MSP Platform Price War Rages
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. Mike Cullen, vice president of sales at N-able, said the vendor has in the past month changed its pricing structure from a fixed fee to a cost based on the number of customers an MSP has.
Adding billable features at no cost is another way Cittio is increasing its price pressure on the market, said Sean McTaggart, president of TriLine Solutions, Holland, Mich. McTaggart said Cittio told him to expect new customer-based reporting features in a free upgrade expected in a few months.
“I’m increasingly able to charge for things I’m not having to pay for,” said McTaggart, who chose Cittio over LPI and N-able.
MSP platform vendors Kaseya and SilverBack Technologies also also are staying flexible. Jim Alves, executive vice president of marketing at Kaseya, said the vendor’s pricing practices have not changed in two years. But, he conceded, exceptions are made.
An MSP currently weighing a jump from LPI to Kaseya said Kaseya’s sales staff told him they could get the price of Kaseya’s product below that of LPI’s. Also, making exceptions to the fixed per-node license SKUs that Kaseya has established could be done, this MSP said.
Al Gossett, president of Digital-DNS, an MSP in Greensville, S.C., said SilverBack also is willing to make exceptions to buying node licenses in increments less than the established SKUs.
Jim Hare, vice president of worldwide sales at SilverBack, Billerica, Mass., said that although the company does have a fixed SKU policy, exceptions to rules are made when needed to close sales.