GFI Software CEO: MSPs Near 10% of Global IT Channel

GFI Software CEO: MSPs Near 10% of Global IT Channel

Managed Services Providers (MSPs) now represent about 10 percent of the global IT channel, estimates GFI Software CEO Walter Scott. How did Scott come up with that figure? How many more MSPs are set to come into the market? And how will GFI Software service those companies? Don't worry. We've got the answers and the insights. Read on.

Here is Scott's math:

  • Scott believes there are about 275,000 channel partners (resellers, VARs, integrators, MSPs, etc.) worldwide, based on figures from multiple IT distributors.
  • By tracking the MSP software supplier market, Scott says there are about 20,000 active MSPs, about 7.3% of today's channel but closing in on 10% really fast.
  • Roughly 6,300 of those MSPs leverage GFI Max and related managed services and cloud software from Scott's company.
For the following reasons, Scott believes the MSP market is poised for even faster growth ahead:
  • Cloud computing: It's far easier for MSPs to set up shop with a growing portfolio of cloud solutions today vs. on-premises licensed software from yesteryear.
  • Solution diversity: Going beyond PC monitoring and management, Scott says MSPs are starting to cross sell and upsell the Max solutions. He's charting a strategy to grow the typical GFI end-customer from 1.2 GFI products in use to 2.8 GFI products in use, with the help of MSPs.
  • Simple math: GFI has been bringing on about 150 MSPs per month, and 80 percent of those adoptions are new to the market rather than MSPs switching from another platform. That's a critically important distinction. Scott insists GFI's growth is mostly organic -- new MSPs rather than rip-and-replace MSPs jumping from another platform. Most of the GFI MSPs sound like they are supporting customers with 30 to 50 employees each.
  • More math: I believe GFI Max now has about 500,000 end points under management, with 30,000 more per month coming online. (I concede: I might have those figures wrong; need to double check. Conversation with Scott was fast and furious and filled with stats.)
To drive the company forward Scott seems to be leveraging three mantras:
  • From one of his mentors: For career and business success, catch waves and ride the momentum
  • From Apple: Simplicity wins. "It's more important what you leave out than what you put in."
  • From Salesforce.com: "Don't fight the cloud."

Loud and Clear

Scott's advice to MSPs: "Don't fight the cloud. You're an idiot if you do."

The simplification of quality assurance and the rapid feature rollouts makes the cloud an unstoppable force, he asserts. Not by coincidence, GFI Cloud launched in July -- delivering a web-based interface for integrated antivirus, asset tracking and network management. It's designed for companies with up to 500 employees. GFI Cloud has already received four updates since its launch. And by the end of the year Scott is hoping to roll in LanGuard (network vulnerability and security scanner), and perhaps remote control and an email interface.

What comes after that? GFI is privately held and profitable. I asked Scott if GFI would pursue a potential IPO (initial public offering). His initial response involved the standard legal language -- GFI will always do what's in the best interest of its customers and its business. Then, he conceded that the IPO market has been weak recently, pointing to Facebook and other examples.

Also On the Radar

Scott mentioned at least three other trends that MSPs need to watch:
  • Microsoft Hyper-V deployments, which are skyrocketing (more thoughts on that soon from sister site The VAR Guy).
  • Cloud integration opportunities, where MSPs will tie together multiple third-party cloud apps for customers (more on Talkin' Cloud soon).
  • Web and cloud systems monitoring outside the corporate firewall, where GFI Monitis plays (back next week with more analysis on that).
In the meantime, Scott's tone hasn't changed much since we first met about three years ago. Outspoken, upbeat, focused on growth -- and convinced GFI's momentum will accelerate as more MSPs discover extended cloud suites that empower small business customers.
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