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 Channel Futures

Business Models


Arrow Fusion: Distributor’s Managed Services Strategy Comes Into Focus

  • Written by Joe Panettieri 1
  • April 21, 2011

Distributors continue to ramp up their managed services strategies. The latest example: Arrow ECS (Enterprise Computing Solutions) is building out an Arrow Fusion Services strategy that includes professional services, consulting, cloud services, education and support. Within the cloud initiative, Arrow has introduced selected managed services for VARs and MSPs. Lee Fawsett, VP of Fusion Services, shared some updates with me yesterday.

I met Fawsett during an Arrow ECS open house near Atlanta, Ga., where the distributor showcased a new lab that VARs and MSPs can leverage for testing and proof-of-concept work. Most of my conversation with Fawsett focused on cloud computing, with a touch of managed services mixed in. So far, the Arrow Fusion Cloud Services include:

  • Remote monitoring and IT as a service, including managed services. I suspect NetEnrich is assisting in this area, since Arrow and NetEnrich have a business relationship.
  • Security as a Service and Software as a Service: Fawcett described how Arrow plans to line up vertical market SaaS applications for VARs. It sounds like the SaaS applications will be hosted in Terremark data centers.
  • Infrastructure as a Service: Including public cloud services and managed server options.
  • Business Continuity and Disaster Recovery: Including offsite backup and mirror imaging to safeguard businesses during a disaster.

It’s safe to expect Arrow to add more Fusion Cloud Services in the next few months. Among the potential moves I’m watching: During the Arrow open house yesterday, some Arrow presenters described a relationship with Verio — the web hosting specialist.

Competition Looms

Still, managed services seems to be a small piece of the broader Fusion Cloud Services strategy. In stark contrast:

  • The Ingram Micro Seismic team has helped to transform more than 1,000 VARs into MSPs… though Ingram has also spent more time emphasizing cloud computing in recent months — pointing partners to the Ingram Micro Cloud site, which launched around November 2010.
  • Synnex recently expanded its managed services push, hosting Level Platforms‘ remote monitoring and management (RMM) software for VARs and MSPs. Synnex also entered managed services relationships with Axcient and Intronis (cloud storage), Reflexion (anti-spam and email security) and Symantec.

Generally speaking, I think transforming VARs into MSPs has been a challenging task for most distributors. In addition to identifying best-of-breed software tools for aspiring MSPs, distributors have also worked to educate VARs on recurring revenue business models and MSP sales compensation plans. Cloud computing may accelerate the transition, however, since end-customers are starting to demand cloud services — forcing VARs and MSPs to either develop recurring revenue models or bow to competition.

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Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Business Models Cloud MSP 501 Technologies

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2 comments

  1. Avatar Mitchell Cipriano April 22, 2011 @ 8:01 pm
    Reply

    Joe:

    I agree with your assessment, it has been difficult for the distributors to force transformation across their broad VAR base. Where the have been most effective is in enabling transition for those VARs that know they want to get into services, but don’t quite know how and don’t quite have the time to do all the research. Programs like Ingram Seismic and Arrow Fusion are perfect for these VARs. It gives them a vetted portfolio of vendors and all the resources they need to get going.

    The brass ring for these distributors is to learn how to leverage their core sales team to effectively reach their larger VAR base with the benefits of launching a services business and the unique value presented in their particular portfolios and subsequently drive a wave of transformation. The first distributor who effectively figures this out and executes will dominate the next phase in distribution.

    Mitchell Cipriano
    Demand by Design
    http://www.demandbydesign.com

  2. Avatar Joe Panettieri April 27, 2011 @ 1:15 am
    Reply

    Mitchell,

    The big question is scale. Some of the distributors generate $20 billion or more from traditional hardware and software. Curious to see if the cloud and managed services efforts can scale to those heights… Or maybe the cloud/managed services efforts simply allows distributors to create more product/service stickiness with partners..
    -jp

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