SaaS And Managed Services: Friends or Foes?

By Peter Sandiford 2

SaaS (software as a service) and managed services are often mentioned in the same breath as though they were part of some collective goodness, but for many MSPs they have actually been more like mortal enemies.

In fact most MSPs have focused almost exclusively on the bread and butter servers, desktops, networks and applications that reside within the walls of their SMB customers. If SaaS was considered at all it was generally seen as a threat that would hopefully just go away if ignored long enough.

One result is that SaaS vendors have made very little headway in the channel. Selling SaaS has often been viewed by the channel as the equivalent of selling their birthright. With visions of all those shiny servers that have kept them alive through good times and bad for the last 20 years suddenly disappearing off into the cloud.

However, the huge NetSuite IPO (initial public offering) proves that SaaS is not going away. Now even Microsoft’s Small Business Server is being delivered as a hosted service in the cloud. The money is beginning to flow into SMB SaaS and the MSPs need to deal with it. Here’s how.

Rather than watch this unfold from the sidelines, MSPs need to assert their role as trusted IT advisors and embrace SaaS as part of the expanded IT world of today. In fact never have the opportunities been greater to increase your relevance to your customers and make some good money along the way. This is because SaaS only operates in the context of the broader IT environment and introduces as many new problems as it offers business advantages in business process simplification.

Level Platforms was a NetSuite user in the early days and just like everything IT, sometimes it didn’t work. And then the finger pointing would start. “It’s the application”, “it’s the network traffic on the LAN”, “you need more external bandwidth”, “try clearing your temp files on your desktop” and in the end it still didn’t work and most importantly, there was no single point of accountability to fix it.

In order for SaaS to really impact the SMB market it needs managed services. It needs an MSP that is monitoring and managing the entire SMB environment whether that is on premise, hosted in a data center or offered as a pure Web-based application. And when they receive an alert that a SaaS application is not meeting its SLA, they need to be able to work from their central dashboard to diagnose the problem across all the possible areas of potential failure and deliver a solution.

Level Platforms includes full web site monitoring to allow our partners to address this opportunity with big plans to extend this even further in 2008. Many innovative partners are expanding their value to the customer as well as expanding the value of their business by recognizing that SaaS is not only inevitable, it represents the next big opportunity for managed services success.

Note: Peter Sandiford is CEO of Level Platforms. Guest blog entries such as this one are contributed on a monthly basis as part of MSPmentor.net’s Platinum sponsorship.