Is Microsoft the Managed Services Market’s Biggest Enemy?

Over the years Microsoft’s commitment to channel partners has been pretty
much unassailable, regardless of what you may think of the company’s products
or its inclination to throw its weight around.

But as the managed services market matures, you have to wonder how long the
world’s largest software company plans to sit on the sidelines. And while
you’re at it, you might chew on this: When Microsoft finally gets serious about
managed services, will it do so as a partner to the channel, as a competitor or
both?

Based on the vendor’s track record, you would give Microsoft the benefit of
the doubt and speculate that whatever managed services efforts the vendor
throws its weight behind, they will be in partnership with the channel.

Of course, Microsoft’s track record won’t stop some MSPs (managed services
providers) from fretting. Channel Insider found in a
survey conducted last summer that MSPs view Microsoft as their biggest
competitive threat, with 37 percent of respondents naming the vendor as a
threat.
Not even Dell inspires as much fear, with 21 percent of
MSPs naming it as a threat.

But MSPs aren’t the only companies that should wonder if they ought to be
nervous about any potential moves by Microsoft into the managed services space.

Perhaps more justified in sweating it are the companies that since the turn
of the millennium have carved out respectable positions in the market with
their remote monitoring and management platforms.

I am talking about vendors such as Kaseya, Nimsoft, N-able Technologies,
Level Platforms, Zenith InfoTech and TriActive—all of which do all or some of
their business through channel partners. 

Each of them will tell you they feel confident in their technology and
market positions to be able to fend off any incursion by Microsoft into the
managed services space. No doubt, it would take some doing by even the giant of
Redmond to displace some of these
well-entrenched players. Those of us who have been around long enough remember
what happened to Netscape, once the king of Web browsers, when Microsoft
decided to embed Internet Explorer into the Windows operating system. Today, IE
is by far the dominant browser; Netscape is a museum piece.

As the maker of the operating system that runs an estimated 85 percent of
the world’s desktops, Microsoft has the ability to make life hard for other
software companies if it chooses to do so.

So that’s one concern for managed services platform vendors. Another has to
do with partner loyalty.

MSPs have a history of switching from platform to platform before finally
settling on one they like. As I reported in June, MSPs have switched their
loyalties over the years from one vendor to another as a result of unmet
expectations and unforeseen complications in standardizing on a platform
.

A Channel Insider survey conducted over the summer found that 25 percent of
MSPs have switched platforms three times, 21 percent once and 18 percent twice.
Seven percent of participants reported that they have switched platforms a
staggering 10 times. Yes, there are enough platforms out there to switch that
many times.

Reasons cited for the round robin included tools not performing as expected
and being too difficult to use, lack of interoperability, and poor vendor
support and maintenance.

It’s important to note that managed services vendors have come a long way in
supporting partners through training, technical assistance and the sharing of
best practices. And they will have to remain focused on partner support if they
are to stand their ground should Microsoft barrel into the managed services
space.

A move by the software behemoth is expected in short order. Word is that
Microsoft since the fall has been working on an MSP initiative. It’s possible
that the company eventually will tweak its System Center Management, now
targeting corporate IT departments, into a service for channel partners.
Presumably, we will soon find out.

Meanwhile, MSPs and platform vendors should do all they can to build loyalty
in their constituencies (just in case).

Pedro Pereira is a contributing editor for
Channel Insider.

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