Level Platforms Blog
Megatrend One: Large Corporations Enter the Market
February 22, 2010 11:00 AM
We generally think of Remote Monitoring and Management (RMM) in the SMB market as a way to dramatically transform the services productivity of regional VARs and solution providers. The benefits are significant and well known – decreased services costs, profitable recurring revenues, enhanced ability to upsell new products and services and improved customer responsiveness. Most observers agree that the majority of the 300,000 solution providers around the world will need to adopt RMM technologies to remain competitive.
However the implications off RMM spread well beyond the local MSP. Virtually every organization in the SMB supply chain is in the process of sorting out how this revolution in SMB services delivery impacts their business and how they should respond to the new opportunities and threats in a very different world in which:
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Most services can be delivered from anywhere over the Internet.
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All local customer asset and performance information can be captured and analyzed remotely.
Compounding this is the further thought that most applications will be delivered from the cloud. However I think almost everyone agrees that a considerable part of SMB IT will remain on premise so I want to set the cloud discussion aside for now and focus on RMM of on premise IT.
First let me size the issue/opportunity. In 2010 the SMB IT market supports a $100 billion services industry selling or influencing $1 trillion of products to 30 million SMBS around the world. There is a lot of money at stake and even small market shifts can have a major $ impact for the vendors and distributors that target the SMB market.
The responses that I have seen fall in two conflicting camps.
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Those that want to support the existing channel and leverage the technology for competitive advantage.
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Those that see this as a unique opportunity to create a direct service and sales business to SMBs.
For vendors and distributors that participate in the current solution provider/MSP supply chain the reaction has predictably and uniformly been to discover ways to leverage this development for their own advantage motivated by:
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Generating new services revenues
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Creating increased channel loyalty
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Tapping into valuable market data
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Ensuring a better end customer experience for their products
Examples of organizations that have made a significant commitment to support their channel partners include Ingram Micro, Intel, Acer/Gateway, Cisco and many others.
Service providers with no existing channel to offend see this quite differently. For them RMM technologies represent a potential to expand existing service capabilities or end customer relationships to bypass the existing structure. Their motivations are similar to the first group if you simply replace “channel loyalty” with “end customer loyalty”. Examples include telcos, retail, ISVs and enterprise service providers. I expect this list to expand to include non IT organizations that see this as a way to further monetize their customer relationships. Efforts in this area have been relatively few but we are in the early stages. There is no doubt however that the potential opportunity is under careful study by many organizations around the world with pilots underway or planned for 2010.
It is clear to me that Dell is the leader in this second group. It makes perfect sense for them after 20 years to simply shift their tag line from “product direct” to “service direct”. While they have retained a handful of MSP channel partners these are simply resellers of a centralized Dell service rather than MSPs defining a unique service offering to their end customers.
And Microsoft as always is everywhere and nowhere. But it seems clear that remote IT services have been shifted to the back burner for now as they focus on Software and Services, which for the SMB is focused on Business Productivity Online Suite (BPOS).
All of this is great news for solution providers and MSPs as finally some serious money is beginning to flow into technology and market development. The first group – the existing vendors and distributors are bringing major investment in technology, branding, and eventually end user demand pull. As the strategic values described above become better understood these investments will be significant. Paradoxically the second group will also be good news to MSPs, since their early investments will all be around end user demand generation thereby helping to address the biggest hurdle MSPs face today in expanding their business.
The MSPs that tap into these vendor/distributor programs will benefit. The idea that each local solution provider should define and build their own managed services business themselves made sense in the early adopter stage of managed services. In the future even larger MSPs will integrate into these programs and services as they ultimately grow to influence the direction of the MSP market.
Level Platforms is working with the vast majority of the large corporations considering entering the market. We are working with them to understand their objectives and to help design programs that will allow them to bring real benefits to their channel partners and end customers through RMM technology. In 2010 alone we will be announcing at least six major initiatives from large channel-focused corporations that are designed and developed specifically around Level Platforms technology and therefore providing direct competitive advantage to our Partners. Level Platforms Partners will significantly benefit from the investments now underway as large corporations bring major new innovations to the MSP market.
Next week I will address Managed Services Megatrend Two – SaaS and Cloud Services.Categories: Managed Services
