MSP Infrastructure Gets Flexible

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Hosted MSPs are in, and heavy infrastructures are out. Monolithic managed service infrastructures have proved to be marginally successful, with the exception of large enterprises. VARs are seeing that they can't promote their infrastructures as a service differentiator because customers are not satisfied today with an enterprise license agreement like they were a decade ago. Instead, customers are looking for consumption or usage-based pricing models. ISVs also are recognizing that customers want to buy, install and use IT products differently, and that has led many of them to ask themselves this question: Can my application portfolio accommodate a managed service model?

Companies such as Arsenal Digital Solutions Inc., Cary, N.C., are taking advantage of this market vacuum by providing multitenant stacks--the ability to serve and manage one application to several different MSP customers. Arsenal, which is owned by IBM Corp., has been able to scale its enterprise data protection and storage delivery model down to the SOHO and SMB markets.

"In some ways, we're pulling ISVs into changing their applications to a multitenant stack," said Brian Reagan, Arsenal's executive vice president and CMO.

Right now, Arsenal enables single tenant applications into multitenant services to meet customer demand. But the work is done in-house without ISVs, who are slowly waking up to the fact that they need to move their applications into multitenant stacks and make data more transparent.

Data transparency and virtualization are also shifting the MSP market. MSPs are slowly opening their data pools to provide customers with more visibility into their usage and environments. The data allows customers to do more predictive analysis as well as historical reporting. Virtualization is also shaking up the economics of hosting applications and how applications share and best utilize infrastructures. That changes the way business arrangements are made around service level objectives. The technology is giving MSPs highly scalable systems, so options for penalties around lack of performance and availability can be introduced into service level agreements.

The easiest way to start a MSP practice is to take advantage of a hosted solution. That seems to be the preferred model that distributor Ingram Micro Inc., Santa Ana, Calif., is seeing on the market. Ingram's Seismic program provides the infrastructure so it automatically lowers the cost and the amount of time to get into the market and offer managed services. It also offers a vendor an agnostic managed service business model that's VAR-led. Seismic makes management more scalable because it can offer a greater portfolio of services without duplicating all of the service expenses of older managed services.

"We're pretty confident the model that's going to win is the hosted infrastructure model. At the end of the day, a VAR's ability to market and deliver a solution effectively will win customers," said Justin Crotty, vice president of services, Ingram Micro North America. Crotty added that the MSP market is shifting towards a subscription-based model because VARs can cost-effectively provision and deploy MSP applications quickly.

Customers' level of sophistication has changed dramatically as well. Customers are able to articulate the services they expect from MSPs. Even traditional IT customers have shifted to a more service-based mindset inside their departments. "We see an alignment between the channel partner, the client and MSP vendors," Arsenal's Reagan said.

Kenata, Ont.-based MSP vendor N-able Technologies Inc. agrees. With N-able's Momentum program, VARs don't need any infrastructure to manage networks, and the process is simple. After signing up, VARs receive an e-mail and password and can immediately start their MSP business. Momentum, which uses N-Central OnDemand, is an easy-to-use platform that lets technicians work with lots of templates.

The platform does a lot of automation, so technicians don't have to spend time tweaking and tuning to make a MSP system work with multiple tenants. The N-Central OnDemand is designed for large-scale deployments, and it is also highly scalable and customizable. Technicians have many options available to tweak the product. They can also take advantage of some of the add-on tools, such as N-able's N-compass, to create sophisticated business-oriented reports, or N-able's Remote Environment Management, to manage desktops proactively and create secured networks by standardizing on procedures and devices.