MSPs To Vendors: It's ROI Time

Zenith has heard this complaint more than once and will now spend the money to address it, Saraf said. In January, it will cut the ribbon on a new help desk in Pittsburgh that will be staffed with native English-speaking support technicians and will cost MSPs who opt to use it only $16 per PC per month, Saraf said. "We knew it was a necessity," he said. The price tag for Zenith's new NOC: More than $250,000.

Ottawa-based N-able had a very profitable 2006, according to CEO Gavin Garbutt. Growth trends for 2006 for privately held N-able were record-setting; a healthy number of new partners came on board, taking the overall total to 1,100; and that partner base kept on buying bunches of additional licenses all year long, Garbutt said. But like its competitors, N-able had its share of unhappy partners. Recognizing this, N-able next month plans to go live with a project it has dedicated more than 60 employees to and invested six months in developing—the N-able Velocity Partner Center, he said.

The Velocity Partner Center will be aligned with N-able's flagship Velocity MSP products and give partners a way to find the information they need fast, fix technical problems quickly and better develop their business models, Garbutt said. A Partner Center for MSPs running N-able's hosted Momentum MSP platform already has been rolled out to a limited number of partners, and it goes into general availability within weeks, he said.

N-able and other MSP platform vendors had to spend the money now to dramatically improve support because the exhilaration of 2006 that made many partners so forgiving has run its course, said Brock McFarlane, president of Weston Technology Solutions, a Bend, Ore., MSP that runs N-able to manage customers' servers and Kaseya for the PCs.

"It's the traditional bell curve. First, you have a hot technology and everybody is talking about it, then it starts to level out in terms of what you can get away with as far as selling a product that may or may not fit a customer's needs fully," McFarlane said. "At that point, you need to differentiate yourself some other way than just saying, 'Hey, we're superior, we have a great tool, and here are the selling features of it. Take it or leave it.'"

Stubbornly maintaining such an inflexible posture is exactly what SilverBack did in 2006. Then in November, a deal to deliver a less expensive, hosted version of its product through distributor Bell Micro, San Jose, Calif., moved SilverBack to significantly lower its posh $76,500 price tag, said Jonathan Wolf, vice president of product marketing at SilverBack, Billerica, Mass.

The introduction of seven new pricing tiers—which start as low as $2,999—meant forking over money to expand its partner and technical support to accommodate more types of partners, Wolf said. In addition, SilverBack plans to return some of its healthy 2006 profits to partners through new technical and educational training courses, he said.

Also in the giving mood is Kaseya, which plans to spend more than $1 million on a new and uncharacteristic Managed Services Transformation program in 2007, said Dan Shapiro, vice president of marketing at Kaseya, San Francisco.

The program marks a significant departure from what many MSPs have called Kaseya's "Field of Dreams" approach. Kaseya has been a point-product vendor to the bone and not big on promoting the post-sale development of its partners into MSPs. But the new program aims to change that by delivering to partners MSP practice consulting, sales techniques and pricing models, Shapiro said.

LPI CEO Sandiford said sales of its Managed Workplace MSP platform climbed "exponentially" all through 2006. But many LPI partners were given a rough ride, particularly after LPI released version 5.0 of its software in April—an upgrade that for some partners created as many headaches as it relieved.

As 2007 begins, there is "very little tolerance" for substandard products and poor vendor support, Sandiford said. So LPI has directed one-third of its development team to do nothing but improve existing feature sets and technical support. Another $100,000 or so is being poured into improving LPI's partner portal and help desk, he said, adding, "We are now looking at everything that a partner does with us and saying, 'How can we make this simpler? How can we make it better?' "

Distribution Of Wealth
Partner satisfaction is paramount to LPI going into 2007 because this year it begins to indirectly compete against a version of its own product that will be offered by Ingram Micro as a hosted Software as a Service.

Ingram Micro's Seismic Platform is LPI software, and the distributor's plan is to take the burden of infrastructure support and licensing off MSPs' shoulders, said Justin Crotty, vice president of services for Ingram's North American Services Division, Santa Ana, Calif. "We have really put a lot of dollars into helping our VARs understand where they are going to skin their knees [as MSPs] and try and help them avoid some of that pain that a lot of the early adopters went through as they accelerated down this path," Crotty said.