To Win at Everything as a Service You Need to Do…Everything
Or at least more than one thing, as Advantix, GoTo, Eaton, and others who combine managed services with something else told us this week.
You can make money providing managed services. You can make money providing telco services. You can make more money providing both, and judging by the crowd at this week’s Channel Partners Conference & Expo in Las Vegas, plus the MSP Summit before it, this fundamental truth is catching on.
Both events showcased plenty of ways telco agents can get into managed services and MSPs can earn incremental MRR through communication services. For example, while many MSPs sell and/or support mobile devices, not many also provide the mobile carrier service those devices need to be useful.
Advantix wants to change that. The self-described “managed connectivity experience provider” offers access to a dozen mobile carriers through a single “smart SIM” card.
“It’s smart enough to change to the next carrier if the session drops,” says Natasha Royer Coons (pictured), the company’s CEO since last month and CRO before that.
You don’t need to know anything about carriers or mobile connectivity to deliver the service either, because Advantix (which sells exclusively through the channel) configures, implements, and manages everything for you, on a white label basis if you wish.
“It really ends up being a very simple sales motion” for MSPs, Coons says. “They can just basically sell it and receive a commission.”
Margins generally run in the double digits, she adds, and there are lots of potential use cases, ranging from transportation businesses and home healthcare providers with roaming employees to retail outlets and hybrid workers who need backup connectivity when Wi-Fi goes down.
“You can have it basically suspend until it’s needed,” Coons says. “It’s just like an insurance policy without carrying a ton of fixed costs.”
GoTo, meanwhile, is coming at the same opportunity from the other direction by offering telco agents a route into managed IT. In addition to the voice services such partners are used to selling, the company offers a variety of unified communication and collaboration solutions as well. Unlike its competitors, however, GoTo also has RMM, ticketing, and remote access tools, with a mobile device management application based on technology acquired along with Miradore last year coming soon. Agents can use those tools, after establishing a beachhead in UC&C, to move into cloud and network management as well.
“Many of them are trying to figure out how do I bring other products to market,” says Mike Day, the vendor’s vice president of global partner sales.
MSPs, meanwhile, can use those same tools to pivot from managed IT into communications. “Our hope is that the products we bring to market can help them bridge that gap faster,” Day says.
Unspoken by either Day or Coons is the implication that if you can’t provide both managed IT and communication services, you’re potentially at a competitive disadvantage.
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Eaton Sees Power in Managed Power Services
The quest to add managed services to something else or something else to managed services proved to be a unifying theme in a week that had me flying straight from the Channel Partners show to Eaton’s annual partner conference in Phoenix. So far, and despite economic headwinds, sales of the company’s uninterruptible power supplies, power distribution units, and other power quality products are holding strong.
“The market’s in good shape,” says Herve Tardy (pictured), vice president of marketing and strategy for Eaton’s critical power and digital infrastructure division, who says U.S. power solution revenue rose 15% in Q1 and is likely to grow around 10% through the rest of the year.
Margins, however, are another story. Eaton partners, especially in the SMB space, find themselves fighting a losing war for profit with the likes of CDW and online mass marketers.
“You will never be the best price if the customer is only looking for price,” Tardy says.
Enter managed services. Bundling a hardware sale with monitoring, maintenance, and remote support adds a steady stream of margin-rich service revenue to what’s otherwise a one-time, low-margin deal.
“That’s why we see all of them moving to an MSP model,” says Tardy of Eaton’s SMB partners. “MSP is easy to monetize for them.”
Eaton is on the verge of making it easier still. After 18 months of effort, the company expects to roll out Brightlayer, its next-generation monitoring and management solution, at the end of the month. The new system employs one code base and one interface to provide functionality previously delivered by five stand-alone applications. Partners can host the multi-tenant product on-prem, in the cloud, or hybrid, and it integrates with the ConnectWise Automate RMM system.
The only thing missing from the picture is something businesses increasingly want these days, at least in other IT segments: the option to buy hardware and management together as a service. That could come eventually, but won’t be arriving soon, according to Mike Jackson, Eaton’s general manager of data center software.
“The initial hardware sale still has to happen,” he says. “I don’t know if we’ll get to the point where it’s all wrapped into a single fee.”
The Logic of Partnering with Sumo Logic
Global cloud infrastructure spending grew 19% in Q1 to $66.4 billion, according to a report from Canalys yesterday. That’s actually the first time the analyst has ever recorded growth below 20% (credit macroeconomic uncertainty for that milestone) but by the standards of a normal business it’s still, you know, pretty good.
Anything that grows by solid double digits despite a shaky economy probably has serious upside still ahead of it, and cloud management will offer plenty of revenue potential for some time. But as with all good things in IT, workaday cloud management will eventually decay from hot new market to commodity. Wise MSPs should be thinking ahead now to how they’ll set themselves apart when that day arrives.
Sumo Logic, who I met with in Las Vegas, has a suggestion. Its cloud log analytics platform enables partners with the proper skills to offer sophisticated cloud reliability and security insights to what are often referred to as “digital natives”.
Those aren’t necessarily large organizations either. Sumo does half its business with SMBs, and since last August has been doing so in a “partner-first” fashion that includes a partner in every deal. Timm Hoyt (pictured), Sumo’s senior vice president of worldwide partners and alliances, would love for a rising share of those partners to be managed service providers.
“We’re excited about the MSP and MSSP market, and we’ve seen tremendous growth there in the early days of our pivot towards partner first,” he says.
There’s a catch, though. While Sumo’s software isn’t hard to learn or deploy, according to Hoyt, building a practice around it typically requires baseline familiarity with cloud analytics and SIEM operations.
“It’s definitely not for the greenhorns out there,” Hoyt warns.
Which may be why the company has about 70 MSP partners at present. It wants more, but not a lot more. “We’re not seeking to go get 1,000 MSPs,” Hoyt says.
All of which suggests two things: most MSPs will have to make some tool and talent investments before partnering with Sumo, and those that do will not be in danger of commoditization any time soon.
Not sold? You can always go deep on SharePoint customization, or Power BI solutions, or Salesforce implementation. But consider shopping for a specialization of some kind now, before you stumble into the commoditization trap.
VIPRE is Betting on MDR and MSPs
One last scoop from the road this week: VIPRE Security has an MDR solution coming in June, and a unified front end for its entire portfolio of solutions—which includes email and endpoint security systems, a security awareness training service, and threat intelligence—within months.
“It’s going to be one big interface where you can pick and choose which ones of our products you want to use,” says Marc Malafronte (pictured), the vendor’s channel chief.
Malafronte joined VIPRE last June at the behest of CRO Lee Schor (a veteran of both Sophos and StorageCraft) to lead a new channel-first sales strategy. Since then, he’s overhauled the partner program, increased the MDF budget, roughly doubled the channel sales force, and hired the company’s first channel marketing manager.
“It’s only a guess, but we’ve put somewhere between $10 and $15 million into the channel this year, which is a very sizable investment, I think, for our company,” Malafronte says. There’s more coming, he adds.
Also worth noting
Sophos is the latest is a string of security vendors with a deal that saves U.S. customers money on cyber insurance.
Keeper Security is the newest addition to the Pax8 line card.
ManageEngine’s identity security solution, ADSelfService Plus, can now enforce MFA even when users are offline.
Action1 has vulnerability discovery and prioritization coming to its patch management platform in the back half of the year