MSP Alliance Bobs For Bad Apples In The MSP Space

In response to concerns that some start-up MSPs are misrepresenting themselves and their capabilities, the MSP Alliance this week resolved to increase public awareness of its consumer-protection efforts and improve its vetting process for membership and accreditation, said Celia Weaver, vice president of the industry group.

The group's board held an emergency session Friday after the association received some "disturbing" tip-offs about a pair of MSPs and then encountered a "red flag" in its investigation of a separate application for membership early last week.

Weaver also cited the indictment of Compulinx CEO Terence Chalk on conspiracy and credit-card fraud charges last November as motivation for the MSP Alliance to move forward on several measures.

"I got two calls yesterday about two companies that were pretty disturbing. There were some allegations that I can't get into that we'll be investigating," Weaver said.

"I just wonder how much of this is going on out there. I'm just afraid it's the tip of the iceberg," she said.

The MSP Alliance plans to set up a 24-hour hotline for the public to call to check if a service provider is accredited by alliance, Weaver said.

Other resolutions from the meeting included adding questions about employee background checks to the MSP Alliance's accreditation exam; a public list on the MSP Alliance Web site of "defrocked and ousted MSP Alliance members or companies of concern"; and an "aggressive campaign" to educate MSP clients to ask their service providers if they are accredited by the association and if they do background checks on any staff member who touches the client network.

Meanwhile, Weaver said, the MSP Alliance would be announcing an agreement with a major insurance company at the association's spring conference in Orlando, Fla., on May 10 and 11.

"[The insurance company] will be recommending to its clients that they go with an accredited MSP," she said.

The emergency session was called after Weaver's suspicions were raised by a start-up applicant that listed several big-name technology partners on the demo site it provided the MSP Alliance for review.

The MSP, an Illinois-based start-up that CRN investigated independently, listed partnerships with prominent companies such as ConnectWise and Kaseya.

Both companies told Weaver they had never had any business dealings with either the MSP or the partner in the company that had submitted the application. ConnectWise and Kaseya representatives contacted by CRN confirmed that story.

Further investigation by the MSP Alliance revealed that the partner in question was facing trial in Illinois for allegedly embezzling more than $100,000 from a former employer, as well as a civil suit by the plaintiff in the criminal case.

MSP Alliance board member Mike Backers said the past week's events had reaffirmed the association's concerns about the potential for unethical practices by companies billing themselves to clients as MSPs without any oversight by peers.

"Since probably 1998 or 1999, Fortune 500 companies began to use the Internet as a business medium. Now they say they're ready to use an MSP. And now these [questionable] folks are coming out of the woodwork, and we've got to stem the tide," said Backers, the president and CEO of Altoria, a Cincinnati-based MSP.

"We need to make it a profession -- and not just a guy with a Web site and a closet full of servers," he said.

But Backers added that it wouldn't be fair to automatically assume maliciousness on the part of start-ups or smaller MSPs.

"It really comes down to, not that a particular individual is doing anything shady, [but] it's pressure in the industry from vendors to make deals," he explained. "So are these folks bound by any ethical code to be truthful?"

A membership with the MSP Alliance like the one the Illinois-based start-up was applying for doesn't confer any official stamp of approval by the association. That comes with an MSP's successful graduation from the alliance's managed-services accreditation program (MSAP), which entails a thorough vetting process of the candidate company that includes site visits to the company's network operations center.

Weaver said that suspicion about the start-up's partner list prompted the alliance to investigate the applicant and his company.

"At first, he said he was a start-up, so I was surprised he had so many partners," Weaver said. "That was a red flag."

When asked last week about the list of "Technology Partners" on the Web site, the applicant told CRN, "That's not actually a production Web site yet. It's in development."

Shortly after being contacted by CRN, the Web site was taken down from public view.