Will Best Managed Services Providers Resemble Mini-IBMs?
As the managed services market continues to evolve, the best MSPs may start to resemble mini-IBMs, predicted Andrew Monshaw (pictured), general manager of global mid-market IBM sales and distribution. Monshaw made the prediction during a sit-down interview with MSPmentor at the Avnet-IBM Partner Summit. Here’s the logic behind Monshaw’s statement.
First, let me set the stage: Roughly 800 channel partners and vendors have gathered at the Avnet-IBM Partner Summit in San Antonio, Texas. Many of the attendees are traditional VARs and integrators. But there are MSPs here — such as Tom Greening of i3 Business Solutions in Grand Rapids, Mich. Over the past few years, i3 transitioned to managed services to combat the weak Michigan economy.
Here Comes IBM
IBM’s Monshaw is watching the managed services trend closely. And for good reason: Monshaw oversees IBM’s go-to-market strategy for organizations with 1,000 or fewer seats. The effort is channel-centric. It sounds Monshaw is mulling a range of marketing and social media steps to raise IBM’s visibility within the managed services market. If all goes well, he expects successful MSPs to resemble mini-IBMs — offering consulting services to customers, and then using the consulting services to create pull for infrastructure, managed services and hosted applications.
Still, Monshaw says IBM needs to raise its voice in the managed services market. “We don’t touch the MSP community in a meaningful way right now, and we need to,” conceded Monshaw. “In this space we don’t have top of mind when it comes time for an MSP to call for a partner. We know we need to show them how to connect their value to our value.”
Balancing Cloud and Managed Services
It sounds like Monshaw is mulling MSP-centric moves. At the same time, the company has launched mid-market software solutions as well as a Cloud Computing Lab in the United Kingdom. According to IBM, the lab will “help IBM Business Partners cloud-enable their technologies and gain the sales and marketing skills they need to take advantage of this fast-growing market.”
Like MSPmentor has often stated, cloud and managed services seem to be close cousins. Publicly, IBM is talking loudly about cloud computing. But privately, Monshaw is organizing more thoughts on managed services. Stay tuned.
Sign up for MSPmentor’s Weekly Enewsletter, Webcasts and Resource Center. And follow us via RSS, Facebook, Identi.ca; and Twitter. Plus, check out more MSP voices at www.MSPtweet.com. And read our editorial disclosure here.
I think horizontal integration makes a lot of sense for MSP’s. I love having control of the entire stack under my roof. A referral relationship with other partners will only get you so far but when something breaks down or their model changes, you are left to swing in the wind. With the in depth integration of voice, internet, and computing, it only makes sense to be able to own the entire stack.
Dave: Do you mean that the stack is literally under your roof — running everything in your own data center(s)? Or do you mean you manage all components of IT for customers, regardless of where the IT components reside?
-jp
I’ll be very interested to learn more about IBM’s offering. They have some very beefy data center resources, NOC and storage capabilities. Their mid-range systems also support back-office applications for the mid-market. I wonder where the margin lines will be drawn to keep everyone happy. IBM has over 400,000 FTEs to carry.
Scott: Stay tuned. I think it’s safe to say IBM is taking a close look at the managed services market for 2011 and plans to engage in a growing dialog… We’ll stay on top of the story.
-jp
Joe,
Early morning for you, Mr. Sunshine. Must be the excitement that a return to San Antonio generates…kept you up all night, right?
Seriously though, the concept of having the “entire stack under one roof” does make sense, though the approach may vary. Adding services to your portfolio via strategic outsourcing and partnerships is the way to go — I don’t believe anyone but the largest can afford to build out internally. Rather, adding strategic components to your product and service offering is the approach. And oh yes, every VAR/Reseller/MSP or Solution Provider must deliver the “Bedrock Services” of NOC, Help Desk, Security/Compliance, Data Protection Services and so forth — these are quickly becoming requirements to play in both the Small/Medium Enterprise as well as in the Large customers.
IBM is a choice, and your telling comment is on cloud and managed services. They are cousins, and in my book, managed services comes first. Make sure to partner carefully and good luck to all! Time to morph yet again…2011 is fast approaching.
Gerard
http://www.mspsn.com
It is strange how the term Mini-IBM is being used in the MSP space. If you look at the larger MSP’s – they have to be able to provide end-end technology, resources and services to be able to be a true full service MSP. I was in the enterprise space in another life and competed against IBM for Help Desk Services. There was often times I would have to partner with several other companies to be able to compete. If HP/IBM ever decide there is money in the SMB market – they will force their competition to offer end-end services. The advantage MSP’s have is their familiarity with their customers that an IBM/HP will never be able to replicate.
Scott: During my conversation with IBM’s Andrew Monshaw, it became pretty darn clear that IBM wants to partner its way into the SMB MSP space. Stay tuned.
-jp
Joe:
I find the entire conversation and concept fascinating.
I didn’t really look at i3 as a ‘mini-IBM’ – although I’ve been talking about IBM’s transition to 84% of their net profit coming from services and software for the last 5 years. 7% of their net profit comes from hardware! Certainly, we chose to transition to a services centric model as hardware margin dollars deteriorated.
Track me down if you’re ever looking for the partner perspective on these matters.
Michael Ritsema
President
i3 Business Solutions, LLC