As solution providers across the channel spectrum become increasingly comfortable with the managed services model, many of them are discovering that once they begin to offer those services, just about everybody is out to get them.
This isn't the usual amount of paranoia that tends to grip the leaders of any solution provider but rather a cold, hard reality that stems from the fact that there are so many players trying to enter this segment, including:
- Direct marketer companies such as CDW have acquired companies to provide managed services.
- Retailers such as Staples have acquired solution providers while companies such as Best Buy have partnered with distributors such as Ingram Micro to deliver services through select Ingram reseller partners. It's only a matter of time before those offerings include managed services.
- Telecommunication companies have long delivered managed services to enterprise customers and now have designs on the SMB (small and midsize business) market. And wherever telco providers go, eventually so do cable companies.
- Web giants such as Google and Yahoo are delivering software as a service and it would not take much for either one to offer some level of managed services by either rolling its own offering or moving to acquire a company such as LogMeIn. And let's not forget that Microsoft has already taken note of what Citrix is offering in terms of managed PC support services, so it's probably only a matter of time before Google and Microsoft extend their war into managed services.
- Web hosting companies are in search of higher-margin services and have in some cases begun to cast their eyes at managed services. In fact, IBM Global Services is already in this space, which means others are sure to follow.
- Through their professional services organizations many vendors already offer managed services for the products they build. This may in part help explain why so many vendors seem to be slow to build channel programs specifically for MSPs (managed services providers) because they see the companies that provide those services as more of a competitive threat than a classic product reseller.
With all this competitive pressure it's a wonder that any solution provider would contemplate jumping into this space. But it's just all that interest that makes managed services such a compelling proposition for solution providers. The companies that make up the channel have the one thing that everybody else entering this space covets: customer relationships. That means that as solution providers embrace managed services they not only increase the valuation of their companies, but also are setting themselves up for a potential big payday because all the players entering this space are ultimately going to have to buy what they can't build themselves.
Solution providers selling managed services can't afford to ignore all the different ecosystems that are evolving around them so it's critical that they learn how to protect themselves when partnering with any number of the entities entering the managed services space. And of course, the fiercest potential competitor that another solution provider is going to face is another solution provider.
The good news is that the continuing shortage of IT skills in the marketplace means that there will be plenty of work to go around. The bad news is that no MSP can go it alone to be all things to all customers so solution providers in this space are going to need a much more structured approach to partnering.
In fact, what they really need to do is develop their own channel programs to not only make it easier for other people to resell their services, but also create some rules of engagement for their vendor partners. If that sounds like the reverse of the way things work in the channel today, it is. An MSP is really more of customer to the vendor than a reseller ever was. And given that, it means that the locus of power now resides more with the MSP than the vendor. As such, it's time that MSPs began to exercise more clout and ultimately control over their vendor—also known as supplier—partners they will ultimately need to set the terms and conditions that govern that relationship.
Michael Vizard is editorial director of Ziff Davis Enterprise's Enterprise Technology group. He can be reached at michael.vizard@ziffdavisenterprise.com.
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