New initiative allows managing, monitoring of SaaS offerings
LPI Level Platforms launched the first phase of its new Managed Cloud Services capability that extends IT manageability beyond local infrastructure to include hosted SaaS applications.
LPI's Certified Managed Cloud Services initially will include support for Microsoft's Business Productivity Online Suite, featuring Microsoft Exchange Online, Microsoft SharePoint Online and Microsoft Office Live Meeting as well as groupSPARK's private-label Exchange hosting services.
The initiative is Ottawa-based LPI's first foray into helping MSPs manage and monitor cloud-based applications and should help them evolve their business to where end users want to go, said Peter Sandiford, CEO of LPI.
"Managed services has been since the beginning about managing local infrastructure. But what's now going to the cloud is getting bigger and bigger: hosted Exchange, NetSuite, accounting apps," Sandiford said. "As the cloud develops hosted apps, if you're only managing PCs and servers and local network and routers, can you really be the trusted IT adviser if your customers are getting sales pitches from SaaS providers to take some of that stuff?"
Sandiford said a lot of MSPs have been reluctant to adopt a SaaS-based model because they incorrectly perceive it as a decreasing revenue stream. For example, if an MSP is managing a local Exchange server for $250 month, that money disappears if the customer moves that server into the cloud. That doesn't have to be the case, Sandiford said.
"That [logic] also applies to Great Plains or Sage or something else on a server. Solution providers particularly aren't big advocates of SaaS," Sandiford said. "We try to say this is a tide that's coming in. Every survey I see shows service providers know it's coming, but they grit their teeth on what to do about it. The answer is embrace it. Acknowledge that cloud computing is an extension of the total environment you need to manage. Stop thinking about managing a PC for $50 a month and a server for $250 a month."
About 21 percent of SMBs now use cloud services, according to research firm AMI Partners. Meanwhile, the "2009 Microsoft Market Insight Report" indicates a 20 percent growth rate in SMB customers' use of SaaS in 2009.
With LPI's Managed Cloud Services, MSPs can now monitor and manage both local infrastructure and a customer's cloud-based services from one Web-based console, which gives them a complete view of the entire computing environment.
LPI created a whole set of policy-based monitoring and managing rules that gather data from the cloud applications into the same dashboard as locally managed IT devices, Sandiford said. "The MSP can see hosted Exchange and say, 'Here's the issue with that and here's how we drill into that and determine if there's a problem.' End users just want to know if e-mail is working or it's not. An MSP that is proactive can see if a poor response is coming from a hosted provider, or if it's a local e-mail problem that can be a concern. They can get alerts on that," Sandiford said.
The more information an MSP can provide to a client regarding the entire IT envirionment, the less finger-pointing that can occur if there are multiple companies touching that end user, Sandiford said. "The MSP becomes the single point of responsibility. The ability to deliver the hosted applications in the context of an overall IT management proposition should encourage them to become a channel in fact for SaaS providers," he said. "I think it will have a significant impact on the customer relationships of an MSP and create an open channel to SaaS providers."
MSPs can also now begin looking at offering hosted applications themselves through third-party hosting providers such as groupSPARK, which offers private-labeled hosted Exchange, he said. "The billing goes through the MSP. The added benefit now is the MSP can actually manage that whole environment," Sandiford said.
It's possible that hosted SaaS providers could also move toward a managed services model themselves, but Sandiford believes MSPs have a leg up because they are more embedded with the end user. "Right now, [hosted providers] don't know what the customer experience is. They monitor and manage data centers, but the MSP is managing the end customer experience," he said.
Solution providers that don't look to expand into offering cloud-based management could be risking their customer relationships, Sandiford said.
"The key thing is the relevance. If you're only managing PCs and servers, a couple years ago that was 100 percent of the IT budget. A year from now it's 70 percent. Thirty percent is cloud apps and that calls into question the MSP model and the relevance of the whole trusted adviser model. The MSP needs to see the entire IT environment," he said.
LPI's Managed Cloud Services are available through LPI and also through Ingram Micro's Seismic platform. "This represents a strong move from local infrastructure management to address the coming challenges of cloud computing and allow solution providers to extend their value and drive higher margins," said Justin Crotty, vice president of services at Ingram Micro.