By Tara Seals

Posted: 2/2002

Partner Channel

Managed Service Providers Tap Partner Channel

By Tara Seals and Khali
Henderson

The enhanced services sector continues to grow, and managed service providers in the space have discovered the indirect channel.

Jamcracker Inc., which offers managed ASP service integration; Myrient, a managed hosting and security company; and SAVVIS Communications Corp., which offers managed IP services, have turned to the alternate channel for distribution.

The strategy may help such pure-play managed service providers (MSPs) to hedge competition from telcos and professional services organizations that are getting into the managed services business. Of the hundreds of MSPs that have emerged during the last two years, only a few will survive the next five years in their current form, according to research that Ovum published in November. The study predicts many MSPs will fold or be acquired. Those that make it will share a market that Ovum predicts will be worth $15 billion by 2006.

The research firm also notes managed services are positioned best as a value-added service supporting the alternate distribution strategy.

Jamcracker launched a strategic alliances program for agency and wholesale channel partners to sell its proprietary Jamcracker Enterprise platform and services. The offering streamlines company communications systems. It allows them to develop a suite of hosted web-based applications from various vendors, to be accessed from one privately branded platform. Jamcracker also allows companies to outsource the nuts and bolts of the system — the access, management, monitoring and support for their application suites.

The program targets software and hardware distributors, telcos, system integrators, platform and infrastructure providers, value-added resellers and consultants that want to expand their web services offerings as partners.

“This program helps companies jump head first into the fast-growing web services market,” says Samir Bodas, vice president of strategic alliances for Jamcracker. “Through the Jamcracker strategic alliances program, our partners will be able to leverage leadership in their existing markets.”

Services available for partners to sell include an XML-based IT management platform developed for web services, support and content delivery. In addition, an applications catalog offers a portfolio of web-based services for connectivity, help desk, messaging, security and collaboration. It includes business applications for enterprise resource management (ERM), customer relationship management (CRM) and supply-chain management.

Snap-in functionality takes incremental ASP offerings and web-enabled applications and incorporates them into a branded workspace. And, an integration service streamlines internal systems to allow easy pricing, stocking, bundling, promotions and other marketing programs. It features content integration for the delivery of targeted marketing information.

Myrient, an outsourced IT solutions provider that delivers managed services, has made several changes lately. It appointed Timothy Prukop as director of enterprise sales, launched an agent recruitment effort and expanded web-hosting options.

Prukop, one of now-defunct Exodus Communications Inc.’s top sales executives, will help expand Myrient’s market share, the company says.

“Tim brings high-profile enterprise sales prowess to Myrient and his proven expertise in delivering high-performance results will help us scale our world wide business,” says Jim Ferguson, Myrient’s executive vice president of world wide sales.

As another sales strategy, Myrient has begun recruiting master agents to sell T1 lines, virtual private networks (VPNs), hosting and storage solutions.

“We have already gone through the tumultuous times that our competitors are experiencing now,” says Bryan Turbow, Myrient president and CTO. “We recovered, refocused and are back in full force. Our strategic partners and highest-quality vendors give us the competitive edge we need for continued success for us and our customers.”

The recruitment will help the company target a growing market. International Data Corp. predicts that by 2004 nearly two-thirds of the 8 million small and medium-sized businesses will have a web presence, and 82 percent of small businesses in 2004 will choose to outsource their web hosting.

“Many organizations no longer can afford the internal personnel and IT infrastructure required to deploy a sophisticated website,” explains Turbow.

Myrient’s enhanced managed solutions suite includes dedicated data backup for disaster recovery, round-the-clock monitoring and reporting with a web interface for status checks, web load balancing across two or more web servers, and managed security. Pre-configured packages start at $395 a month, are scalable and are based on the IBM X-Series servers.

Meanwhile, SAVVIS, turned to agents last summer to sell IP VPNs, firewalls and other managed IP services. The company looks for agents already selling IP solutions and services, but it will provide necessary training. Among the support options are a “SAVVIS guide” for a central point of support reference, corporate, network and order-placing training, advanced intensive product training, and dedicated channel managers.

It may be a good opportunity for agents. Infonetics Research predicts worldwide VPN services revenue will increase from $10.7 billion this year to $41.2 billion in 2005.

Another niche for SAVVIS agents is managed network services and quality of service (QoS) monitoring. Potential clients include ASPs, says John Jacobs, SAVVIS’ vice president of alternate channels.

“Instead of being in the real estate game and spending money trying to build a facility, ASPs are supposed to be in the applications management space,” Jacobs says.

Thus, many of them use the public Internet for content delivery.

“Why not take this thing and spin it on its head and say, as a content- delivery mechanism, put content and access on the same backbone and then the customers really never go through the Internet,” he says.

Without using the public Internet, ASPs can guarantee delivery and QoS, an attractive prospect for them.

“There are folks willing to pay premiums for QoS,” Jacobs says adds. “It’s a far cry from saying, ‘just get your Internet access line and come to us at our website.'”

MSPs that make it will share a market that

Ovum predicts will be worth $15 billion

by 2006.