Managed services platform vendor N-able Technologies is positioning itself for market domination within two years, CEO Gavin Garbutt told an assembly of existing and potential channel partners.
Garbutt told about 280 people during the N-able Partner Summit in Santa Ana, Calif., that the Ottawa, Canada-based vendor needs them to achieve this. With that in mind, the company has set out to provide exceptional value to partners and customers by helping them reduce costs and increase productivity and profitability, he said.
In doing so, Garbutt said, "We're going to help keep our partners staying ahead of the commoditization curve."
The N-able chief believes that as an increasing number of vendors, distributors and providers, as well as large retailers and telephone companies, rushes to jump on the managed services bandwagon, the risk of commoditization intensifies.
Through managed services, providers remotely take over some or all of their clients' IT functions. They establish ongoing Internet connections to keep tabs on the performance of clients' computing environments and charge them monthly or quarterly fees for the services.
Calling the rush a "stampede," Garbutt said telephone companies and large retailers are preparing low-cost remote monitoring offerings that will make it difficult for independent managed services providers to compete.
The way to stay afloat, he said, is for channel companies to evolve. Companies offering managed services have to take a comprehensive approach that includes not only monitoring, which will become a commodity, but also such elements as hardware as a service, he said.
Tiffani Bova, research director of IT channel sales programs and alliances worldwide for Gartner, called the industry's move to managed services an evolution from classic models such as outsourcing and break/fix reseller services.
"Two things have driven this: One, technology has caught up with the concept. And two, because tech has caught up, the price is allowing smaller businesses to take advantage of services that were used predominantly by enterprise customers," he said.
According to Garbutt, about 20 percent of end-user companies in the small and midsize business market plan to use managed services within the next 12 months.
When he asked for a show of hands during the assembly from providers who have received inquiries from end users about managed services, about 25 to 30 percent of the people in the room raised their hands.
This was a significant change from last May, said Garbutt, who added that when he asked the same question then at a partner event, no hands went up.
Click here to view exclusive channel research from Amazon Consulting.
"I was shocked, actually, to see that many hands going up," he said later, in reference to the response this time.
According to analysts, anecdotal evidence from solution providers and MSP Alliance research, end-user demand is increasing. While only a year ago or so providers still had to do a lot of evangelism, the mood has changed because the message is filtering down to end users, they say.
But that doesn't mean the need for evangelism is over. Michael Drake, CEO of MasterIT, an MSP in Bartlett, Tenn., said pitching the model to potential customers is still very much needed.
Channel News and Analysis 
