Plugging In: Cash In On Managed Services

It's mid-December in San Francisco, and 15 or so solution providers toil in a downtown hotel to replicate a managed-services model projected on a screen. It's the first of many such events that Kaseya will be hosting in the coming year to sign up resellers to use its remote management systems and transform their own businesses from traditional VARs to managed-services providers (MSPs).

"We've done a very good job of selling into the nascent MSP community, but we want to show [partners] how to use our systems to transform IT once you get the infrastructure in place," says Kaseya CEO Gerald Blackie. "Our goal in the coming year is to use these seminars to show our partners how and what to sell in a way that customers understand and to get their IT staffs to change from being reactive and event-driven to more proactive."

Managed services are transforming the channel. Traditional VARs have adopted managed services to expand their business opportunities and offset shrinking margins in commoditized hardware and software. According to the 2006 VARBusiness State of the Market (SOM) survey, most solution providers are offering a service in some form or are planning to in the coming year. providers expanding beyond product sales earn, on average, nearly a quarter of their revenue from managed services.

So, what exactly is managed services? In a nutshell, it's the outsourcing of virtually any IT function that can be done in-house. The key is ensuring that managed services run with the same level of transparency that they would on-site. New services are popping up all the time and currently include desktop maintenance, patch management, network-performance monitoring, intrusion detection and prevention, remote backup and storage, spyware and adware prevention, customer relationship management and call-center administration. In short, anything that boosts an organization's productivity and off-loads the burden to a third party can be considered a managed service.

Properly implemented, managed services have the potential to create more consistent, higher-margin revenue streams for solution providers while streamlining business processes.

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