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 Channel Futures

MSP 501


PacketTrap: Say Goodbye to Managed Services Shelfware

  • Written by Joe Panettieri 1
  • June 15, 2010
Some readers tell the managed services market is loaded with shelfware (i.e., unused managed services licenses that cost individual MSPs thousands of dollars). Other readers tell me MSP shelfware isn't a problem. But now comes word that PacketTrap Networks will soon adjust its software licensing model to mitigate MSP shelfware risks. Here are the details.

Some readers tell the managed services market is loaded with shelfware (i.e., unused managed services licenses that cost individual MSPs thousands of dollars). Other readers tell me MSP shelfware isn’t a problem. But now comes word that PacketTrap Networks will soon adjust its software licensing model to mitigate MSP shelfware risks. Here are the details.

I mentioned the potential MSP shelfware problem in a June 3 blog post. In an email reply to me, PacketTrap Networks’ Mike Byrne wrote:

“I would have to agree with you that shelf-ware is one of the biggest (and growing) issues in our space.  So, with that in mind I thought I’d ping you and let you know that we’re in the process of launching a new pricing methodology/structure that is based on our existing license tiers, however, gives our customers the freedom of buying any number of licenses in between as well.”

PacketTrap, a division of Quest Software, currently offers MSPs 100, 250, 500 and 1,000 ‘packs’ of licenses. “Moving forward,” says Byrne, “if the existing license tier doesn’t fit with our customers go to market support model they will now be able to chose any number in between and get a pro-rated price per node. So if a customer wants 362 nodes …. They can buy 362 nodes and not get forced into the 500 tier level.”

It sounds like a hybrid approach to me: Pick the closest tier, then get pro-rated pricing to zero in on the exact number of additional nodes you need. PacketTrap is expected to officially announce the new licensing model on June 21. But the PacketTrap sales team has already started reaching out to MSPs with the new offer, Byrne says.

Plenty of Options

While some vendors have long-promoted tiered licensing packs, more and more MSP software providers are moving to a pay-for-what-you-use model. The reason: Plenty of overly optimistic MSPs purchased more licenses than they actually use. Some of those MSPs have since pursued simplified licensing models from vendors.

Also, pure-play SaaS companies have put pressure on the old license pack model. And established MSP software providers (particularly Zenith Infotech) have aggressively pointed out to me that they don’t require license pack commitments from MSPs.

Of course, it’s impossible for me to track every software company’s licensing policy. But much of the shelfware chatter over the years has involved Kaseya‘s license packs. I’m frequently asked by MSPs how many unused Kaseya licenses are out in the market. (I don’t have a firm answer.)

That said, Kaseya’s MSP partner base appears large and engaged. Also, Kaseya is expected to launch its SaaS version of the Kaseya 2 platform in July 2010. And Kaseya recently launched G1, an on-premises platform for smaller MSPs.

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Tags: MSPs MSP 501

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3 comments

  1. Avatar Steveak McForrester June 15, 2010 @ 6:40 pm
    Reply

    I would have purchased PacketTrap had it not been the pricing model. They have a far superior solution but we need to grow our biz a little at a time. Nit going to overpay hoping to grow into licenses. I wish I had known buy now I have to figure out how to pull out if my current system affordably.

  2. Avatar David Toms June 15, 2010 @ 6:54 pm
    Reply

    I had the opportunity to work at Novell at a time when the company was evolving from a fixed license model, to site license Gold disk models. There are significant advantages to not being restricted to ‘fitting’ your usage requirements to a vendors licensing bundles, or clip levels. itControl Solutions is also reviewing our complete product offering and will be launching extensions to the current product porfolio that will provide flexibility, ease of deployment, and the opportunity to closely align products purchased with size of requirement. The key to any site license type program, or pay per user model is in the ease of auditing, so as to insure license compliance, and simplify tracking, reporting and payment of license and/or maintenance fees.

  3. Avatar Joe Panettieri June 16, 2010 @ 10:48 am
    Reply

    Steveak: Several readers shared the same thought with me over email. Please keep us posted as you make additional moves in the managed services market.
    David: Your thoughts on “ease of auditing” caught my eye. I’m going to noodle on that a bit for future coverage. Thanks.
    -jp

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