Nimsoft has launched a Unified Monitoring Alliance that includes Autotask, ConnectWise, FusionStorm, Ingram Micro, Rackspace Hosting and roughly 30 other service providers and independent software vendors. What does all this mean? Here’s my take on Nimsoft’s efforts.

For more than a year, readers have been telling MSPmentor that they need a single dashboard for monitoring on-premise systems and a growing number of cloud applications.

Already, roughly 20 percent of MSPmentor readers are monitoring their customers’ cloud applications, according to a May 2009 MSPmentor reader poll. But many MSPs use a hodgepodge of tools to monitor a range of customer systems.

Eager to solve those challenges, Nimsoft in October 2009 launched a Unified Monitoring platform that apparently allows MSPs and IT managers to monitor IT infrastructure from the data center to the cloud.

Helping Hands

Still, building a single dashboard that can monitor scores of third-party applications requires third-party help. That’s where the Unified Monitoring Alliance enters the picture.

According to a Nimsoft press release, the alliance will include three types of partners:

• Service Provider Partners — Members of this group deliver managed, hosted, cloud-based, and other related services that are monitored using the Nimsoft Monitoring Solution (NMS), according to Nimsoft. Charter members include Alvaka, Atrion, BSG, CDW HMS, Data Electronics, ENKI, FusionStorm, Ingram Micro Inc, Seismic Division, IT Authorities, Longview, MicroMenders, PHNS, NetEnrich, Rackspace Hosting, and Thomas Duryea.
• Solution Partners — These ISVs and SaaS providers extend the Nimsoft solution by providing complementary IT service management solutions and capabilities such as net-flow traffic capture, service desk, and IT infrastructure library configuration management databases, Nimsoft asserts. Charter members include Acentix, Attention Soft, Autotask, BigFix, ConnectWise, geoXMF, Plixer, Sanfir, Service-Now, Sensatronics, Shavlik, Stratavia, VaultLogix, and Wendia.
• Technology Development Partners — These partners are building data collection probes to extend the myriad of types of objects NMS monitors, from non-standard databases to ERP applications to geo-location-based devices, and more, Nimsoft asserts. Utilizing the Nimsoft Unified Monitoring solutions and APIs, these partners create probes that are then resold to Nimsoft customers. Charter members include InTeliNet and Agentil.

The Bigger Picture

The Unified Monitoring Alliance sure sounds promising. But remember: Multiple software companies in the MSP industry want to be the de facto dashboard for monitoring or maintaining all systems.

Two quick examples:

• Level Platforms in May 2009 announced monitoring and management of emerging Microsoft cloud and SaaS applications — including the Microsoft Business Productivity Online Suite (BPOS).
• Rivals ConnectWise and Autotask, among other MSP software providers, each have been promoting APIs (application programming interfaces) that allow RMM, backup and other tools to integrate with the respective PSA platforms.

Still, each dashboard effort varies from the next. In Nimsoft’s case, the company clearly wants to appeal to both corporate IT managers and service providers. Plenty of vendors are lining up to voice support for the Unified Monitoring Alliance. But it will take months to truly measure the alliance’s potential impact.

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Please join MSPmentor for our next webcast on November 18, 2009 at 2:00 p.m. Eastern Standard Time. We’ll focus on real-world case studies from two prominent MSPs — Alpheon Corp. and Sabio Information Services. They’ll describe how they reduce customer power consumption and energy costs even as they boost their own margins.

Here’s an interesting business and technology paradox: AMI Partners, a research firm, says North American SMBs will increase their spending on remote managed services at a compound annual growth rate of 28 percent for the next five years. Sounds awesome. But if things are so good why are some MSP software providers suggesting that portions of the managed services market have somewhat stalled?

Let’s start with the apparent good news: North American SMBs will increase their remote managed IT services spending 3.3 times over the next five years, AMI Partners asserts.

According to Anil Miglani, SVP of IT Infrastructure and Managed Services at AMI: “Of the total installed base of 60 million PCs and 8 million servers in North America, only a tiny fraction is currently managed remotely, offering tremendous growth opportunities for managed service providers.”

That sounds fantastic. And AMI Partners is right: MSPs are only monitoring a small fraction of SMB systems.

Now the problem: Whether you speak to  Ingram Micro Seismic or N-able or a range of other vendors, those sources say many MSPs haven’t figured out how to push beyond their initial SMB customer base.

To accelerate growth many MSP industry players are launching “freemium” initiatives. A few examples:

• The Ingram Micro Seismic team has a free Global NOC introductory offer.
• N-able has introduced a free endpoint security strategy.
• Level Platforms is developing some sort of freemium strategy, CEO Peter Sandiford has hinted.

MSPmentor’s key point: Be careful as research firms continue to hype managed services market growth. The best MSPs continue to grow and do well. But many MSPs are victims of circumstances they can’t control — such as being headquartered in Detroit, where IT spending has stalled with the auto industry.

Will the North American managed services market really triple in size over the next five years? If true, that’s wonderful news for all of us. But I think most MSPs are cautiously optimistic rather than wildly bullish.

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Instead of trading blows with one another, the two leading PSA (professional services automation) are starting to take their cases directly to the people. During ConnectWise Partner Summit in Orlando (Nov. 4-6), I can’t recall a single mention of the competition. And from Nov. 4 to Nov. 6, rival Autotask offered multiple updates on its October business performance and year-end outlook. Here’s a look at the latest chatter.

During his keynote at ConnectWise Partner Summit, CEO Arnie Bellini described how IT Nation (his term for progressive MSPs and VARs) can defend the “last mile” against big vendors pushing into small business. More than 900 MSPs and VARs attended the event, the largest in the MSP industry.

At some previous ConnectWise events, Bellini took aggressive jabs at the competition. But I didn’t hear any of those jabs this time around. Bellini emphasized a need for ConnectWise MSPs to collaborate on long tail opportunities, such as IP video surveillance. He also highlighted numerous ConnectWise user groups popping up across North America, Europe and Australia.

Also of note: ConnectWise Community Director Jeannine Edwards described how the company’s community would continue to grow, including plans for an even larger ConnectWise Partner Summit in 2010.

Overall, ConnectWise appears to remain in growth mode. As Bellini mentioned to me in July 2009:

For 2009, ConnectWise expects to generate roughly $24 million in annual revenue, up from roughly $16 million in 2008. Also, Bellini expects $11 million to flow to ConnectWise’s bottom line in 2009, up from $6 million in 2008.

Equal Time: Autotask

Meanwhile, Autotask tactfully issued three key press statements to remind media, MSPs and partners that Autotask is a growth company in the PSA market. The press releases surfaced one-by-one (Nov. 4, 5 and 6) during the ConnectWise Partner Summit.

In one release, Autotask suggested that its October 2009 business performance may indicate an economic upturn for the IT services community. According to the release…

more than 300 individual IT Service companies placed new orders or upgrades for Autotask. In addition, the company saw more than 1,000 new seats added to its subscriber base – an indicator that IT service firms are hiring again.

In a prepared statement, Autotask CEO Bob Godgart said October 2009 was “a big month for us. Our biggest for the year, and one of the largest spikes in activity from individual companies.” Godgart also mentioned growing momentum for TaskFire IT service desktop solution. Plus, 20 percent of Autotask revenues now come from outside the U.S.

Also of note: Interwork Technologies (Interwork) chose Autotask as the “exclusive professional services automation (PSA) offering” for all of its 4,000 VARS and solution providers. In a similar deal, SMB Technology Network is embracing Autotask.

This is part of a growing trend across the managed services market, where MSP software providers strive to become the de facto standard for associations, organizations and peer groups. For example: HTG Peer Groups has embraced ConnectWise.

Multiple Winners (For Now)

One of my favorite books about the software industry is “Everyone Else Must Fail: The Unvarnished Truth About Oracle and Larry Ellison,” written by the late Karen Southwick.

In the book, Southwick explores how Ellison dismantles his rivals even as he grows Oracle.

No doubt, software companies in all market niches compete fiercely. But does the “Everyone Else Must Fail” example apply to the PSA market? Not yet. ConnectWise and Autotask both are growing, and Tigerpaw Software (another key player) is finally polishing its brand and attending a growing number of MSP-oriented events — such as the recent N-able Partner Summit.

Stirring the Pot?

In recent months, some readers have accused me of “stirring the pot” as Autotask and ConnectWise compete in the PSA market.

Folks, I just report what I hear: If Bellini takes shots at Autotask and suggests he’s ready to buy software partners and rivals, I’ll report it. If Autotask issues a wave of press releases during the ConnectWise Partner Summit, I’ll report it.

But I’ll also add my perspectives. And in the past week, my perspectives have changed a bit.

• Instead of focusing on the competition, Bellini spent ConnectWise Partner Summit focused on his company’s partners and customers. Smart move.
• Instead of yielding the entire week to ConnectWise Partner Summit, rival Autotask provided some timely updates about its own business performance, market growth and customer wins. Smart move.

Both companies are growing. And for now, the PSA industry has multiple winners. Could that change amid a future wave of consolidation? Certainly. And we’ll be sure to offer our two cents, if that wave ever arrives.

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Running a managed services practice is all about generating recurring revenue. Too many small IT providers get so hung up on the service part of Managed Services that they forget about the other ways to make recurring revenue. Here is my top ten list of ways to generate recurring revenue.

They include…

1. Watch Their Networks: Even if you are not a full-fledged MSP, why not offer some basic monitoring services for your clients? Just bill them for being a little proactive. It is an easy way to get them started in Managed Services.

2. Manage Their Internet Usage: Firewalls can be managed and monitored. Wouldn’t your customers want to know who is doing what on the network and when they are doing it?  Many firewalls have remote management tools to fulfill this need. Manage your customers’ firewalls, provide them detailed reports on network usage and make some monthly income while doing so.

3. Clean Their E-mail: Everyone gets spam. Everyone hates spam. There are many ways to filter it. Why not solve your customers’ spam issues with a service that generates recurring revenue? Filter it in the cloud and save your customer the hassle and expense of purchasing a email filtering device and generate recurring revenue while doing so.

4. Protect Their Data: Backups are a no brainer for your clients. You have two choices: 1. Local backups to protect against hardware failure, data deletion, and corruption. 2. Offsite backups to protect from disasters (fire, theft, and water). Both options generate recurring revenue while protecting their data.

5. Virus Defense: Just like spam, every business has to deal with the constant threat from viruses and malware. Your clients need protection and you should be selling it to them as a monthly subscription service.

6. Offer a Variety of Web Services: Most businesses have websites and there are needs associated with maintaining them such as domain name registration, email, and hosting. What about SSL certs for your Exchange servers? These are opportunities to make recurring revenue that most service providers pass up.

7. Get Them Hooked Up: Are you cashing in on phone and internet service? ISP’s, phone providers, and brokers offer recurring commissions for referring business their way.

8. Use SaaS Options Like Hosted Exchange: Smaller clients might not need an in-house Exchange server. Why not offer hosted Exchange as an alternative? This is a great way to generate recurring revenue. There are many other hosted applications you can also resell to your clients and generate recurring revenue with (CRM tools, Google Apps, etc.).

9. File Sharing: File sharing and collaboration is a big conundrum for small businesses. Most end up using clunky FTP services as a solution, and we all know that this is less than ideal. There is another option. Offer an online file sharing and collaboration service as a monthly subscription.

10. Keep it Current: While not a monthly recurring revenue generator, licenses for firewalls, software, services, and warranties come up for renewal. Why let an opportunity to make money slip by? Most vendors pay good commissions for renewals and you should cash in.

There are many other ways to generate recurring revenue. Keep your eyes open for them and add them to your menu.

Paul Barnett is marketing director for VirtualAdministrator, which offers hosted solutions for managed service providers. Read all of Paul’s guest blogs here. Guest blog entries such as this one are contributed on a monthly basis as part of MSPmentor.net’s 2009 Platinum sponsorship.

During the ConnectWise Partner Summit, MSPmentor sat down with a range of managed services experts. In the following MSPmentor FastChat videos, we covered such topics as hardware as a service (HaaS), MSP-to-MSP collaboration, sales and business development, online marketing for MSPs and email security. Here are six FastChat videos with a range of MSP industry experts…

First, please note that these videos are also going viral across YouTube and a range of third-party web sites. Rather than ask hard-hitting news questions, our goal was to stick with the basics: A few quick questions about each executive’s background and how they’re serving the MSP industry, and some tips for viewers. Check our MSPmentor FastChat video section for additional videos.

In the meantime here’s a range of video content from ConnectWise Partner Summit.

1. Hardware as a Service

Back in in March 2009, I spoke with J. Michael Drake, CEO of masterIT (an MSPmentor 100 company) about hardware as a service strategies. Fast forward to the ConnectWise Partner Summit, and I got additional HaaS perspectives from CharTec CEO Alex Rogers. Take a look:

2. Marketing Your Managed Services

Mike Cooch already leads a successful managed services provider (Everon Technology Services, also an MSPmentor 100 company). Now, he’s launched Kutenda — which has built a platform that helps VARs with rapid web site development, online marketing and search engine optimization. Here’s how Cooch intends to help peer MSPs:

3. Managed Services Sales Development

Nick Bock, CEO of Five Nines Technology Group, runs a fast-growing MSP that also participates in HTG Peer Groups. In this video, Bock describes how Five Nines is working with Taylor Business Group and KLA Group on various sales development and lead generation strategies:

4. Master MSPs: Assiting VARs and Aspiring MSPs

Companies like Do IT Smarter (here’s podcast), Ingram Micro Seismic (podcast), MSP Services Network (podcast) and Virtual Administrator (FastChat video and podcast) offer a range of hosted and managed services for VARs and aspiring MSPs. In most cases, those so-called Master MSPs are both educators as well as online services providers to peer channel organizations.

In this latest video, Ingram Micro Seismic’s Jason Beal describes Seismic’s ongoing strategy.

5. MSP-to-MSP Collaboration

A range of online communities — from ConnectWise Network to OnForce — allow MSPs and VARs to outsource work to one another. And companies like Autotask offer TaskFire, helping collaboration between corporate IT and MSPs. More recently, ConnectWise has been pushing beyond online efforts with multiple user groups worldwide. Here, ConnectWise Community Director Jeannine Edwards describes next steps for 2010:

6. Security as a Service

Companies such as Exchange Defender, Reflexion Networks, MX Logic (now owned by McAfee) and Spam Soap spent considerable time at ConnectWise Partner Summit educating MSPs about new ways to safeguard email from spam, viruses and other threats.

I traded email with Exchange Defender’s Vlad Mazek but we didn’t connect at the conference (sorry about that Vlad). We’ve already put the spotlight on MX Logic and Reflexion (here’s a video) a few times. Next up, here’s how Spam Soap — founded by inhouse IT, a successful MSP — is working with VARs and MSPs:

We’ll be back with more video soon, including a sit-down with ConnectWise CEO Arnie Bellini — which focuses on how VARs and MSPs (”IT Nation”) can defend the “last mile” from big vendors and cloud vendors.

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Dave Kresse believes the process that service providers use to test IP services is essentially broken. Kresse, chief executive officer of Mu Dynamics, said his customers feel pressure to get new services deployed rapidly and find it difficult to keep up with testing requirements. Current approaches aren’t scaling to meet demand, he noted. So what’s the solution?

“A lot of people are doing a lot of scripting to get this testing done,” Kresse said. “It takes too long [and] it is too expensive in terms of labor costs.”

Naturally, Mu Dynamics thinks it has a better approach. Kresse said his company’s Mu Test Suite offers an alternative approach to IP service testing, playing a role similar to Mercury Interactive (now part of HP) and IBM Rational in application software testing. Mu performs functional, interoperability, security and resilience testing within a single platform.

Kowsik Guruswamy, Mu’s co-founder and chief technology officer, said the technology tests the logic of the service in its entirety, as opposed to focusing solely on the components that make up a service.

So, where does this fit in the MSP space? Mu Test Suite is geared toward larger organizations such as telcos and cloud services providers, as opposed to smaller MSP shops. Small businesses may opt to partner for services such as hosted VoiP, so the product would mostly apply to master MSPs, telcos that offer MSP services and cloud vendors.

Contributing blogger John Moore covers Master MSPs, Web hosts and emerging opportunities. Follow MSPmentor via RSS; Facebook; Identi.ca; and Twitter. And sign up for our Enewsletter; Webcasts and Resource Center.

Our team is back home after attending the ConnectWise Partner Summit, HTG Peer Group meetings and Symantec Partner Engage this past week. Now I’m packing and leaving tonight for Cisco Partner Velocity in Paris. In between all that, here are seven managed services blog entries we didn’t have time to write for the week ending Nov. 7, 2009.

7. Big Win?: Autotask says 4,000 Interwork VARs are standardizing on the company’s software. I spotted the news on our own MSPtweet, which includes Autotask’s Twitter feed. I’m traveling the next few days but will reach out to CEO Bob Godgart for more details.

6. More Free Stuff: Level Platforms will soon be talking about some sort of “free” strategy. Notes CEO Peter Sandiford: “The difference is that rather than just giving away free licenses that will never be used we are delivering something much more valuable (more to come).”

If you’ve been following MSPmentor’s blog in recent weeks, you know the Freemium trend has been a central focus.

5. Missing Clouds: Several MSP software companies that have promised big clouds initiatives didn’t promote the efforts in the ConnectWise Partner Summit exhibit halls. Could some clouds be a bit behind schedule? On the other hand, plenty of new faces surfaced at ConnectWise Partner Summit — including PacketTrap among others.

4. Iron Man: ConnectWise CEO Arnie Bellini is competing today (Nov. 7) in the Iron Man competition. To track his progress using this link. He’s contestant 1954. UPDATE: Bellini finished in 12 hours, 29 minutes.

3. Big Deal: Rumor has it MX Logic (now owned by McAFee) has won a $5 million engagement with AT&T. My sources insist it’s true… I’m still checking…

2. Here Comes A Giant?: Watch out for Salesforce.com. A few names in the know say Salesforce is trying to figure out a way to launch an IT services management system for VARs and MSPs. But would VARs and MSPs welcome the effort?

1. Saving Frustrated Customers: An MSP in Southern California tells me 75 percent of the MSP deals they’re winning involve helping customers who are walking away from failed engagements with peer MSPs. Lots of low-cost, low-quality MSPs are set to implode.

That’s all for now. Watch for several FastChat Video interviews from ConnectWise Partner Summit to surface soon on MSPmentor.

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For the second time in a month, Microsoft has failed to have a presence at a major managed services conference. Microsoft’s absence from the two conferences — ConnectWise Partner Summit and N-able Partner Summit — is rather surprising to me, especially when I consider recent MSP-oriented moves by Google. Still, Microsoft does plan to attend the MSPAlliance’s upcoming MSPWorld event. Here’s what Microsoft is doing wrong (and right) in the managed services market.

First, let me clarify: I am not suggesting that Google has a stronger MSP story than Microsoft. But I am stating that Google seems to be engaging the next-generation IT channel while Microsoft is still sorting out an MSP-oriented communications strategy.

Consider this: Amid Windows 7’s launch and growing questions about Microsoft’s SaaS channel strategy, the software giant had a prime opportunity to attend N-able Partner Summit (350 MSPs and VARs) and ConnectWise Partner Summit (900 VARs and MSPs). Instead, Microsoft skipped both events.

Meanwhile, Google is here this week at the ConnectWise Partner Summit.

Sure, plenty of VARs and MSPs remain skeptical of the Google Apps reseller program. But Google Apps Channel Manager Jeff Ragusa says more than 400 partners have embraced Google Apps, and Ragusa is describing a shift from network-centric managed services to application-centric managed services at the ConnectWise Partner Summit.

Whether you cooperate or compete with Google, the search giant’s message is starting to reach MSPs.

Taking the Stage

What’s Microsoft’s managed services pitch? MSPs may find out if they attend the MSPAlliance MSPWorld conference Nov. 12 and 13 in Las Vegas. Microsoft is scheduled to keynote the event, which had 200 registrants (and climbing) as of October 2009, according to the MSPAlliance’s  Twitter Feed.

No doubt. there’s a prime opportunity for Microsoft to position Windows 7 as a well-managed client for MSPs. In fact, MSPs like District Computers LLC say they are booked every weekend through January 2010 with Windows 7 customer migrations.

The buzz on Windows 7 is generally positive as Microsoft markets the new operating system to consumers and businesses. Too bad Microsoft isn’t more aggressively communicating Windows 7’s value to MSPs. The N-able Partner Summit and ConnectWise Partner Summit were two missed opportunities for Microsoft. Hopefully, the software giant starts to get its MSP messaging right at the MSPWorld event.

MSPs aren’t looking for a product pitch. Microsoft better come armed with information about the business value of Windows 7. And if the software giant really wants to engage MSPs, Microsoft should also send BPOS (Business Productivity Online Suite) and Windows Azure representatives to managed services conferences.

Many MSPs are highly skeptical of BPOS. Time for Microsoft to answer their questions at managed services forums across the globe.

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When Google takes the stage at the ConnectWise Partner Summit, channel manager Jeff Ragusa will deliver a key message: The managed services market is poised to expand beyond infrastructure management to application management. Regardless of your stance on Google Apps, Ragusa’s message is dead-on: It’s time for MSPs to figure out their application management strategies.

Google has spent recent months building the Google Apps reseller program. In a typical scenario, VARs and MSPs can earn $10 per seat per year reselling Google Apps. For a typical 20-user company deployment, that’s only $200 in recurring annual revenue for a VAR. Ragusa concedes that’s not a huge figure. But he sees Google Apps opening up a range of higher-margin recurring revenue for VARs and MSPs.

A prime example: Ragusa asserts that MSPs are using Google Apps as a wedge that opens the door to strategic business discussions with customers. In theory, if customers are willing to pay a flat annual fee for Google Apps, they’re being trained to embrace key business models — SaaS, cloud services, subscription fees and so on. Suddenly, Ragusa says, VARs and MSPs can transition customer conversations beyond basic SaaS applications toward comprehensive managed services.

Ragusa also notes that Google offers Google Apps APIs, which allow VARs and MSPs to “develop applications that automate administrative tasks and integrate with your existing infrastructure.” Google also is considering an ISV partner program for Google Apps, The VAR Guy hears.

Reseller Agents vs. Application Integrators

There’s a key theme here that I will explore more in the days ahead: It’s not enough for VARs and MSPs to be reseller “agents” that earn small commissions from Google Apps, Microsoft Business Productivity Online Suite (BPOS), Exchange Online, SharePoint Online and other third-party SaaS (software as a service) applications. Already, Microsoft is cutting BPOS  and SaaS prices, which could pinch reseller agents over the long haul, I believe.

I truly believe the most profitable solutions providers will maintain application control — and perhaps even operating system control — in the cloud. Progressive integrators like Levementum and OpenBI are already deploying CRM, ERP and business applications in the Amazon Elastic Compute Cloud (EC2). Those integrators maintain application- and operating system-level control of the software they deploy in the cloud.

Meanwhile, MSP software providers are adjusting their tools to remotely monitor on-premise and cloud applications. The most recent example involves Nimsoft’s new Unified Monitoring dashboard.

Still, challenges remain: What applications — in which clouds — should you monitor? What type of pro-active services can you wrap around application monitoring? How do you price such services.

I’ll share more thoughts in the days ahead. And I look forward to your thoughts. In the meantime, Google’s Ragusa is right: It’s time for MSPs to master application-centric managed services.

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