PacketTrap: Say Goodbye to Managed Services Shelfware

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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