MSPs Worry As Dell Enters Market With SilverBack Deal


In the wake of Dell's bombshell announcement that it plans to buy MSP platform vendor SilverBack Technologies, managed service provider executives are worried about how Dell's plans will unfold.

A chief question on the minds of many MSP execs is whether Dell will focus on selling managed services through the channel or focus its efforts on selling managed services direct to end users. The answer to that question will impact not only MSPs that use the SilverBack platform but the entire managed services market.

Silverback, for its part, maintains that Dell will continue to support the channel model.

"Dell is committed to building a channel strategy around services, which is why they acquired SilverBack. Clearly, we will now have significantly more resources to enhance our technology, channel support, and end user demand for our channel," said SilverBack Technologies CEO Dan Phillips, in an e-mail.

Still, solution providers are taking a wait-and-see approach, as Dell has not historically been known for its channel-friendliness.

"Dell doesn't fit the model at SilverBack, which is strictly partner-driven, but I'm being told that this is one of the reasons Dell is acquiring SilverBack and if that's the case it will be fine," said one SilverBack MSP, who requested anonymity. "Every partner out there has concerns now that SilverBack is Dell, and most of them will take a wait-and-see approach and others like us already anticipated something would happen one day and have plans in place. It's just a piece of software we use. We have other options in place and we can go to another vendor if we need to. But we'll have to wait and see, the verdict is still out."

Still, for other SilverBack MSPs, the time and investment they've poured into the SilverBack platform could prove a large deterrent to moving to another provider, leaving them with little choice but to work with Dell.

"Once you've gotten into a tool, it's a huge investment in time and money. Can you switch? Yes. Most of them allow scripting to the point where you can usually remove agents from previous products off machines, but it's very painful to switch and it's a huge investment," said Jeffrey Sherman, president, Warever Computing, an MSP based in Los Angeles. "You have to teach your technicians to use new tools, set up the monitoring, which is time-consuming, and most MSPs have spent tens of thousands of dollars on a platform."

Sherman predicts Dell will focus on selling managed services as an MSP.

"Why on earth would a company like Dell buy a company like SilverBack unless they plan on using it themselves as an MSP?" Sherman asked. "Mark my words: Dell is going to try to become an MSP so they can manage the systems they're selling," said Sherman.

"The big problem, though, is going to be for everyone who's trying to run an MSP business because suddenly you're the mom-and-pop shop and a Wal-Mart is opening up down the street," Sherman added. "We all know what happens to the mom-and-pop shops whenever a Wal-Mart opens up nearby."

Another MSP executive wondered whether the deal would backfire on Dell's efforts to expand in the channel.

"I'm not sure that if Dell's goal is to sell more with the channel that this is the way to do it," said Oli Thordarson, CEO of MSP Alvaka Networks. "This could be channel kryptonite."

A lot of professional services and managed services firms were comfortable working with Dell and recommending Dell products because Dell didn't compete with them in the services space, Thordarson added. "But now with the purchase of SilverBack, Dell might have alienated one big part of the channel where they were getting cooperation."