MSP Software Providers Take Their Messages to VARs

Eager to unlock new revenue opportunities, MSP software providers are starting to move beyond traditional “recurring revenue” messages in the core managed services market. The goal is to get traditional VARs and resellers using remote management tools and automation systems — even if those VARs don’t switch to recurring revenue business models. Here are the details.

The trend apparently began around October 2009, when N-able introduced a freemium software strategy. The concept was simple but effective:

The initial freemium move included free endpoint security licenses for N-able’s channel partners, but you can bet N-able CEO Gavin Garbutt is planning additional freemium moves. In theory, the N-able strategy will allow VARs and their end-customers to sample monitoring services that can be free or paid, depending on the VAR’s discretion.

Meanwhile, ConnectWise — which specializes in professional services automation (PSA) software — is taking steps to ensure VARs realize ConnectWise appeals to the entire IT Nation (ConnectWise’s term for resellers, VARs, solutions providers and MSPs). The company’s software serves as a CRM system of sorts, helping VARs and MSPs to track staff utilization rates, marketing programs, customer service ticks, and other business automation steps for both project work and managed services.

Building on that strategy, the ConnectWise Capital arm has invested in CharTec, a hardware as a service (HaaS) specialist that potentially appeals to VARs and MSPs alike. Instead of struggling with slim hardware margins and direct competition from Dell, CharTec advocates a recurring revenue model that allows VARs to promote hardware for a flat monthly fee to end-customers.

Also in Q1, Kaseya launched the Kaseya 2 platform — an automation system that scales from entry-level SaaS monitoring tools to enterprise-class management solutions, Kaseya claims. The company has lined up a range of distributors and SaaS partners to promote the Kaseya 2 offerings into small, midsize and large channel partners.

Most recently, Autotask (a ConnectWise rival) has acquired VARStreet, an online service that allows VARs to procure hardware and software from a range of distributors. Several hundred VARs leverage VARStreet, Autotask says. And going forward, it’s safe to expect Autotask to deliver a single dashboard that allows VARs and MSPs to track products (VARStreet) and services (Autotask) as they’re delivered to end-customers. Stay tuned for potential updates at the Autotask Community Live conference (April 18-20, Miami).

MSP Reality Check

Meanwhile, the core managed services market seemed to enjoy healthy growth in Q1 2010, according to recent anecdotes from Autotask CEO Bob Godgart and N-able’s Garbutt.

Going forward, those MSP software providers — and others — seem to casting even wider nets across the IT channel.

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