Everyone wants to be an MSP

Published: October 27th, 2006

The latest buzzword is managed services, and it seems everyone wants a piece of the action – including distributors.

While everyone has a different definition of managed services, one thing is certain: The managed services business requires a significant investment, since you have to build a scalable infrastructure that can support multiple customers on a seven-by-24 basis. You also have to meet certain security and service level requirements. And this means having a team of experts on staff to run your network operations centre.

This is why distributors are starting to resell managed services to VARs as an offering they can sell to their customers, since most small partners can’t afford to build their own managed services infrastructures. Most charge VARs for the service based on the number of devices monitored or maintained on a customer’s network.

Ingram Micro, for example, just teamed up with Ottawa’s LPI Level Platforms, which provides remote monitoring and management software. Ingram’s Seismic Platform and Virtual Services Warehouse will be based around LPI’s Managed Workplace MSP platform. Over the next few years, Ingram also plans to partner with other providers to offer a range of services, from e-mail management to storage backup.

Perhaps most importantly, however, is that Ingram will provide a database of MSP best practices to help VARs understand the business.

Tech Data also plans to resell hosted remote monitoring and management services through MSP InnovationTechs. The distributor says it will offer two products: NetWatch for basic device monitoring, and NetManage for proactive managed services, such as software updates, security patches and network performance enhancement.

This means Tech Data will be in direct competition with Ingram in the MSP space, and with other MSPs offering remote monitoring and management services, such as N-able Technologies.

Synnex already offers remote managed services through its acquisition of Microland, based in Bangalore, India, and Avnet offers hosted services by using excess capacity in its data centres.

While there are clearly benefits to this model, some critics argue that having a tier-one distributor resell managed services adds another layer of complexity into the mix. After all, VARs can go directly to the MSPs themselves. This means the relationship between the distributor and the MSP has to be a profitable one, which could serve to drive down margins and commoditize managed services.

Providing managed services isn’t a simple proposition. And it’s not cheap. Then there’s the issue of tech support: Who does what?

The market is chaotic, with new MSPs seemily popping up daily. This is where distributors can play a role for their partners by doing the research and choosing the cream of the MSP crop – and using their trusted brand name to provide assurance to VARs and their customers.