The clock is ticking on managed services

Here’s a tip for channel partners who want to catch onto the next big wave and exploit what will likely become a tremendous opportunity.

Think seriously about becoming a managed-services provider. But don’t think too long because the clock is ticking.

It’s no small undertaking to construct a managed service. It can take a long time. Long View Systems of Calgary, for example, took more than three years to get its managed services offering up and running. And, that company started in 2000. Today its managed services business is “through the roof,” according to Don Sottile, a vice-president at the company.

One route a VAR can take is through Ingram Micro and its Seismic offering. The distributor lets VARs resell managed services its backend infrastructure, including network operations centre (NOC) and help desk services.

Building out a NOC can be prohibitively expensive and time consuming for most VARs who don’t have the pockets of an Ingram or Long View Systems.

Another approach might be with the Utility Co. in Ottawa. It is a self-described technology-as-a-service provider. Their managed service offering targets the SMB space. Utility Co. has a franchise business model where a VAR licenses the service from the Utility Co. for a fee then bundles it with other own offerings.

IT vendors, too, are well into the business of managed services, including Dell through its Silverback Technologies acquisition, Google through its Skype and Postini – a company who through its purchase of service provider Burbee International last year will start to steal customers from solution providers through a low cost managed services play.

There’s a lucrative SMB market that’s traditionally been underserved in the IT services space and just waiting for the right offering to come along. Dell and many other IT vendors must work through the channel to successfully penetrate SMB.

But time is of the essence. The longer VARs wait, the more they risk being beaten to the punch and missing out on the current window of opportunity.

Managed services or full-service technology-as-a-service is an excellent strategy for developing recurring revenue streams from businesses – especially those that are five employees or less. Recurring revenues often sustain IT companies through difficult economic times. There’s tremendous customer interest in a “utility-like” computing IT services charged on pay-per-use or monthly rates. Customers need not worry about IT infrastructure-type services and can instead concentrate fully on core business.

The partner advantage is having direct and close relationship with SMB customers – something that IT vendors such as Dell, Google and to a certain extent CDW do not. A VAR can help increase a customer’s IT business presence in a local market.

As I said early, the clock is ticking on the managed services opportunity. Dell, Google and the rest of the big players may move slow, but they are focused and will eventually get there and price you out of this opportunity.

One quick hit before I go: The CDN Top 100 Solution Provider Event will take place May 1st at the Paramount Conference and Event Venue in North Toronto. A lot of attendees of the Top 100 event also plan to stay in Toronto for SMB Nation, which has a channel component to from previous U.S.-based shows. It starts on May 3 and runs to the 4th at Microsoft Canada’s campus in Mississauga, Ont.

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Jim Love, Chief Content Officer, IT World Canada
Paolo Del Nibletto
Paolo Del Nibletto
Editor of Computer Dealer News, covering Canada's IT channel community.

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