Is It MSP Madness?

Despite being a member of the press responsible for a lot of the hype in the technology world, sometimes even my hype meter kicks in. And lately, it has been red-lining whenever I hear the term managed services.

LARRY HOOPER Can be reached at (415) 947-6229 or via e-mail at lrhooper@cmp.com.

Yes, I know there is a story to tell in managed services. I know some businesspeople who are making good money in managed services. But lately, I have been questioning the level of zeal with which we here on the CRN editorial team have embraced managed services as the savior of the VAR channel.

It was no surprise to me that managed services was on the tip of everybody's tongue in St. Louis last week at XChange '06, a gathering of solution providers held by CRN parent company CMP Technology. And it wasn't too much of a surprise when, in one of the earlier sessions at the conference, the audience chose managed services as the subject they wanted to hear discussed. It wasn't even a surprise to me that one of the last concurrent sessions was on the subject of managed services. But it was a surprise to me when I couldn't find a seat in that room. After four days, these solution providers wanted more on managed services? Was there more to be said?

Indeed there was. In a spirited standing-room-only session, Ryan Morris of the Institute for Partner Education & Development, a sister group of CRN, said the managed services business could very well turn out to be the savior of the VAR channel, and thus, everything it is hyped to be. And he had the data to prove it. His main proof point: Customers want managed services.

But notice that he said "could," not "would." It's not a lock just yet. Only one thing stands in the way. Care to venture a guess as to what? Yep. The VAR channel.

VARs are on the cusp of a massive change in how they do business. They have the opportunity to grow exponentially, but they have to move beyond a project and price mentality to succeed, Morris said. If VARs embrace managed services and hit the field beating each other up on price, they will drive themselves out of business and take the managed services model down with them, he said.

In other words, for managed services providers to succeed, VARs need to fully embrace the value model and charge what their services are truly worth. How can I argue with that?

Are managed services in your future? Let me know what you think at (415) 947-6229 or via e-mail at lrhooper@cmp.com.