Welcome to SMBITPros - make sure to sign up for our RSS feed!

This was the interview I was going to do with Dell on their managed services program. Mike’s post reminded me that they have gone very quiet lately and I believe don’t really want to answer these type of questions (I am sure i am offending someone with this statement).

Anyway, judge for yourself.

JC

Big picture

1.       Describe dell three years from now in terms of your product and service mix?

2.       How far do you see your managed services offering extending into a client? Do you envision managing the entire IT spend of a client or do you envision doing the management and monitoring and having partners do the rest?

3.       How do you protect your product revenue while rolling out service offerings such as managed services?

Partner strategy

1.       I understand the pitch you have gone to market with telling providers they can become a Dell partner and register deals to protect their managed services clients but where does that leave current product partners who are not ready to become Dell managed services partners?

2.       How can you convince a partner that has 4 or 5 million in revenue and perhaps already has a small managed service practice established to continue selling your product, or do you ultimately care?

3.       How do you plan on competing at the local level, I sat in a room of service providers last week that were certain that Dell will never be able to provide the high touch service they provide their customers, how would you respond to that?

Future plans

1.       We have seen how Silverback and Everdream are going to be utilized in your managed services offering what about MessageOne and Equalogic? Do you envision Dell offering these solutions from the cloud in a SaaS model?

2.       What can you tell us about what we should expect next from Dell’s managed services program?

We are only a few weeks away from the release of Microsoft’s Business Productivity Online Suite (BPOS) if Microsoft manages to stay on track with their release date. The service which has an odd name in my mind combines hosted exchange, hosted sharepoint, office live meeting conferencing, office communications server, and the Microsoft online administration center management portal all delivered to your customers on a monthly basis from the cloud.

While is seems the offering will initially be targeted at enterprise clients I foresee it quickly being asked about by our small business clients as Microsoft starts to turn up their marketing engines.

I would suggest as I have suggested in the past that your business needs to be thinking about how to continue to add value to your clients as they begin to use these service or others like them delivered from the cloud. I can assure you the 12% of the year one value and 6% of the ongoing that Microsoft has outlined as their partner commision structure is not enough to build a business. The traditional service fees for installation, upgrades, and ongoing maintenance and management will be wiped making it time to reinvent yourself.

The million dollar question is what does todays IT service business look like five years from now…..

JC

Deskless worker is Microsofts branding for their hosted Exchange and Sharepoint programs in their software + services play.

I have written about Microsoft’s software + service programs in the past and today everyone out there has written something about todays new anouncement. The best two blogs I have found on the subject are listed at the end of this post.

I think the most interesting part of the program is the pricing model built to encourage you and I (the channel) to continue selling their services even though we will lose a large portion of service revenue that comes from installing their products on site for clients. If you take this view on losing revenue rather than adapting your service and offerings to capture new revenue you will end up left in the dust.

I am a big beliver in recurring revenue which they are going to share with us but still believe that smart providers will build value added services on top of implementing these products for clients in order to have continued success in the future. I am not worried about clients going direct to Microsoft and cutting a company like Everon out of the picture because they will just be a piece of the solutions and services I aggregate and provide to my clients. (Mike has written about this move to utility computing and the role of the aggregators in past posts).

The power of being an MSP is owning the relationship, let me say that again, the power of being a MSP is owning the relationship. We all need to focus in on value added service for the small business, such as CTO programs, rather than the focus of turning the screws to install and manage technology.

Our customers demand to know that we have vetted the best vendors out there and are providing them the best strategic investments for their business. Becase we understand their business and are experts in what we do they quickly come to believe we are an indispensable part of their team.

So whether we are building services around Microsoft, Amazon, Google or any of the other large SasS players out there we need to be thinking about what’s next for our business and how we fit into the SaaS picture.

Best posts for catching up on today’s announcements:

Best post I have found for a simple overview of Microsoft’s Deskless worker.

Best post for staying ahead or at least on top of MS news as it is released about this program.

JC

It doesn’t take a rocket scientist to figure out that everything is moving towards a hosted model more so than ever in the past. It also is not the first time that industry experts have predicted this shift would happen and in the past it has always stalled out for one reason or another.

The thing that everyone seems to agree on at this point is that this time around it feels real. It feels like it has an unstoppable momentum as Google docs tries to topple MS office and MS office franticly tries to move to a subscription model to keep up with Google docs.

In a recent yahoo news article Microsoft brass made the statement that over the next five years 50% of exchange mailboxes would move to exchange online.

This is a lot of mailboxes considering they claim that MS exchange will run 210 million corporate email accounts in 2008, growing to 319 million by 2012.

So what does all this mean for you and me? Great question!

I am not sure I have all the answers but for those of you who read the blog regularly you know I have an opinion.

The first question everyone asks me is ‘are we going to start hosting exchange for our customers or setup hosted exchange?’ – my answer is no way. What reason would we have to go after running the hosting infrastructure for these applications? I do believe there is technology right around the corner for providers like Everon to be able to immediately compete with the large infrastructure players without needing to make the capital investment. But why they heck would I want to try to keep up with Microsoft and Co as they add “roughly 10,000 powerful computer servers a month to its data centers.”

The answer is I don’t and I would suggest you don’t either. I am still wondering what companies like Group Spark and others that have build their business on this play are thinking – “I hope MS buys me” is all I can figure.

All that said I would direct you back to an article Mike wrote a few months back where he started to use the word aggregator for companies like you and me. We are not nor will we ever be the large utility companies and I sure as heck don’t want to be the low cost onsite guys so we are left in the middle position between the large utility companies and the customer as the aggregator of services.

So I suggest that we all start thinking about how to wrap premium services (ones we can charge a good penny for) around the low cost services that our customers will be choosing from.

The best example I have seen of this to date are the solution providers wrapping services around Google for business – which at the basic level is free by the way in case you have been living in a cave.

At first glance you would think, I will stay away from those services with my customers because I will never be able to make money providing them a free service. But if you take a closer look there are providers that have wrapped some nice packages around the setup and guidance for small businesses using these services. And ultimately your customers will ask for, no they will demand, these services for their business.

This is exactly what we all need to be thinking about and rolling out to the market. Don’t get left behind. Set yourself up in the aggregator position and survive!

Let me know what you all think, am I crazy? Do you have a different take on the strategic position today’s MSP should be taking in the future?

JC

Is it just me or did you notice that there is nothing about partners providing managed services in there?

Normally I would spend the evening writing about how Dell is going to cause themselves a problem with the channel if they continue down this path but I think our friends at MSP mentor did a great job so I have included part of a post from The VAR Guy along with a link to their site.

Historically The Var Guy and MSP Mentor have remained neutral about Dell’s movements in the market so I have to say it is gratifying that even they are pointing out Dell’s shortcomings with the partner channel.

I am working on getting Dell to write a post clarifying their ideas on how the channel will benefit from the SaaS offerings dell is brining to the market as everyone I have talked to is a little hazy on the benefit, stay tuned….

In the meantime check out that The VAR guy had to say in his post:

“With its acquisition of SilverBack Technologies, Inc., Everdream Corp., ASAP Software Express, Inc. and now MessageOne, Dell is architecting an integrated service delivery platform of SaaS applications THAT WILL ENABLE IT to remotely monitor, maintain, troubleshoot and address the majority of routine IT infrastructure issues that challenge businesses of all sizes. “

The VAR Guy emphasized four key words (”THAT WILL ENABLE IT“) on purpose. As currently worded, the release suggests that the Dell service delivery platform is for Dell alone — and not for partners. With a few simple word tweaks, (”ENABLE DELL AND ITS PARTNERS TO…“), the company could have delivered a far more inclusive message to partners.

You can find the full post here:

http://www.mspmentor.net/2008/04/25/dell-misses-mark-on-messageone-announcement/

JC

OK, so I have to admit that I missed document freedom day but it is incredible to me that there are organizations popping up to support the downfall of MS office and the acceptance of open standard. Now I know this movement has been happening for a long time but document freedom day combined with all of the other cloud computing vendors we have been talking about really drove it home for me! The begging is near, oh wait, was it the beginning or the end? Anyway change is a coming! Get onboard or get left behind.

If you also missed document freedom day you can check it out here:

http://documentfreedom.org/

JC

I’ve been a part of a conversation about the importance (or lack of importance) of certifications in the MSP industry. See the posts at MSPMentor here.

It’s a very important issue, as managed service providers need to look for every edge possible to be successful in competitive sales situations, and they don’t typically have the funds or time to go for every certification available.

So what really matters to clients? I’m sure the responses will vary based on all kinds of factors, but I’ve found that the following are the key variables that clients really focus on when determining which MSP to work with:

1. Perceived understanding of and ability to manage the specific needs of the client
2. Reputation in general and with reference clients
3. SLA’s/proof of service performance
4. Contract terms
5. Price
6. Business background - size of team, years in business, where it is located

The order above isn’t necessarily from most important to least important; that changes for each client.

So does a certification make sense? Does it have an impact? The only situations that I see it potentially having an impact on sales are the following:

• You are an infrastructure-based service provider (hosting, SaaS, etc.) and the clients you are selling to are looking for enterprise-level commitments in terms of uptime, redundancy, etc. A certification about how you have built your infrastructure and how you manage it could provide a feeling of safety for the client.
• You are focused on selling a specific brand and/or product; a certification would demonstrate your expertise.
• You are a small managed service provider that is just getting started; having a certification could reduce some of the sense of risk the client may have about working with a rookie in the marketplace.

Otherwise, I don’t imagine certifications are all that valuable.

That doesn’t mean that training isn’t important. Josh and I have actually considered putting together a training program to serve those looking to succeed as MSPs - we really believe in the value of continuing education. But does getting a certification at the end of the course make a difference in your sales volume? I guess time will tell.

MRC

As Microsoft tries to make their software more available online in their software + service push Google attacks the desktop.

Google has rolled out a limited version of Google docs that is now available offline and synchronizes with your online docs when you next connect.

A bit hokey but getting some serious views is this video of how the new offline function works:

http://www.youtube.com/watch?v=7cyHYEfpRVA

As I sat here waiting for my boated version of work to open, yes I type my blog posts in word, I started thinking to myself – why would I not use Google docs rather than paying to upgrade MS Office?

In my opinion the majority of spreadsheets, word docs, and presentations could be done in Google docs with no compromise. For the 10% of office power users you will probably never make the switch but for the rest of us Google docs offers all sorts of version tracking and collaboration that is not hard to find or use making it a fabulous tool.

If you have not started thinking about value added services to wrap around Google docs and Google sites for your clients you best get in and start playing with them because it soon will be unnecessary to buy office unless they get their online version right.

The one caveat to this is Outlook. The majority of us have built our professional lives around the management features in this tool – but I would rather just buy outlook if necessary than the completed bloated office suite.

 You can read about the ways Google is pushing MS office out on the Google Docs Blog:

http://googledocs.blogspot.com/2008/03/bringing-cloud-with-you.html

JC

Known as SaaS to the market Microsoft has long called their SaaS initiative software + service seemingly as a way to differentiate their offering from Google and the other SaaS providers out there. Call it what you like Microsoft is offering hosted Exchange, hosted Sharepoint, and other hosted applications to the world all while trying not to isolate the channel.

Isolating the channel is a large concern as there are many channel partners out there that are worried about what it means to them to have Microsoft sitting at the direct competition table whit lost price hosted software. I believe the smart providers will find a way to add additional services on top of these applications.

None of this should be a surprise to anyone. Microsoft has been pushing hosted applications since early last year with their Live offerings and it was inevitable for Exchange and SharePoint to follow.

Things are changing for sure, business owners will be able to turn on and off monthly costs for these and other applications the same way we pay more or less each month depending on how much electricity we use at home.

While I Microsoft has tried to tread lightly into this arena in an attempt not to scare us I do believe this initiative was given some urgency when Google unveiled their Google apps premier to the world.

The smart thing to do if you are a service provider is to adjust your service offerings in a way that allows you to provide value to your clients on a higher level. Create new services and put your strategic consulting abilities front and center rather than your ability to install these softwares.

Below are a few highlights of Microsoft’s attempts to ease your fears as well as a link to the full article and Microsoft’s white paper on how to think about their new offerings.

I hope you gain some insight into the shifting market and figure out your next steps. I know I already have my thinking cap on.

JC

Microsoft Online Services provide partners with opportunities to expand reach, grow revenue and increase speed to sales and implementation,” said Chris Capossela, senior vice president of the Information Worker Product Management Group at Microsoft. “By extending our enterprise software offerings as a subscription service, our partners have the ability to develop and deliver new services with little overhead but maximum revenue potential.

Microsoft partners can leverage Microsoft-hosted solutions to speed the deployment of Exchange and Office SharePoint in customer organizations, freeing them to focus on migration, customization, integration, and other services.

http://www.microsoft.com/presspass/features/2008/mar08/03-02Partner.mspx

https://partner.microsoft.com/US/40044198

It has officially been announced and their beta site is up if you want to check it out:

http://www.mosbeta.com/Welcome.aspx

I read a fantastic article by Joe Panettieri on MPS Mentor today, he does a good job staying on top of important MSP happenings, and it does a great job summarizing the long term perspective MSPs should have about this announcement: “Partners that complain about Microsoft entering SaaS market may be short-sighted, MSPmentor believes.”

http://www.mspmentor.net/2008/03/03/microsofts-big-software-as-a-service-move/

While we will be in direct completion with Microsoft in many ways there is still a large role for the trusted advisor sitting between the customer and the big utility providers like Microsoft and other large tools and software providers.

Most small business clients will not want to deal directly with the big software and tools providers. They will be looking for us to aggregate the best in breed services into an easy to digest, purchase, and manage solution for them.

Microsoft also still realizes the power and value of the channel – I know that if I told my top 100 customers Microsoft was no longer needed 98 of them would say “OK you know my business goals and objectives tell me how this new technology help me better accomplish them and let’s get to work.” This is why Microsoft is spending so much time convincing the channel that we can still be partners with them as they change their model.

http://www.microsoft.com/online/partner.mspx

Microsoft is not and will never be the trusted advisor to small businesses. Because of this it is important to keep what Joe said in mind about being short sighted and to develop offerings that allow you to plug in the best in breed SaaS offering on the back end. Ultimately your clients don’t care if it is hosted Sharepoint or some other competitive SaaS solution as long as it is easy to purchase, manage, and use. The challenge will be for Microsoft’s solutions to become the best available – time can only tell if they have a prayer of keeping up with Google and a myriad of other nimble competitors in this arena.

JC