Opsware Offers Opportunities To The Channel

Loudcloud

After selling its managed hosting business to EDS last week, Loudcloud became an IT operations management software vendor and is developing a channel strategy.

Now called Opsware, the software initially will be sold direct, said Andreessen, but over time he sees the channel having a significant role as a sales and implementation arm for Opsware.

"Opsware is structurally like the early versions of Siebel or SAP, so the good news is that there are tremendous channel opportunities because a lot of customization is needed as it rolls out," said Andreessen. "The bad news is new software is pretty complex. The customers and the market need to be educated by the vendor in order to create enough demand, so initially we will have the primary sales and fulfillment role."

For example, Opsware will seek partnerships with systems integrators and boutique high-end VARs with network management expertise, Andreessen said.

"It will be more SAP- and Siebel-type systems integrators, but also folks who feel comfortable implementing things like [Hewlett-Packard's OpenView or [Computer Associates International's Unicenter, " he said.

Service providers are reacting favorably to Loudcloud's move to shed its MSP business. Keng Lim, president and CEO of Escalate, which develops supply chain management software and offers it as both a licensed product and as a hosted service, said he predicts other companies will follow suit.

"More companies are going to diverge to either be a service provider only or software vendor only, " he said. "With Loudcloud their specialty really is in developing software. It's their background."

Escalate is following a similar path. The company currently serves as its customers' hosting provider, but with future customers it is opting to outsource hosting to other ASPs and hosting companies.

The company is in discussion with three large systems integrators, Lim said.

Others feel that Loudcloud shed its MSP business because the company found hosting too costly and difficult to manage.

"As a new company wishing to go public, Loudcloud did a very smart thing by coming out as a hosting provider because hosting is a quick way to achieve top-line growth. But it's much harder to manage costs if you don't own a tier-one network," said Greg Quinn, vice president of sales and strategic alliances at Conxion, a Santa Clara, Calif.-based managed hosting provider that owns its own network.