Managed services model ripe for expansion: Kaseya, SolarWinds
Channel companies have an opportunity to broaden their managed services offerings, according to new studies from Kaseya and SolarWinds; more news from the week.
Two studies on the managed services model revealed that a limited number of service provider are building out beyond basic services offerings. That's against a technology landscape where customers increasingly need help with cybersecurity protection and hybrid and multi-cloud management.
Kaseya's 2019 MSP Benchmark Survey, which the IT management software vendor released yesterday, maps out common traits among top-performing managed service providers (MSPs). Kaseya said it gathered data from Kaseya and non-Kaseya customers in the fourth quarter of 2018 and polled more than 800 MSPs worldwide. According to Kaseya, top MSPs are firms with an average annual monthly recurring revenue growth exceeding 20%.
Kaseya said a differentiator of top-tier MSPs from MSPs in general was the ability to offer a broad menu of services. In addition to investing in MSP mainstays like remote monitoring and management, OS patching and antivirus services, the study said top-tier MSPs were investing in areas such as cybersecurity and cloud computing.
Kaseya said 69% of top MSPs offered identity and access management compared to 45% of all MSP respondents; 71% offered cloud services, compared to 52%; and 78% offered client assessments, compared to 60%. Furthermore, more top-tier MSPs offered intrusion detection and response, audit and discovery, and dark web security monitoring.
Top MSPs were also branching out the managed services model with regard to their backup capabilities, with 85% of the companies using more than one backup provider, Kaseya said.
Meanwhile, IT services management vendor SolarWinds MSP, which published its "2018 Trends in North American Managed Services" report last month, also pointed to opportunities for channel firms to grow managed services offerings. The study used data from SolarWinds MSP's benchmarking tool, MSP Pulse, which looks at metrics such as revenue, profit, service selection and growth potential, according to SolarWinds MSP.
The report said the most-offered services for North American MSPs were endpoint management, at 82%; network management, at 79%; server management, at 76%; and backup and recovery, at 76%. Managed security services were offered by about half of respondents.
"The results are indicative of a still-maturing playing field for managed services where solution providers are sticking close to their comfort zones and to their network management roots," the SolarWinds MSP report stated.
MSPs generally had basic security services in place but lacked more advanced services, the report showed. Seventy-nine percent of respondents offered network security, and 79% provided endpoint security. Thirty percent offered application security.
In terms of advanced security services, only 23% provided security assessments or security information and event management, respectively, while 12% offered security operations center services.
Other notable findings on the managed services model included the following:
- Kaseya said that more than one third the study's top-tier MSPs have fewer than 10 employees.
- SolarWinds MSP found that North American channel partners on average derive 28% of gross revenue from managed services. For the North American firms that identify primarily as MSPs, gross revenue from managed services was less than half their business -- 43%.
- SolarWinds pointed to a customer retention problem among partners. On a monthly basis, North American IT businesses typically gain four new customers and lose three. The average North American channel partner has 51.8 active customers.
- SolarWinds reported that three in four MSPs continue to offer break/fix services.
Survey: ERP success rate hits 67%
The history of ERP implementation reveals a horror show of botched projects and broken budgets, from Hershey's 1999 debacle that tied up Halloween candy order processing to post-2000 headaches at clients as diverse as the Defense Department, Hewlett-Packard and Waste Management.
Over the years, ERP deployments have come to be associated with high failure rates. But a survey released this week from Ultra Consultants Inc. aims to change that perception. The company hired market researcher Mint Jutras to survey more than 300 North American manufacturers and distributors on their ERP implementations. Among the findings: A bit more than two-thirds of the respondents said their projects made the grade.
"These projects really are being successful," said Jeff Carr, founder and CEO at Ultra Consultants, an enterprise solution consulting firm based in Chicago.
Sixty-seven percent of the respondents said their ERP deployments were successful or very successful. Only one respondent cited a failed project, while 2% of the survey takers described their ERP efforts as "not very successful."
ERP channel partners take note: Technology doesn't play the key role in ERP success, according to the survey.
Jeff Carrfounder and CEO, Ultra Consultants
"These projects do not succeed or fail based on the software," Carr explained. "Nobody mentioned the software as being a hurdle or inhibitor or problem. What they mentioned was the people or the process or how well they did in managing those [factors]."
The Ultra Consultants survey ranked the leading ERP implementation success factors as top management support, good organizational change management, good ERP assessment and due diligence, and good testing and quality management.
Another perception the survey seeks to challenge is the notion of the interminable ERP project. Carr said he was surprised to see the speed with which a sizeable percentage of respondents were able to complete ERP rollouts. The survey revealed 44% of the respondents expected to go live with their deployments in less than six months. Within that group, 40% of respondents said their projects actually took less than three months, including 14% that said the job got done in less than six weeks.
Carr attributed the faster pace to aggressive deployment approaches featuring tight schedules. He said some organizations must act quickly, citing the example of a business unit that spun out of a larger parent company and needed to rapidly install an ERP system.
Carr also suggested cloud ERP systems may have contributed to faster deployments, although the survey didn't specifically investigate cloud versus on-premises ERP implementation. He said cloud ERP eliminates "a lot of the heavy lifting" regarding information architecture and infrastructure.
"If we can eliminate that, we can go faster," he said.
- Tech Data unveiled a new global cloud services suite for partners. The Cloud Solutions Factory's offerings include products for core infrastructure, application innovation and data protection, the distributor said. Microsoft, AWS, Red Hat and NetApp are among the vendors currently represented in portfolio.
- Arctic Wolf Networks Inc., a security operations center-as-a-service company in Sunnyvale, Calif., has inked a distribution agreement with Ingram Micro Inc. Under the arrangement, Ingram Micro will provide Arctic Wolf's portfolio of services and products to U.S. channel partners.
- Kenna Security, which provides a vulnerability management platform, has updated its Kenna Security Partner Program. The program includes marketing tools, deal registration, technical support and training.
- Data management vendor Commvault named Anthony Faustini as its vice president of sales for the Americas. Faustini joined Commvault from Cisco, where he served as global sales leader for the networking and tetration portfolio.
- Accenture Applied Intelligence, the AI offerings arm of Accenture Digital, has appointed Athina Kanioura as the organization's chief analytics officer and global lead.
- Axcient, a data protection vendor that targets MSPs, appointed David Bennett as its CEO. Bennett previously served as chief revenue officer at Webroot.
- DataBank, a data center, connectivity and managed services provider in Dallas, appointed William Pratt as vice president of channel and managed services sales.
Market Share is a news roundup published every Friday.