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 Channel Futures

Sales & Marketing


Free: The New MSP Strategy?

  • Written by Joe Panettieri 1
  • October 22, 2009
A so-called "free" strategy continues to sweep across the managed services market. But whether you're an association, a software provider or a managed services provider (MSP), "free" is a tricky strategy to manage -- especially as you try to convert free clientele into paying customers. Here's a look at the trend.

free_managed_servicesA so-called “free” strategy continues to sweep across the managed services market. But whether you’re an association, a software provider or a managed services provider (MSP), “free” is a tricky strategy to manage — especially as you try to convert free clientele into paying customers. Here’s a look at the trend.

First, a look at some of the free efforts in the MSP market:

  • N-able has launched free software agents and free endpoint security options for its existing MSP partner base. The move aims to help MSPs expand their customer bases
  • Sophos is offering free data leakage prevention capabilities in its endpoint security offering
  • Spiceworks offers free remote monitoring software, powered by an advertising system
  • Trend Micro offers Worry-Free Remote Manager remote monitoring software for free to its security MSPs
  • At a conference in Amsterdam, The Netherlands, the Managed Print Services Association (MPSA) has announced “a new suite of member services” that are free for a limited time.
  • Additional associations and organizations — everyone from the MSPAlliance to MSP Partners (recently acquired by CompTIA) and MSP University — frequently pull together “free” offers to engage members or drive events forward
  • Stay tuned folks. I suspect we’ll hear at least one new “free” MSP-oriented offer in the next 10 business days, and it could be dramatic

Free can be a great way to generate buzz and engage partners/customers. But at some point, you need to convert many of those free folks into paying clientele. Some businesses have done a remarkable job converting free audiences into paying customers — the prime examples including Google (free search to paid search) and Red Hat (free Linux to subscription Linux). But free can also kill a company (prime example: Netscape).

Free for the Long Haul?

In the MSP space, the free strategy will need time to play out.

I’ll be watching the N-able partner ecosystem particularly closely.

  • How will existing partners use those free remote management and endpoint security licenses?
  • How will they pitch the offerings to customers?
  • Will MSPs bill for the free offerings and pocket the profits?
  • Or will MSPs offer up the software for free to customers — just to get them hooked on managed services?

So many questions. But one thing seems clear: Profitable companies like Red Hat have proven free is here to stay. Now, the rest of us have to figure out our free strategies — especially in the managed services industry.

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Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Sales & Marketing Strategy

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4 comments

  1. Avatar JT October 22, 2009 @ 3:05 pm
    Reply

    You’re onto something here but I want to point out one other risk associated with free. When you come out with a free offer you run the risk of alienating your existing paid customer base.

  2. Avatar Joe Panettieri October 22, 2009 @ 9:01 pm
    Reply

    JT: Good point. I can’t speak for everyone but in N-able’s case the “free” offer was carefully planned to involve N-able’s N-central customer base. For exact details check in with them.

  3. Avatar Greg Walters October 23, 2009 @ 1:00 am
    Reply

    Ok – yes, in one part of my life “free” is a four-letter word that begins with “F”…which is bad…like “free” print assesments.

    On the other hand, sometimes a complentary, introduction period can sell the longterm.

    The MPSA has a just such an offer. We hope to generate a little buzz, get some people to take a look, and possibly convert a few to lifelong members.

    Thanks for the mention.

    Greg

  4. Avatar Anup Gopinath October 26, 2009 @ 5:12 pm
    Reply

    Sorry guys. Couldnt catch up on the discussion earlier. I believe “Free” is a great way to invoke curiosity from prospective cleints but there has to be certain restrictions on the duration of usage.

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