Tech Data and Managed Services: Taking It Easy

By Pedro Pereira  |  Posted 2007-07-25 Email Print this article Print
 
 
 
 
 
 
 

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The distributor wants to be extra cautious to not take steps that may be perceived as attempts to compete with solution providers.

While other distributors in the past year have claimed a stake in the managed services market, Tech Data continues to weigh what the distributor's precise role in this new model should be.

The Clearwater, Fla., company is the world's second largest IT distributor, behind Ingram Micro Inc., of Santa Ana, Calif. The two rivals often have carved similar paths as the channel and technology have evolved, though Tech Data traditionally has taken a more methodical—thereby slower—approach to market changes.

Such is the case with managed services, even though Dell's decision to buy SilverBack Technologies, a managed services platform vendor, might have been expected to put extra pressure on the distributor to define its role.

But it's not as if Tech Data has ignored the emerging managed services model, through which solution providers remotely monitor and manage their customers' IT environments. The distributor has relationships with SilverBack competitor N-able Technologies, in Ottawa, and Tampa, Fla.-based Connectwise, whose automation tool works hand-in-hand with the managed services platforms to help solution providers run their businesses.

"The challenge with managed services is to figure out a way to really add value for our customers and make money at the same time," said Tech Data CEO Bob Dutkowsky.

Asked if Dell's SilverBack acquisition adds pressure to the company's managed services strategy, Dutkowsky pointed out that acquisitions involving its vendors or competitors—and even its customers—happen constantly, forcing the distributor to evaluate almost daily how these changes might affect its business.

"Every day we have to think that way. Every day somebody does something that changes the fundamentals of the industry," he said.

That may require the distributor to either make a quick strategic decision or sit back and take a more measured approach, as it is doing with managed services, Dutkowsky said.

The reason for the methodical approach, said Bob O'Malley, Tech Data's senior vice president of U.S. marketing, is to ensure the distributor doesn't end up competing with the MSPs (managed services providers) that it supplies with technology and services. Tech Data, he said, wants to play a fundamental role in how the market shapes up, but that won't happen by competing with its customers.

"We want to be one of the architects of the way this rolls," he said.

Tech Data's role will likely emerge in the form of aggregator, said Murray Wright, the distributor's vice president of U.S. sales. By that he means that Tech Data would build a portfolio of services such as remote print management, configuration services and storage, which it would filter to its MSPs.

Managed services require a collaborative approach with the distributor's, vendor's and solution provider's role clearly defined, he said.

To that end, Tech Data has invited vendors, MSPs and other companies with a stake in the market to a summit in late August, during which O'Malley will push for standardization. The lack of standards in the components that make up a managed services solution remain one of the primary obstacles to adoption of the model by VARs and integrators, he said.

There has to be a "layer of commonality" in how MSPs offer services to customers, he said. By that, O'Malley means that the model should consist of about 80 percent set processes that work with all customers, while the remaining 20 percent would consist of customer-specific services and processes that allow the providers to add extra value.

Tech Data wants to be in a position to enable this approach partly by providing certain services that VARs now perform. For instance, the distributor would configure a router and ship it to the VAR or customer, a process that would allow the VAR to focus more on process and customer satisfaction.

But Tech Data, O'Malley said, will not follow distributors such as Ingram Micro and Access Distribution, which is now part of Arrow, in providing NOC (network operations center) services.

NOCs are used for remote monitoring and management of end-user networks, as well as application hosting. They belong in vendor or MSP sites, not at distributors', said O'Malley.

"We have no plans to offer these services in competition with the VARs," he said. "We won't be putting in a NOC."

Other distributors offer NOC services because building the centers requires significant upfront investments. If MSPs can tap the services without having to make the investment, it becomes easier for VARs and integrators to adopt the managed services model.

But critics of this approach say it will accelerate commoditization of remote monitoring and management instead of allowing VARs and integrators to make a true transformation to the model and makes them continue to operate as resellers.

How that all plays out remains to be seen. But one thing is certain, according to Arnie Bellini, CEO of Connectwise, VARs and integrators have to learn how to run their own businesses properly to be successful in managed services. Connectwise's technology automates a lot of the processes in a solution provider's business, including alerts, reporting and incident tracking.

Bellini estimates that about 25 percent of overall channel companies have successfully adopted the managed services model, while 60 percent are still finding their way.

Pat Olson, senior manager of marketing at Tech Data, said of the distributor's 460 Tech Select members, 40 percent said in a recent poll they were "fully transitioned" to the managed services model. Tech Select is an elite network of solution providers aligned with the distributor.

 
 
 
 
 
 
 
 
 
























 
 
 
 
 
 

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