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For more than 10 years, a slow but steady migration toward managed services has been taking place across the channel. There have been many challenges facing solution providers making that migration, including the fact that most customers are still not managing IT as a service. Without that fundamental shift in philosophy about the management of IT, it’s difficult to convince a customer to invest in managed services.

As a result, the traditional break/fix approach to delivering IT services still dominates the channel. However, in recent years, the sophistication of IT organizations has increased significantly, and the rise of mobile and cloud computing is forcing those organizations to look for outside IT management assistance.

Enough critical mass has now been reached in terms of demand for managed services that within months of each other, three of the major platform managed services providers (MSPs) were scooped up by bigger vendors or investment firms planning to make additional investments in this space. Multiple forces are at work to drive those acquisitions, but the result should be a larger MSP market, with competition that’s fiercer than ever.

Perhaps the most well-known of those three acquired providers of managed services platforms is N-able Technologies, which SolarWinds bought. As a longtime provider of IT management tools, SolarWinds is trying to counter the popularity of rival offerings that use the cloud to deliver IT management services.

Acquiring N-Able not only jump-starts SolarWinds’ fledgling efforts in the cloud; it also gives the company immediate access to a channel for delivering those services.

That same set of issues also helped drive the acquisition of LPI Level Platforms by AVG Technologies, which had previously jumped into the managed services platform space as part of a strategy to expand the adoption of its security software.

Finally, Kaseya was taken over by the venture capital firm Insight Venture Partners, which immediately appointed Yogesh Gupta to be the new CEO of the company. Kaseya, which sells IT management services direct and through the channel, then acquired Zyrion and Rover Apps to expand its portfolio of cloud and mobile computing services, respectively.

“We think the midmarket is going to be the next huge opportunity for delivering managed services,” says Gupta. “The big four vendors in the IT management space are all focused on the top 5,000 customers. But it’s only a matter of time before they want to get into the midmarket. We want to make sure we have a strong presence in that market.”

What’s driving all this merger-and-acquisition activity is that the complexity of IT is outstripping the support capabilities of the average IT organization. Vendors across the spectrum see a much bigger opportunity to automate the delivery of IT services via the cloud. In many instances, however, they are discovering that large number of MSPs already have entrenched relationships with customers.

“When it comes to managed services and the cloud, it’s now all one and the same,” says Ashar Baig, principal analyst for the channel consulting firm Analyst Connection. “What’s changed is that the overall market is now perceived to be mature and stable enough to go after.”

As a result, vendors, ranging from IBM and Hewlett-Packard to telecommunications carriers, are increasing the size and scope of their managed services portfolios.

“As IT becomes a service for a lot of vendors, this simply becomes a build-versus-buy question,” says Beth Vanni, principal for the channel consulting firm Vanni Group International.

How all this will play out in the channel remains to be seen. But what’s certain is that the number of managed services offerings in the market is exploding. With that increased level of competition, there is going to be more pressure on margins, which may ultimately limit the number of channel partners that can afford to play in a game where the ante is being raised every day.

Michael Vizard has been covering IT issues in the enterprise for 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.