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MSP Platform Price War Rages

By Dan Neel, CRN
May 26, 2006    3:00 PM ET

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MSP platform vendor LPI Level Platforms once again has lowered the price of its flagship Managed Workplace 5.0 offering. This time, the cut lowers the platform price to $5 per site per month for up to five networked devices, said LPI chief executive Peter Sandiford.

The latest price drop comes after Ottawa-based LPI in February applied significant price pressure on the MSP platform market by dropping its longstanding $60 per month per site subscription model down to $15 per month per site for sites with up to 10 devices, or $25 per site per month for up to 250 devices.

Solution providers said the escalating competition among MSP platform vendors and their increasingly aggressive sales forces has created a buyer’s market for VARs adding managed services.

“This is a great time to get into managed services,” said Steve Plotz, president of Computer Systems of Tampa, Fla. “The winners are the end users and solution providers.” Plotz, however, said he has still not found a vendor that will provide him with a free 30-day trial MSP platform.

MSP platform vendor Cittio, San Francisco, this week fired its own shot in the price war by introducing its Slingshot Kit.

The kit combines its flagship WatchTower product, improved financing options, and a consulting and MSP business development program that can help solution providers lower the financial risk of adjusting their businesses from project-based billing to a fixed rate, long-term recurring revenue model, said Cittio President and CEO Jamie Lerner.

The Cittio MSP business development program in Slingshot Kit is similar to the business transition program that Ottawa-based MSP platform vendor N-able Technologies leads with during every sale, Lerner said.

Slingshot Kit starts, for example, for as low as $10 per node per month for a 100-node license that can be financed out as far as 36 months, Lerner said. A 1,000-node license costs slightly less per node, he said. But the fact that MSP business development is free now with Slingshot Kit is significant, because N-able places such a high premium on its own MSP business development, Lerner said.

However, N-able is not standing still, according to a solution provider who recently negotiated a deal with the vendor.

The N-able sales team cut about $20,000 off the cost of their MSP platform when the solution provider chose not to take N-able’s business development program with the product, the VAR said.

The solution provider, who was making a decision between N-able, LPI and others, said N-able came back with a price that equaled a cost to the MSP of about $20 per site across 50 or so customers.

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