Meeting SMB IT Priorities

As more economic signs point to the bottoming of this recession, companies are starting to reposition themselves by aligning IT strategy with business goals. According to the latest survey by Forrester Research, top priorities for small and midmarket businesses are "improving IT efficiency and streamlining business processes. 15% say that this is a critical priority while 45% of SMBs say they are working on initiatives around this."

The key take away is that IT strategy is now business strategy. Smart companies are serious about leverage IT to improve all facets of operations. It's about doing more with less by investing in IT to reduce costs and improve performance. Looking ahead, IT solution providers, VARs and MSPs will need to transition into more of a strategic role that focuses on solving business problems instead of technology challenges.

Here are some highlights from the survey:

• Top goals within IT organizations are improving end-user work force productivity, managing customer relationships, and acquiring and retaining customers.
• Hardware spending, led by server and networking equipment is facing more cuts than software spending.
• Software spending is being led by security technologies – 25% of SMBs say they plan to increase spending here while 29% say they plan to decrease it.

Proactive Managed Services Still In Demand: Remote Monitoring is Key

Kaseya just released its 2009 IT services Trend and Practice Survey Result which consists of 2,256 VARs, solution providers and IT consultants combined or "fully outsourced IT" described by the report.

The most interesting part is that most IT companies (80% or more) are still doing the "break-fix" reactive approach rather than the "automated" pro-active model in their managed services practice. This shows the challenges that many IT shops still have in moving to a pro-active model and is one of the many topics covered during our Zenith training by our CEO Kent Erickson.

Accordign to the survey, the biggest challenge is "monitoring" followed by "security." Remote system monitoring is definitely the trend for the growing proactive IT management model that businesses will adopt in the future.

Interested in learning more about how to be pro-active in your Managed Services practice? Contact us to get information on how to sign up for Pointivity's training course.

Strong Growth for Consumer and Business Hosted Email Services

Radicati released a new study on hosted email projecting the hosted email market to grow to 564 million mailboxes by 2013.


Driven by increased broadband internet availability, lower prices and better bundling of premium services, this is the perfect time for VARs and MSPs to add hosted enterprise email like our Hosted Microsoft Exchange.

More importantly, businesses are taking renewed interest in hosted business email solutions as a way to reduce costs in a tight economy. This is reinforced by the increased availability of low-cost, full-featured messaging and collaboration suites from Microsoft, Google and others.

If you're a VAR, MSP or a IT service firm, offering hosted email is a great way to add immediate value to your core professional services. It allows you to create a wider breath of products and services without any upfront costs. Plus we have an unique private label program and a powerful control panel to make it simple and easy.

ASCII Success Summit - Los Angeles 2009

Last week I attended the ASCII Success Summit in Los Angeles.

There were about 100 VARs who attended the show. I didn't get to see all the presentations as they divided the group in half in order to fit in all the presentations that day. In the future ASCII should either let members determine which presentation they want to attend or allow speakers to talk to all attending members.

The two best presentations at the event were Kent Erickson (ASCII member) from Pointivity and Ron Gavlick from Zenith Infotech.

Kent Erickson's presentation focused on the shift in the IT industry from traditional hardware sales and break/fix services to hosted services and cloud computing.

To view Kent's presentation online, click here:
http://www.slideshare.net/secret/EKSs1rVyDP1xYb

Ron's presentation focused on Zenith's Backup and Disaster Recovery (BDR) device and the advantages of the BDR over traditional backup systems.

Other speakers at the ASCII Success Summit included:

• Evolve Partners on Microsoft BPOS
• ASCII Member, John Endter for Microsoft Response Point
• ASCII Member, Dave Seibert for StorageCraft
• ASCII Member, David Lawrence for Efolder
• Autotask
• Storage Guardian
• Matt Makowicz – Managed Services Books
• ARRC – HaaS Strategy
• Reflexion

In talking with the attendees and ASCII members you can still see there's a big divide and difference in the IT market between traditional VARs (break/fix) and the MSP industry. Many of the smaller VARs are just getting into MSP or only entered into the MSP market with the last 6 months. Even fewer VARs are offering hosted services, they are still providing on-premise solutions with large hardware capital expenses which involve labor intensive support and ongoing maintenaince.

I had great conversations with many of the VARs about the value of adding hosted solutions as another sales tool. A handful mentioned they are reselling Google Apps and Google Email to their customers, but when questioned about revenue all them said they are not making any revenue off the sale of Google Apps/Gmail but provided the service to the customer to maintain the relationship and desktop support and desktop sales. The same goes for SalesForce.com and other online applications. The traditional VAR is being squeezed out of the market and companies like Amazon, Google and Microsoft are providing cloud based hosting services direct to customers with little or no revenue opportunities to the VARs.

It will be interesting to see how VARs move forward and what solutions they adopt, especially cloud or hosted solutions over the next year.

A Walk in the Clouds

In the February issue of the VSR (Vertical Systems Reseller) magazine, VSR sorted through the cloud hype and asked Kent Erickson, President and CEO, Pointivity, as well as several other VARs and vendors to ferret out these seven facts that VARs should know before breaking into cloud computing. Read the article here

Parallels Summit 2009 - A Big Success!

Parallels Summit 2009 was a big success this year and thanks to the Parallels team for putting on a great show! Attendees could clearly see why Parallels is becoming the industry leader in this space.

Serguei Beloussov, CEO of Parallels, provided the key note speech to about 1,000 attendees.

Serguei's presentation focused on the latest industry trends and he identified the channel falling into 5 different computing or cloud models.
1) Google Cloud, 2) Microsoft Cloud, 3) Other Platform Clouds (HP, IBM, Apple, EMC, Yahoo, Amazon, Facebook, Adobe and more), 4) Channel Clouds like Pointivity (mass market hosting, Telco, SaaS VARs, MSPs) and 5) In house clouds (large companies).

Serguei noted the keys to partner success are to become a one stop shop, differentiate your product offering and focus on customer and partner retention. Many VARs will not have the resources to support large product lines and it will be important for VARs without hosting expertise to partner with hosting providers who can support and train their staff both on the technology and on how to sell and position these products in the marketplace. Serguei noted there's a huge demand both from customers and within the IT industry for cloud and SaaS computing solutions.

The show included a great set of speakers most notably Morris Miller (founder of Rackspace) and Bill McNee (Saugatuck Technology). Morris focused on the importance of POSITIONING and provided a month by month/year by year historical overview of Rackspace's go-to-market strategies and product positioning strategies. Bill McNee provided in-depth research on the current SaaS industry and provided an end-user / CEO perspective of the hosting industry.

Over 160 companies utilize Parallels Automation and thanks to Parallels team for promoting Pointivity in your presentations!

Another big announcement was the release of Parallels SaaS module which now includes over 200 products that can be delivered through one interface. If you are a ISV or have a hosting solution product, please check out www.APSStandard.org. APS Standard has an open API directly to Parallels Automation engine, allowing any ISV product to be integrated with the Parallels engine. By leveraging this API you can get access to hundreds of master distributors and master resellers worldwide. If you need any help on getting your product integrated with Parallels, please feel free to contact partners@pointivity.com.

The two best additions to APS Standard and Parallels Automation at the show were Global Relay's message archiving and Open Exchange email replacement for Exchange Server. Both products are much needed in the SaaS and hosting industry and offer tremendous value to end-users and companies looking to outsource complex email services on a low cost, month to month, pay as you go option.

Tightened budgets making SaaS attractive

Today we honor the birthday of the Rev. Martin Luther King, Jr., and tomorrow we have President Obama moving from the on deck circle to the home plate. However; we couldn't stop more bad news from the banks. Royal Bank of Scotland bites the dust on a massive 28 billion pounds ($41.3 billion) loss, which would be the biggest loss ever reported by a British company, ouch!

So if banks don't and won't lend, business that used to depend on it will have to employ operation cash preservation - CapEx to OpEx mode. While enterprise software vendors are pushing for SaaS contracts, it can benefit the small-mid size VARs, MSPs, and solution providers.

By doing the math correctly on licensing, services and hosting; solution providers can market a value package that makes their customer feel like they're receiving huge discounts. And because of current economic conditions, more businesses are willing to give SaaS a try, employing pilot programs to seek proof of concepts. Pre-sale SaaS trials are good for traditional customers that had no experience with SaaS and if the user experience is great and the price is right why wouldn't they continue?

This is why we developed our partner program around SaaS enablement for partners, reducing hardware and software risks to the minimal while allowing the focus to shift towards business, marketing (brand) and sales. We can't control the shift in technology but we can implement control in our business and that's where the focus should be to deliver IT smarter.

The Empire Strikes Back: Reselling Google Apps

Another vendor has entered the channel with promises and optimism, this time its the search king Google. Yesterday Google introduced their new Reseller Program focus solely on gApps Premier Edition (email, chat, word, spreadsheets, presentations, and security). Until now Google only cooked up the menu to resell Google enterprise search appliances, Apps and Maps to enterprise customers. Key word 'Enterprise' partner program.

And now Google is ready to grow their channel during this economy knowing Microsoft is consolidating with web-based Office Web Applications not ready until 2010.

Google and Microsoft solutions can actually coexist depending on each customer on a case-by-base basis since Google has a slightly different approach to their channel. Solution providers or VARs may even combine the two but ultimately Google App is more appropriate as a cloud-based solution at lower cost than say an on-premises solution from Microsoft. Microsoft is restructuring its channel while Google has just begun, the perfect storm's thunder and lighting.

I am not surprise that Google doesn't having a deal registration because they spend years building their brand and offer free tools directly to customers. So the customers are already trained and used to their brand while Microsoft spend trillions creating products to build a service around their brand.

VARs and solution providers should focus on the business drivers: Continue to foster your relationship with your customers, look for ways to add value to their business, strengthen your brand, and deliver flexible solution (SaaS) that you can build your business on for the long haul. That translates to high customer retention, brand recognition and recurring revenue with real margins!

Step Right Up: Microsoft App Store Now Selling at a Online Store Near You

Microsoft today launched their first online store in the US (already available in the U.K., Germany and Korea). With the launch, US customers can buy first-party software and hardware directly from the internet. Products include software, devices and hardware, after payments are confirmed, customers can immediately download products and install them right away.

As we continue to see the "going direct" strategies implemented by Microsoft, VARs will need to act rather than compliant in adapting the inevitable - MSP will have a tough time competing against the big daddy (that used to make them money) for what will become the future of the channel, wait a minute what channel? According to ChannelWeb, Allison Watson, corporate vice president of Microsoft's Worldwide Partner Group, made no mention of the Microsoft Store and said that there were plenty of opportunities (hmmm...really?) for VARs to grow, as long as they stay focused on projects that improve energy efficiency, boost productivity and drive down costs.

I wonder what sort of margins can you continue to profit from Microsoft? How long can VARs sustain to this rate of change? Don't you have to survive so you can continue to deliver value?

In addition, they are rolling up the end-user customers with deals like going direct aggressively with 0% finance for Dynamics for 36 months (launched today as well) or the BizSpark program offering Web startups free software before becoming profitable. If any of these pilot programs are wildly successful (which I don't see why not), more products and services will be rolled out with even more aggressive offerings, don't forget even in this recession Microsoft is one of the few companies that's got a ton of cash in the bank, $26 billion to be exact.

You can't fight the trend as VARs or MSPs and you must live to fight another day by transforming your business to deliver IT smarter.