At the N-able Partner Summit, CEO Gavin Garbutt is touting several signs of growth within the managed services market. Among the highlights: N-able's MSP partners have grown their managed device base by 51 percent since February 2010. Moreover, N-able's MSP partners are managing 45 percent more customers since February. What's driving the growth?

Joe Panettieri, Former Editorial Director

October 21, 2010

5 Min Read
N-able CEO Signals Accelerated Managed Services Growth

gavin garbutt

At the N-able Partner Summit, CEO Gavin Garbutt is touting several signs of growth within the managed services market. Among the highlights: N-able’s MSP partners have grown their managed device base by 51 percent since February 2010. Moreover, N-able’s MSP partners are managing 45 percent more customers since February. What’s driving the growth? Garbutt points to simplified sales models and freemium software strategies that are taking hold with MSPs and their end-customers. Here are the details.

First, a reality check: The mood here at N-able Partner Summit (Scottsdale, Ariz., Oct. 20-22) is overwhelmingly upbeat. Roughly 300 to 350 MSPs and industry vendors are attending. Talk about the recent recession seems to be at a minimum. That negative chatter has been replaced by upbeat thoughts about upsell opportunities and potential cloud computing opportunities. Still, let’s keep the upbeat mood in perspective: N-able is a privately held company so it’s difficult to say just how well the company and its partner base truly are performing.

Facts and Figures

Now that you’ve got the background here are some stats worth noting. According to Garbutt:

  • N-able’s MSP base now manages about 33,500 small business customers, up about 45 percent from about 23,100 in February 2010.

  • Those MSP partners are managing 51 percent more devices since February 2010. Some of that growth is tied to N-able’s freemium endpoint security strategy, announced at the 2009 N-able Partner Summit. But the number of paid managed devices is up about 39 percent, Garbutt notes.

  • 25 percent of N-able’s wins since February 2010 have involved MSPs ripping out rival RMM (remote monitoring and management) platforms to deploy N-able’s software, so “it shows N-able is doing a few things right,” according to VP of Sales Mike Cullen.

What’s Driving the Growth?

To explain the 2010 growth, Garbutt looks back to 2008 — when N-able began studying a disappointing market reality. At the time, he estimated that only 10 percent of SMBs were using some form of managed services. The problem, Garbutt says, was MSPs were having a difficult time explaining managed services to their target customers.

To ease the sales process, N-able in late 2009 introduced a freemium endpoint security strategy. The effort allowed MSPs to offer basic endpoint security and remote management to customers, at a price point that’s typical of the traditional anti-virus market. The freemium strategy allowed MSPs to start monitoring customer networks for potential upsale opportunities, like backup, Garbutt says.

Are MSPs really succeeding with the strategy? Garbutt points to four success stories:

  • CalTech grew from 17 to 84 managed customers in seven months, mostly in the banking industry

  • Novtis (checking the company spelling, link) went from 60 to 370 customers on N-able’s N-central platform this year, mostly targeting retail customers

  • Chips Computer Services has jumped from 55 to 170 managed customers in 2010

  • AE Technology Group (checking the company spelling, link) has grown from 49 to 102 managed customers in 2010

MSPmentor will be checking in with each of those MSPs here at the conference to gather more details.

Next Moves

N-able is pleased with the progress, but Garbutt says 85 percent of North American SMBs still are not managed. Moreover, research from AIM suggests the remote managed IT services market will grow 3.3 times in the next 5 years, that’s 28 percent annual growth, Garbutt noted.

The big opportunity for MSPs is to manage “100 percent of their customers bases, and 100 percent of their devices.” How? By offering freemium endpoint and backup services to those customers, monitoring networks for new opportunities, and upselling and cross selling services, Garbutt says.

Of course, cloud computing also is a big theme here. Garbutt concedes that the media and the industry spend far too much time hyping cloud. But he also believes in the cloud computing opportunity. To assist MSPs with the cloud, N-able is developing a shortlist of potential cloud partners, applications and pricing models that MSPs can leverage. N-able’s initial cloud-related partners, within a Cloud Alliances Program, include Amicus, CA Technologies, CP Greeley, DRS, eEYE, Fluke Visual Network Systems, Iron Mountain, LongView Systems, Netservice 365, Rackspace and Xilocore.

Reality Check

Like I said: The talk here is all about growth. And the story sounds really good for MSPs here attending the conference. But a note of caution: It’s impossible for me to determine whether N-able itself is enjoying a big profit wave from the freemium endpoint security strategy. Garbutt certainly sounds upbeat and the company’s headcount stands at about 120 employees. Plus, new hires are joining the team (more on that later).

It’s good to be at an event where growth — rather than the recent recession — is the central theme. But Garbutt concedes, “you can be sure our competitors will catch on to our strategy [so] let’s make hay while the sun shines.”

We’ll be poking around the conference to try and determine just how brightly the sun is shining.

Call To Action

By the 2011 N-able Partner Summit, Garbutt called on MSPs to:

  • Grow your managed services customer base by 100%

  • Leverage reporting to cross sell and up-sell services

  • Build recurring revenues and profitability

  • Take control of your market and be the best MSP in your region

Our coverage of N-able Partner Summit continues later today.

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About the Author(s)

Joe Panettieri

Former Editorial Director, Nine Lives Media, a division of Penton Media

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