It seems anyone who’s anyone is setting up a managed services business. Touted as a way to lock in customers and secure annuity revenue streams, the managed IT approach is also becoming more attractive to cost-conscious customers looking to control IT spend and use existing assets in a tighter economic climate. At the same time, new methods of delivering applications and infrastructure, such as software-as-a-service (SaaS) and cloud computing, are coming to the fore.
Regional manager for service automation platform vendor Kaseya, Tim Dickinson, caught up with ARN to talk about why the managed services space has become such an opportunity, the increasing popularity of SaaS, and other market trends.
SMEs have been a target market for Kaseya’s managed services offering to date. Do you see the market broadening out this year?
The key thing companies are looking for in a tougher economic climate is cost savings. It’s clear managed services and IT automation is going to provide some of those cost efficiencies. There’s not much difference between what’s called outsourcing in the enterprise, and managed services in the SMB space. People are going to want to do more with less, save money, and work out ways to defer CapEx. It’s a great time for managed services providers because they can deliver all these things. It doesn’t look like the economy is going to get any better anytime soon. Our partners are able to go out and proactively assist customers. They can provide certainty, a fixed price contract, SLAs, the opportunity to save some cost internally. They can also enable customers to defer or extend the lifecycle of existing hardware.
We embrace a downturn. If you’re a break/fix operator in an economic downturn, people stop calling because there’s no agreement between you and that customer. But as a managed services provider [MSP,] you have a fixed income every month, even in a tougher market.
Do you see more resellers exiting the market?
Most definitely. In any downturn, bankruptcies go up. And it’s the people that don’t have successful business models that exit.
One of the things we are seeing in the local market is more consolidation. You see it in the financial markets – the stronger players get bigger and pick up the smaller players who are struggling. We are going to see more of this happening in 2009 as the bigger MSPs start to push forward on their expansion plans.
How many partners has Kaseya signed up?
We have about 250, so it’s cranking along, but it’s still a chip off the iceberg. We also more than doubled staff numbers during 2008. When we kicked things off, it was definitely the smaller companies who signed up, but now we’re seeing tier-two providers come on-board as people become more aware of the product.