we don't send people into government so they can help us screw our fellow citizens by taking more than we give. We only ask elected officials to do one simple thing: Balance the services we can afford with the taxes we pay. If you don't have the money, either cut the services or increase the taxes. Those are hard decisions. But instead, we have hundreds of elected officials who can't make ANY decisions except to put off the hard decisions until after the next election.

Vote them all out. ALL OF THEM.

No one could do a worse job than the people who have been running this state for the last 30 years.

. . . just a little Wednesday afternoon steam.


Podcast Posted: "Own the Clouds" with Joyce Blonskij

Over at Cloud Services Roundtable, we've posted an interview with Joyce Blonskij, author of Own the Clouds: The First Guide To Investing In Cloud Computing Companies.

This is part one of a two-part interview. I caught up with Joyce in her investment advisory office. Her book - Own the Clouds - The First Guide To Investing In Cloud Computing Companies - will be released at the end of January.

Joyce's book is a great introduction to stock market investing generally, but her focus is specifically on Cloud and Internet companies.

This is a great topic for I.T. consultants, especially those who have managed to save a little something extra and want to know where to invest for retirement. Too often we self-employed folks don't put away enough of a nest egg.

The book will be only $24.95, and that prices includes a number of give-aways you can find out about at see Joyce will be donating all proceeds from this book to charities, including Kiwanis House.

Cloud Service Roundtable Members can download this recording right now and get the year started off right with an introduction to investing. It's particularly cool to have such a great guide with a hook into our area of expertise. Check it out today.

Download the podcast here.


Sunday, January 08, 2012

The Most Popular Blog Posts of the Last Month

It might be a nerd thing, but I love just looking at the "stats" from my blog. It is just plain strange what makes the top ten sometimes. In the last month I've posed 18 blog posts at Given the length of my posts, that's about half of a book. So it's interesting to see what people read the most. Ideally, I want the most popular posts to be the most recent. But it doesn't always work out that way.

Here are the most read blog posts from the last 31 days:

#1 = My 950th Blog Post from Dec 8, 2011
This tiny, pointless post just barely makes the 31 day limit. I'm not sure why people gravitate to milestone postings, but they do.

#2 = SOP Friday: Activating and Registering Client Software from Dec 16, 2011
This is part of the SOP Friday series, which has a lot of followers and several regular readers.

#3 = SOP Friday: Hiring Your First Employee from Dec 23, 2011
This is part of the SOP Friday series and part of a little mini-series of posts on employee hiring.

#4 = The Cost of an Employee from Dec 19, 2011
This is part of that little mini-series of blog posts about hiring your first employee. Not part of the SOP Friday series.

#5 = SOP Friday: Cash Flow Weekly Procedure from Dec 30, 2011
A very recent SOP Friday post.

#6 = SOP Friday: Defining Your Company to Clients and Employees from Dec 2, 2011
This is the first "top ten" that wasn't from the immediate past 31 days. It is a very popular post and might just stay in the top ten another 30 days.

#7 = Not Training IS Training from Dec 21, 2011
Just a regular post here. This one got a lot of feedback and also looks like it will be popular going forward.

#8 = SOP Friday: Running Regular Financial Reports from Dec 9, 2011
Another in the SOP Friday series.

#9 = Zenith vs. Kaseya from Dec 7, 2007
Here's one OLD post that is just amazingly popular. I have even added a not to it that warns that this is an old but popular post. This perennial favorite enjoyed it's 4th birthday last month. I think it's popularity comes from the fact that it is a popular article with the exact wording of a very popular search term. In fact, this is the single most popular posting in the history of

#10 = Sales Boost: Toner for The New Year from Dec 27, 2011
And, finally, a year-end post that got a lot of visitors.

Overall, most of my traffic comes from some pretty standard sources. Some posts have been linked from various web sites for years. So the overall popularity of some articles is related to a large number of hard-coded in-coming traffic. Thank you for that!

It's also the case that I "own" a number of search terms. For example, if you Google "Zenith vs. Kaseya" you'll find the ever-popular blog post above is very highly ranked. After six years of blogging about the same topics, content is king, so the hard-coded links keep increasing.

As a new year begins, I am honored to have a blog that continues to attract readers. In 2011, the number of visitors grew about 560%. I doubt we'll do that again, but I'll try!

Thank you all for your support!


Pssst. Hey. Did you know you can subscribe to my blog on the Kindle?

Friday, January 06, 2012

SOP Friday: Employee Handbook

This isn't really a procedure as such. It's really a policy with a handbook attached. The policy is really simple:

You need an employee handbook.

That's it.

The first question is, "When do I need an employee handbook?" The answer is that you should have one as soon as you have an employee. But don't freak out!

My basic philosophy is that you should make your employee as small as possible, not as comprehensive as possible. This advice applies to small businesses, of course. Once you have lots of employees and lots of extra regulations, then the advice reverses. But to start out, Keep It Simple!

You need an employee handbook basically because you need a place to put YOUR policies and clarifications. With every lesson you learn, you will create a policy and expand the handbook a little. With luck, it will never be too fat. Fat employee handbooks are not read.

Your employee handbook contains three kinds of information:

- Required information

- Really smart things to do

- Optional information

Despite everything I'm about to say, your employee handbook might be as small as five pages. You only NEED a few things.

Beware State Laws

Here's the deal with employee rules and regs: Almost everything you can think of (and a whole bunch you can't imagine) has been regulated by the government already. This includes how many hours an employee can work, who you can't discriminate against, when lunch has to be taken, wages to be paid, taxes, worker's compensation insurance, privacy, vacations, etc.

The good news for you is that you don't have to cover any of that crap. You have to somehow stay inside the law. But your employee handbook only needs to address the topics and issues that you believe need special attention.

You can find dozens of employee handbooks on the Internet. They cover all kinds of things that you consider to be common sense. Believe me, there is no common sense when it comes to human interaction. In my opinion, there's no point creating a document so big and cumbersome that no one reads it until an issue arises. What do you want employees to know? That's what counts.

Required Information

The first set of things you should include in your employee handbook are the most important things to keep your business running smoothly and cover your butt when an issue arises. These include:

- Your company vision and mission. Many people consider this "fluff," but it's really the most important thing. If you have a vision that actually guides your business, the rest of the book is almost irrelevant.

- Non-Disclosure Agreements. You should state that NDAs are required of all employees. Your NDA will be a separate document that you can keep in the employee folder, but you will state in the employee handbook that an NDA is a requirement of employment. This in turn allows you to tell clients that you require NDAs from all employees.

Believe it or not, that's it. 99% of everything else you come up with is covered by state and federal laws. So other than creating a document that educates people about the law, you don't need all that stuff.

Really Smart Things to Include

The second set of things to include in your employee handbook are "good ideas" like . . .

- Dress Code. Particularly in our line of work, technicians seem to think that torn jeans and an old t-shirt are acceptable. In our business, they are not. When we charge someone $150-300 per hour, we think they need to see a tech who looks professional.

- Work hours and philosophy. It is good to set the ground rules for when employees may work and when they are expected to work. For example, if you want to enforce a rule that you work 8 AM to 5 PM, you should state that. It eliminates many irritating discussions down the road.

- Pay Periods and Pay Dates. You should lay out when people get paid (e.g., 1st and 15th or 10th and 25th or whatever). Separately, you can publish the specific pay dates for the year.

- Holidays. You should list the holidays when your office will be closed. Again, you can separately distribute a list of specific holiday dates for this calendar year.

- Smoking policies. You should lay down when and where smoking is allowed, including what your rules are regarding smoking while at client offices.

- Company property. There are two parts to this. One is a statement that email, computers, files, and all electronic communications provided by the company are the property of the company. Therefore, you can read all emails, review all hard drives, etc. with no prior approval or knowledge of the employee. The second part has to do with tools and equipment. Very often in our profession, employees have hardware, software, cables, and other things that belong to the company. You need a statement that makes clear that these must be returned or paid for at the end of employment.

- Drug Free Workplace Policies and related policies. If you have clients who require a drug-free workplace policy of you, you should include a note to that effect in the employee handbook. As with NDAs, you will execute the drug-free agreement as a separate document if needed. You may be able to get by with just making a statement in the employee handbook.

Optional Information

Everything else is optional. There are an unlimited number of topics you don't need to worry about.

The basic rule here is that you will add sections as the need arises. If you have an argument with an employee about conflict of interest, then add a section on conflict of interest. Otherwise, don't worry about it.

And when you write up these policies, keep it brief! One or two paragraphs for each policy is all you need. Don't create a massive document that covers more than it needs to.

Optional things you might include are: Welcome message, at-will employment message, attendance policy, benefitsconflict of interest policy, disciplinary procedures, employment classifications, equal employment opportunity memo, harassment policy, how personnel records are handled, performance evaluation policy, personal phone call policy, and workplace violence policy.

See all the stuff we didn't put in the document? Keep it simple!

Sample Employee Handbook

Google "Employee Handbook Sample" and you'll find about a million hits. Some cost money. Some are free. Some are specific to your state or province. If you belong to ASCII or CompTIA, they also have resources and samples you can use.

As with any legal document, be very careful about simply downloading something and implementing it in your business. First, you might "implement" something that's actually illegal in your area. Second, you will probably end up with a document that neither you nor your employees will read. That is pointless.

In California, the state Chamber of Commerce has a toolkit for building an employee handbook based on a series of questionnaires you fill out. We bought this and used it. The final document is nice, but the process is very cumbersome. And the final "document" isn't a document at all: You have to generate it each time in order to print another copy since it does a series of database queries to generate you document. I think it's much better to have a Word document you can easily edit.

I'm kind of picky about these things, but I think you should have your employee handbook reviewed by an attorney that specializes in employment law. Yes, it will cost $250-500. But how many lawsuits will be avoided? Find someone who is willing to review your document and not write a whole new handbook for you. Shop around.


Implementing your employee handbook is easy. First you create it. Second, you have it reviewed by an attorney. Third, you present it to your employees.

You should have employees sign a document that they have received and read the employee handbook. We frequently distribute the handbook on day one and have them sign the document on day two.

That's it.

You need an employee handbook because you need to start building YOUR policies and procedures, and the employee handbook is a great place to start. Hit the basics. Add to it as needed.

Your Comments Welcome.

- - - - -

About this Series

SOP Friday - or Standard Operating System Friday - is a series dedicated to helping small computer consulting firms develop the right processes and procedures to create a successful and profitable consulting business.

Find out more about the series, and view the complete "table of contents" for SOP Friday at

- - - - -

Next week's topic: Hardware Replacement Policy


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