What's Hot -- And What's Not -- In Managed Services

Economic concerns continue in the US, but some clear IT spending trends are beginning to surface. If you look at recent financial results from networking companies, PC companies, software specialists and service providers, you can get a better feel for how to shape your managed services practice for the rest of 2008.

Sector: Networking

The Upshot: Networking companies aren’t so hot. Nortel is struggling and even the mighty Cisco has expressed concerns about IT spending in selected markets. MSPmentor recommendations: Go deep in hot networking segments rather than broad. Check out Cisco’s intuitive “price per user per day” strategy, which could help you shape your managed services pitch to customers. Also, begin to explore how open source may impact network managed services. Digium’s latest quality guarantee to partners could help to accelerate demand for Asterisk, an open source IP telephony platform that’s gaining popularity in the managed services space. Also, begin to investigate how you can optimize specific applications for better network performance. F5 Networks, in particular, is attracting attention in that area.

Sector: Software as a Service

The Upshot: Salesforce.com just had a blowout quarter, some major enterprises are beginning to embrace Google Apps (an online software suite) for daily applications, and some pundits say SaaS is immune to an economic slowdown. We don’t think that’s the case, but we do believe SaaS continue to deliver new opportunities. MSPmentor recommendations: Start to explore how the SaaS and managed services sectors are converging. Level Platforms CEO Peter Sandiford provided some perspective in this guest blog entry.

Sector: Traditional Software

The Upshot: Skeptics like SugarCRM CEO Johnathan Roberts will tell you traditional software is dead, and open source is the way to go. But recent financials from Microsoft suggest otherwise. MSPmentor recommendations: Explore how traditional applications are moving into SaaS settings. One prime example is Microsoft Dynamics, which plenty of VARs are starting to host for customers.

Sector: Storage

The Upshot: Big, established technology companies — like EMC and Symantec — are moving into the storage-as-a-service market. This is a clear signal that storage as a service has reached critical mass, and should now be a basic offering in every MSP’s toolkit. MSPmentor recommendations: Get sophisticated. Push beyond backup and restore to focus on contingency planning and disaster recovery services. And keep your mind open as nimble storage specialists introduce managed storage partner programs. Vembu, for one, comes to mind. Also, check out third-party storage services that you can plug into. Amazon.com’s Simple Storage Service is turning some heads.

Sector: Security

The Upshot: Continues to be a hot sell, but you need to push beyond traditional anti-virus, anti-spyware solutions. MSPmentor recommendations: Read up on PCI compliance. Much like Sarbanes-Oxley a few years ago, PCI is the hot compliance topic of today. Looking ahead, many customers will insist that their MSPs offer PCI-compliant services. Here’s some more background on PCI for MSPs.

Sector: Open Source

The Upshot: Even long-struggling Novell, provider of SuSE Linux, is now raising its revenue estimates for 2008. But don’t limit your open source thoughts to Linux. MSPmentor recommendations: Begin to understand how open source is shaping managed security services (example partner: Untangle), managed VoIP, and hosted databases and hosted applications like SugarCRM.

Ultimately, MSPs need to focus on micro-economic opportunities — deep vertical niches — rather than the broader US economy.