N-Able: Grab Those Managed Service Seats Before Dell

N-Able Technologies held its quarterly partner meeting last week, attracting 300 MSPs to Chicago to hear the latest from the company. N-Able had only expected 250 partners, but scrambled to find room for 50 walk-ins. It's a sure sign that managed services is becoming more important in the marketplace, said Gavin Garbutt, CEO of N-Able. Garbutt spoke this week with CMP Channel about the event and what's going on in managed services, including the impact of Dell's entry into the space. The following are excerpts from the conversation:

CMP Channel: What was the vibe at your Chicago event?

The state of the industry is so different now. What's really interesting is the mentality of the service providers. Before, they were very hesitant, other than with a few core customers whom they really know, to get [a managed service] product into people's hands.

We're really seeing these guys going through major mind shift. Instead of viewing managed service software and the cost of setting up a customer as being prohibitive, they're really embracing the notion. I know it's around the big guys like Dell getting in [to managed services] and they're worried the big guys will come in and eat their lunch.

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So Dell's acquisition of Silverback Technologies is having an effect on the market?

I was at CMPs' TechInnovators XChange show, and there was one of our partners there. The first day, he stopped by our booth and said 'I really have to talk to Gavin. I have to talk to Gavin.' Dell had sent him an e-mail the week before, asking him to join the managed service program. Within that same week, one of his customers got an e-mail forwarded from a customer trying to sell him a service contract. My keynote was around the notion of building a managed services practice.

Now is the opportunity to do the land grab. There are 78 million seats in the U.S., and under 5 percent are in managed service contracts. The space is wide open, but you better do it fast. Dell is starting to market it. Now we've heard from Ingram and Best Buy doing it. Best Buy will resell managed services through Ingram Micro Service Network. Staples will be doing the same thing.

Now that the technology is at mass distribution models, they all want to get basic monitoring at the customer site. It makes total sense. As you know, if you're monitoring the customer, then you have all their asset information, lifecycle information. You're able to do all the break-fix, reports, capacity planning, predictive analysis. At the end of the day, whoever monitors the customers, owns the customers.

Next: A Shifting Market

So this partner was concerned that Dell was trying to recruit him, but also sell to his customer?

This guy was obviously beside himself. What do you do? The [adoption rate for managed services] has been pretty organic up until now, but now there's more fear in there. The big guys are going to start to come in. I don't think they'll take current business away from [MSPs], but if you want some of those other 78 million seats, you need to do it soon.

I think there's going to be a pretty dynamic shift in the market. Before, people were compelled do it for good business reasons. Now, companies will get into managed services because the big guys are getting in. Dell wants to improve their help desk, they want to get all the supplies [business], they want to try to build up services revenue model. You start with incident-based business and grow into contract bases.

When we last talked in August, N-Able had just released its new N-Central 6.5 platform. How is that being accepted?

Well, we won the VAR Business company of the year award for managed services [at TechInnovators XChange]. It's been phenomal. We had 350 partners take up [N-Central 6.5] in the first six weeks. Instead of taking two or three hours to roll out with a new customer, it takes one-sixth of the time. We can show partners here's the value after three months.

What else is new for partners?

We're now helping partners sell in the field. When a partner comes on board, they sign with a partner development specialist to work with you goals and objectives. We help you build your sales and marketing program. We have everything you need, e-mail teasers, PowerPoint, everything. You're fully capable and trained to sell proactive services. We'll do customer events with you and our sales guy come into the market for the event.

As a partner requires, we can help them sell more. We did partner development before, but now we're making make sure we kick off the program in a successful way. We've done a number of events with partners and pretty much if they have 10 people in the room, they close five of them. It's a 50 percent close ratio. It's really good.

What else did you tell partners at the event? On the technology side, with N-Central 6.5 we have 6.6 and 7 in the works right now. We did a product roadmpa right now. On the reporting side, we continue to drive down costs of delivering services. As far as wild, new feature functionality, it never stops. We have 43 engineers working on that, but it's less now about bells and whistles, and more about productivity, profitability.