MSPmentor

Break-Fix Customers: Keep Them or Dump Them?

Peter Klanian — Thu, 18 Mar 2010 19:02:40 +0000

Normally, I like to keep my blogs to advice and tips on how to market and sell managed services. This month, I am going in a different direction. I want to ask you a question that I am unsettled on. I want to hear your opinion and get your thoughts on this. After making the switch to a managed services business model, what do you do with customers who refuse to give up your break-fix services?

Do you fire them or keep them on as break-fix clients. A lot of my Virtual Administrator partners ask this question, and I honestly don’t know what the correct answer is. I understand and get both arguments. My conundrum is that they both have valid points.

Here is my take on both sides.

Keep Them

Three arguments for keeping them on as a break-fix client:

The economy is tough. It makes no sense firing long-time paying break-fix clients in favor of new unproven managed services ones.
When the economy improves, the break-fix clients are likely to switch to managed services anyway. Let’s keep them on and hope to convert them down the road.
Keeping your break fix clients on will help pay the bills while building your managed services business.

Dump Them

Three arguments for cutting them:

Break-fix clients always nickel and dime you to death. They argue every bill you send them, so why keep them around and waste the effort.
Your managed services business model becomes cloudy and difficult to build when you are offering both break-fix and managed services simultaneously. Having clarity and a single mindedness with your business model makes building a business easier.
Doing work for break-fix clients will detract from the attention you should give your better paying manages services clients. Trying to balance both can be difficult, and you should focus your efforts on the long term managed services business.

My Take

If I were starting a managed services practice from scratch, I would focus my 100% effort on acquiring just managed services clients. No break-fix customers for me. I think it makes your business easier to build when you have a single minded focus. If owned an existing break-fix business making the change to managed services, I would think long and hard about firing my break-fix clients. I would enact a plan to slowly wean my business off of them until I had adequate managed services clients to pay the bills.

So what do you think is the right answer?

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’s 2010 Platinum sponsorship.

Where Are Tomorrow’s MSPs Hiding?

Joe Panettieri — Thu, 18 Mar 2010 15:31:41 +0000

A quiet race to recruit managed service providers into associations and user groups continues. The latest example: CompTIA MSP Partners has announced a relationship with PartnerConduit Network, an online community that helps solutions providers to manage collaborative opportunities. Here’s a look at the relationship. Plus, a broader look at the effort to find and recruit MSPs into associations, organizations and user groups.

First, a look at today’s news involving CompTIA MSP Partners and PartnerConduit Network. According to a joint press release:

The new alliance will provide participants―including technology vendors, channel partners and solution providers―with additional cross-collaborative and networking opportunities to achieve greater growth, reach, efficiency and profitability…

PCN (short for PartnerConduit Network) and CompTIA MSP Partners also announced a series of cross-promotional efforts involving education and member discounts.

MSP Partners was founded in 2007 by Cisco, Intel, Ingram Micro, Level Platforms and Microsoft as an effort to increase managed services awareness. The alliance has grown to about 5,000 members since its launch. CompTIA acquired MSP Partners in 2009, in a deal that promised to further raise MSP Partners’ visibility in the channel.

Where Are Tomorrow’s MSPs?

The MSP Partners-PCN relationship puts the spotlight on a larger industry question: It’s getting increasingly difficult to recruit MSPs into paid associations and organizations. Simply put: MSPs are short on time and overloaded with event and/or member invites from associations, vendors, education bodies, coaches and media companies (MSPmentor included).

To find and engage tomorrow’s MSPs, some associations and organizations have increasingly shifted to low-cost or free membership models.

The MSPAlliance — the oldest and largest industry association serving managed services providers — has been using free membership drives from time to time, to boost recruitment numbers. MSPAlliance, founded around 2000 (I believe), now says it has more than 10,000 members worldwide.

A range of additional groups and associations also serve the MSP market — from the ASCII Group to MSP University (organizer of boot camps) to industry coaches to vendor-led efforts.

Most of the major PSA (professional services automation) and RMM (remote monitoring and management) software providers now promote face-to-face and online user groups. The next major move will likely involve Kaseya, which appears to be preparing an online community strategy that will likely launch in time for Kaseya Connect — a user conference scheduled for June 1-3 in Las Vegas.

The Real Challenge

Ultimately, I think media companies, associations, coaches and vendors are fighting for the attention of a highly niche audience.

For example: Let’s assume the North American channel has between 80,000 to 120,000 solution provider organizations — ranging from one-man shops to massive IT consulting firms. I suspect only 10 to 20 percent of that audience — 8,000 to 24,000 solutions providers — have made a successful shift to managed services. Other areas (such as Europe and Australia) are perhaps one-tenth the MSP market size of North America.

Tracking down and engaging those established and aspiring MSPs is a full-time job — whether you’re a lunatic blogger, a coach, a vendor or a large association.

Free offers will pull in some of the people some of the time. Quality education and programs will pull in more of the people more of the time. Mind you: I’m not criticizing free or freemium. But even free has to deliver value in order to keep MSPs coming back for more.

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RSA Releases New Data Loss Prevention Suite

Matthew Weinberger — Thu, 18 Mar 2010 06:38:04 +0000

RSA, the security division of EMC, has released a new version of its global enterprise-targeted Data Loss Prevention (DLP) Suite with over 70 new features. Here are some details.

As the name implies, DLP Suite version 8.0 is designed to protect sensitive data from loss, leakage, or misuse from the data center to the network to the endpoints, RSA says. The goal is to allow global organizations to collaborate more securely and minimize risk.

Per the official press release, a quick overview of the new features:

Native scanning of the Microsoft Sharepoint and IBM Lotus Notes collaboration platforms
Expanded capabilities for Chinese, Japanese, and Korean languages
Generation of trend and summary reports according to department, incident type, severity, and status
New and updated policy templates

And many others, or so they say.

There’s not much else to say, except that recent events have proven the wisdom of investing in security and data leakage protection architecture.

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GreatAmerica Leasing Makes Managed Services Moves

Joe Panettieri — Thu, 18 Mar 2010 02:52:42 +0000

GreatAmerica Leasing Corp., a U.S. commercial equipment finance company, is making multiple moves to engage managed services providers, managed print experts, and VARs that participate in HTG Peer Groups. Here are some of the emerging details.

First, the big picture: GreatAmerica provides financing and consulting services in all 50 states and some U.S. Territories. The company has 300-plus employees with offices in Colorado, Florida, Georgia, and Missouri, according to the company’s website.

GreatAmerica already has longstanding relationships with a range of printer companies — folks like Kyocera, Oki Printing Solutions, and Xerox. Building on those relationships, GreatAmerica will launch a Managed Print Services (MPS) Navigator planning session in April. The session will help dealers and MSPs to develop a business model and operational structure, compensation plan, and go-to-market strategy for managed print services. In some ways, GreatAmerica’s efforts sound similar to Photizo Group’s MPS Conference series.

Engaging VARs and MSPs

Still, managed print is only part of GreatAmerica’s strategy. Apparently, the financing company is planning a closer working relationship with HTG Peer Groups, an organization that includes dozens of VARs and MSPs that share best practices.

The forthcoming GreatAmerica-HTG relationship surfaced on HTG’s Twitter feed. What exactly will it involve? I’ve got a note into HTG seeking additional comment.

In the meantime, GreatAmerica’s work with the channel sounds encouraging. At a time when so many solutions providers and small business customers are stretched for cash, leasing programs can certainly come in handy.

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SaaS for MSPs: It’s About Effeciency, Not Big Profits

Joe Panettieri — Wed, 17 Mar 2010 17:08:14 +0000

I concede: I often blog about the fact that many SaaS applications like Microsoft BPOS (Business Productivity Online Suite) don’t offer VARs and MSPs enough profit margin opportunity. But I had a rather enlightening conversation yesterday with Next Level Cafe, a managed services provider based in Minnesota. CEO Richard Anderson offered some timely perspective on the true SaaS opportunity. Here it is.

Anderson described how Next Level Cafe made the switch to managed services back in 2002 or so. Then about three years ago, the company started making more and more SaaS moves — including a relationship with Intronis, the online backup specialist.

Anderson’s key learning: SaaS (software as a service) isn’t about generating big profits or massive margins — at least not in the near-term. Instead, it’s about efficiency and automation. You gain some valuable recurring revenue. But more importantly, you’re freed up to work on strategic projects for your customers.

Apparently, SaaS and managed services are treating Next Level Cafe well. Roughly 85 percent of the company’s sales involve recurring revenue (SaaS and managed services) engagements. Anderson will share more details during The VAR Guy’s April 7 Webcast, Getting Started with SaaS.

If you’ve got questions for Anderson, feel free to post a comment or email me (joe [at] NineLivesMediaInc.com). We’ll cover dozens of attendee questions during the webcast.

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Autotask Acquires VARStreet: Services, Products Converge

Joe Panettieri — Wed, 17 Mar 2010 12:00:07 +0000

And now for something completely different. Autotask has acquired VARStreet. The move potentially allows VARs and MSPs to have a single dashboard for managing distributor relationships and product sourcing (VARStreet) and IT services automation (Autotask). Here’s some analysis of the deal, the potential implications, and a FastChat video conversation with Autotask CEO Bob Godgart.

According to the official statement from Autotask, VARStreet is a cloud-based e-commerce platform that offers “powerful tools to automate and streamline the entire IT product sales and procurement process.” Or as Godgart told me: Autotask and VARStreet represent “managed service and managed product, all under one roof.”

Think of it this way:

Historically, Autotask has appealed to MSPs that want to more effectively manage their service engagements and internal business processes.
VARStreet has appealed to a few hundred VARs that want to rapidly source IT products from distributors and generate the best hardware margin possible.
In theory, Autotask and VARStreet together could offer VARs and MSPs a single dashboard for managing service and product engagements.

Is this a game changing move? Potentially yes. Roughly $1 billion worth of IT product sales flow through VARStreet annually. As one distributor source put it, “Autotask is gaining a solid platform in VARStreet. It’s a brilliant move by Godgart. VARStreet really works as advertised.”

But therein lies the key challenge: VARStreet is a solid platform that has lacked aggressive sales, marketing and promotion to VARs for roughly five years. In many ways, VARStreet’s marketing and partner efforts never really promoted the systems’ technical power. (You’ll find more details about VARStreet’s business history over on The VAR Guy.)

What VARStreet Is

Clearly Autotask hopes to bolster VARStreet’s position in the market. The system, which Autotask has quietly expanded over the past three months, includes:

VARStreet Back-Office technology, a “completely integrated IT Product Sales and Procurement platform that includes real-time pricing and availability from distributors, advanced product quoting, sourcing and fulfillment.”
VARStreet e-Commerce includes VARStreet Back-Office plus a complete VAR-branded and controlled e-storefront.
And an existing high-end VARStreet XC platform, with “more power features and controls, rounds out the product line.”
All three products are available immediately. An embedded e-commerce module for Autotask is scheduled for release in late April, 2010, following the Autotask Community Live conference.

The Big Picture

In the following FastChat video, Godgart further describes Autotask’s buyout of VARStreet, and the implications for VARs and MSPs:

Click here to view the embedded video.

The video discussion covers:

0:00: Introduction
0:15: A quick overview of Autotask buying VARStreet
0:48: What the VARStreet platform does
1:50: What the deal means to Autotask customers, VARStreet customers and the broader VAR market
3:11: A single dashboard for product and service management?
3:45: Integrating VARStreet with Autotask
4:00: Where to find more information
4:23: Conclusion

Current Users

True believers in the VARStreet platform include large VARs and solutions providers like Emtec, Pomeroy IT Solutions and Zebra Technologies, according to Autotask.

On paper, the deal potentially is a win-win for Autotask and thousands of VARs that have yet to automate their businesses. The move also potentially allows Autotask to push beyond the traditional PSA (professional services automation) market, where multiple vendors (Autotask, ConnectWise and Tigerpaw, most notably) have been battling for MSP marketshare.

As a distribution source put it, “VARStreet’s technology works, and it allows Autotask to change the conversation and move beyond the basic PSA discussion, which is a knife fight with ConnectWise. Now, Autotask has a solution for all VARs — even those who haven’t joined the managed services discussion.”

I’ve got a note out to the PSA industry players for their potential reaction to the Autotask-VARStreet news.

The Changing Role of PSA

The Autotask-VARStreet move is the latest indication that the PSA software industry has evolved far beyond trouble tickets and service management.

Sources say Autotask and VARStreet have been working on this potential business combination since around September 2009. Around the same time, ConnectWise started developing plans for ConnectWise Capital — an incubator that has since invested in CharTec (hardware as a service) and LabTech (remote monitoring and management).

No doubt, the ConnectWise vs. Autotask competition sometimes involves dramatic company statements. But ultimately, these are two very different companies moving in very different directions.

In recent months, Autotask and ConnectWise have been talking less about each other and focusing more on new or different market opportunities. That’s a healthy development for both companies. And a healthy development for MSPs and VARs that need to move beyond the basic PSA and RMM mindset.

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Mezeo: Integrating Cloud Storage With Windows

Matthew Weinberger — Wed, 17 Mar 2010 04:16:50 +0000

There’s no shortage of cloud storage vendors willing to partner with managed services providers. All the same, a recent demonstration of Mezeo Software’s white label storage solution — specifically their integration with Windows — left me impressed. Here’s why.

The Texas-based Mezeo was formed in 2008 to be the first cloud storage provider with REST APIs, drastically increasing the ease of retrieving stored data, says Mezeo Software CEO Steve Lesem. They don’t host their namesake cloud storage platform themselves, but Mezeo does deal with what they call “Premier Hosting Providers” like NaviSite or SoftLayer who can do it for you if your own hardware isn’t up to the task.

The advantage to that arrangement is that an MSP can shop around for the best deal on a Mezeo deployment, or do business with existing partners. Since Mezeo is entirely rebrandable, it doesn’t much matter whose data center its coming out of, especially when you’re using it as the backend to a service you rolled yourself.

But that’s not Mezeo’s main attraction. Mezeo’s Lane Pierce demonstrated their solution for me. Simply put, their cloud storage client appears to integrate with Windows better than some MP3 players I’ve used (I’m looking at you, Sony).

Your Mezeo storage appears as just another network drive in Windows Explorer, and you can drag and drop files in and out of it. In addition to the now-expected file sharing, Mezeo’s client also supports projects, where everybody can see a certain grouping of files and, depending on their access level, view, edit, and delete them.

The only hitch is that while all files and file changes appear in real time in your filesystem, Mezeo requires users log in to their web panel for advanced controls like setting expiration dates on shared files and setting those access roles. But day-to-day tasks like viewing documents and keeping files in sync across computers are handled through the Windows shell.

I promise I’m not on Mezeo’s payroll: I’ll be giving their service a whirl for myself over the next few days, and if it turns out Pierce was pulling the wool over my eyes with their impressive demo, rest assured MSPmentor’s readership will know it. But I’m intrigued by what I’ve seen so far.

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MSP Acquisitions: Latisys Makes Another Move

John Moore — Tue, 16 Mar 2010 18:50:28 +0000

Latisys, a colocation and managed services provider, is back on the acquisition track, purchasing a Washington, D.C. area firm that provides a similar set of services. Here are the details.

Launching in June 2007, Latisys has previously purchased companies in Irvine, Calif., Denver, and Oakbrook, Ill. The latest acquisition is Pryme Technologies in Ashburn, Va. Latisys says it will convert Pryme’s business into a 123,000 square foot data center campus.

Latisys did business in the government sector prior to the Pryme acquisition. It didn’t inherit any government customers from that purchase, however.

A spokesman for Latisys said the company anticipates the suburban Washington facility will be able to address federal government requirements. He said the newly acquired square footage provides the space to meet current demands and future needs; the company expects significant growth in the D.C. market.

Latisys isn’t alone in that respect. A number of companies are expanding data centers and service offerings in the capital region. In 2009, Carpathia Hosting debuted a line of managed hosting solutions for federal agencies and rolled out a business unit of government customers.

The federal interest in cloud computing is one factor attracting managed hosting firms and companies with cloud offerings — Microsoft and Google among them.

Federal systems integrators, meanwhile, also offer managed services — as is the case with CGI and CSC.

While that seems like quite a roster of companies, the government often establishes multiple-award contract vehicles. Such programs let a number of contractors compete for task orders, which are essentially mini-competitions within the framework of the contract vehicle. While a share of a multiple-award deal is no guarantee of big bucks, it’s at least a foot in the door.

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The Utility Company Attracts $1 Million In Funding

Joe Panettieri — Tue, 16 Mar 2010 15:16:51 +0000

Call it a small step for the managed services market, but a significant move for the Utility Company. The Master MSP, which works with a range of managed services providers, has attracted $1 million in financing, led by BDC Capital Inc. The Utility Company plans to use the money for a mid-market push, among other things. Here are the details.

First, a little background. During a range of recent partner events, a few MSP industry veterans have asked me to start “writing” the history of the managed services market in my free time. (Free time?) More to the point: If such a book was ever published, those industry veterans have asked me to include a chapter on Mark Scott, president and founder of The Utility Company. Scott also was co-founder of N-able.

Alas, many of us in the media (myself included) joined the managed services story a bit late. I was busy moderating CIO roundtables and conferences over at Ziff Davis, while Scott and other pundits were pioneering the managed services market. At some point, I’ll catch up soon with Scott and gather some more of the back-story. I doubt I’ll write a book… but perhaps there’s a blog series waiting to come together.

Today’s News

Fast forward to the present, and Scott is busy building the Utility Company. The company’s pitch goes something like this:

“The Utility Company is a leading provider of virtual IT service and support for small and medium-sized businesses, delivering the required hardware, software and service for a monthly fixed fee per user. Our Connected Office service program provides a single point of contact to deliver and manage technology, communications and vertical line of business applications –- 95% Remote; 100% Proactive.

In order to scale the business, the Utility Company works with a range MSPs. Looking ahead, the $1 million in funding will be “utilized for sales and marketing of the company’s Connected Office (CO) service portfolio, including the upcoming CO Enterprise Program for the mid-market and the new Utility Preferred Supplier Program,” according to a prepared statement.

Moving Upstream

Re-read that last paragraph again. The mid-market enterprise program represents a growing trend in the managed services market, where software providers are pushing beyond their small business heritage to engage midsize customers.

I concede: I need to dig deeper to see how The Utility Company’s existing SMB services are performing. But during the conversation, perhaps I’ll begin to rewind a bit with Scott to talk about the earlier days of managed services.

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Could Push Messaging Push MSPs Into Mobile Services?

Eric Webster — Tue, 16 Mar 2010 12:52:31 +0000

As smartphone usage has exploded—up 55% last year in the United States (comScore)—the popularity of push messaging has increased on a parallel track. Messaging gives workers more collaborative power with immediate access to what’s new in their e-mail, contacts, calendar, and social media. Push messaging makes utilizing applications on mobile devices more convenient and consistent—factors that are sure to drive the market even further. But where do MSPs fit into this market trend?

First, let’s take a closer look at the user benefits. By utilizing push notifications on mobile applications instead of background application processes, users can minimize the network footprint for each device. In layman’s terms, these notifications run lean because the server does all the heavy lifting. A user won’t drain the battery on a mobile device by logging in and out all day. In addition, push notifications relieve some of the bandwidth overcrowding as carriers scramble to keep up with demand.

There’s been a lot of buzz about push notifications during the past week. HyperOffice announced beta testing for its push messaging service (HyperSync) across a variety of smartphone platforms including the iPhone, BlackBerry, and Android. On the same day, Urban Airship, who has been very successful on iPhone, announced that its push notifications application is now functional for BlackBerry and will soon be for the Android as well.

If this market were to expand to the reseller space, it would help solve the question of whether smaller MSPs should delve into the mobile arena. As consumers become more dependent on mobile devices for everyday business functions, small business on the whole will soon follow suit.

All in all, the ongoing development of mobile services will make offering these as part of a comprehensive managed plan an imperative—maybe not this year, but soon. Sure there are big players like Orange in the game, but don’t let that be a deterrent. There is a good share of profit-making potential by adding mobile managed services to your portfolio. If your clients aren’t utilizing mobile data yet, all trends predict that they soon will be.

Eric Webster is VP of sales and marketing for Intronis. Find Intronis partner program information here. Guest blog entries such as this one are contributed on a monthly basis as part of MSPmentor’s 2010 Platinum sponsorship. Read all of Eric’s guest blog entries here.

MSPmentor

Break-Fix Customers: Keep Them or Dump Them?

Keep Them

Dump Them

My Take

Read More About This Topic

Where Are Tomorrow’s MSPs Hiding?

Where Are Tomorrow’s MSPs?

The Real Challenge

Read More About This Topic

RSA Releases New Data Loss Prevention Suite

Read More About This Topic

GreatAmerica Leasing Makes Managed Services Moves

Engaging VARs and MSPs

Read More About This Topic

SaaS for MSPs: It’s About Effeciency, Not Big Profits

Read More About This Topic

Autotask Acquires VARStreet: Services, Products Converge

What VARStreet Is

The Big Picture

Current Users

The Changing Role of PSA

Read More About This Topic

Mezeo: Integrating Cloud Storage With Windows

Read More About This Topic

MSP Acquisitions: Latisys Makes Another Move

Read More About This Topic

The Utility Company Attracts $1 Million In Funding

Today’s News

Moving Upstream

Read More About This Topic

Could Push Messaging Push MSPs Into Mobile Services?

Read More About This Topic