Dell's Next Move: A Master MSP Strategy

As part of its ongoing managed services push, Dell hopes to launch a Master MSP strategy in late 2008 or early 2009, MSPmentor has learned. The move has potential implications for anyone involved in managed services. Here are some of the preliminary details, based on a conversation I had with Greg Davis, vice president and general manager of Dell's Americas Channel Group.

Davis and I spoke on June 20 about Dell's quest to keep improving communications with partners. I plan to post a few blogs this week about the conversation. First, up: Dell's Master MSP Strategy.

When asked if Dell plans to build hosting facilities and network operation centers (NOCs) that MSPs can tap into, Davis delivered a firm and quick "yes." The concept is rather simple: MSPs will be able to re-brand the Dell hosted services as their own -- with no need for the MSPs to build and manage their own NOCs (though MSPs certainly can continue to do so, if they choose).

Dell's strategy is somewhat similar to Master MSP services offered by Do IT Smarter, Ingram Micro Seismic, Jamcracker, Symantec Protection Network, Secure My Company, and dozens more.

Master MSPs: Not All the Same

However, there are some subtle but important differences MSPs should note. For starters, solutions like Do IT Smarter, Ingram Micro Seismic and Jamcracker offer a range of managed services platforms from multiple third parties (and Jamcracker, for one, doesn't plan to host the services).

In stark contrast, Dell's strategy will likely focus on the company's own MSP platforms (Silverback, Everdream, etc.). I plan to have a follow-up conversation with Mike Menegay, director of Dell Business Services, to see if Dell will plug additional third-party platforms (Autotask, ConnectWise, etc.) into its Master MSP portfolio.

Pros and Cons of Dell

So, what does Dell's Master MSP strategy mean to aspiring and existing MSPs?

First, let's start with the potential upside: Aspiring MSPs that believe in Dell's Silverback platform will be able to jump into the managed services market without paying for a major NOC or data center deployment or writing a big check for initial software licenses. Also, the MSPs will be able to brand the services as their own -- or even hand off the services to Dell while collecting a commission on the deal.

Now, the potential downside: Many VARs and MSPs remain skeptical of Dell, because of the company's direct sales heritage. Will Dell try to take all MSP business direct? I strongly doubt it, because Dell's number one priority is driving its stock higher to please disgruntled investors. And Dell's financial strategy depends heavily on VARs and MSPs assisting Dell's SMB sales push.

Another key concern: Some partners worry because when they register deals with Dell, they have to turn over customer information in order to receive Dell partner discounts. But Davis notes that this is standard operating procedure between numerous hardware companies and their partners.

Davis is working overtime to communicate the company's partner strategy, and is in San Francisco this week meeting meeting with partners to answer their questions. More than 100 solutions providers signed up for the meeting, Davis says.

Pros and Cons of Master MSPs

There are also some potential pros and cons tied to the broader Master MSP model.

Proponents are quick to note that the Master MSP approach allows VARs to quickly move into the managed services market without pay big lump-sum fees for hardware, software and related services.

But skeptics assert that the hosting model will commoditize the managed services market. Here again, I beg to differ, since VARs can add additional services onto the Master MSP services.

Also, VARs continue to control the customer account and business relations -- so they can fine-tune their services to meet specific customer needs that the hosting provider would otherwise overlook.

In Dell's case, it sounds like the company is striving to introduce its Master MSP services in late 2008 or early 2009, according to my chat with Davis.

More thoughts on Dell to follow this week.
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