Last week’s IT Nation Connect event, ConnectWise’s annual users conference, held in Orlando, Fla., hit on a few of the core trends that channel partners grapple with today.
Trends included the need for partners to specialize their businesses, an imperative sparked by the commoditization of basic IT services. ConnectWise also called on partners to better align with the as-a-service model — as well as key sales and marketing metrics that executives tend to neglect or ignore. Another trend highlighted at IT Nation Connect 2018 was the need for managed services providers (MSPs) to revamp cybersecurity practices. ConnectWise, for its part, said security will play a large role in its product roadmap going forward.
As the IT services industry matures, MSPs need to differentiate themselves, whether it means specializing in vertical and niche markets or a particular branch of technology such as managed security.
According to ConnectWise, the managed services industry is poised to reach $154.5 billion globally by 2021, representing a 13% compound annual growth rate. The drivers behind the growing demand include customers seeking cost efficiencies, technological innovation, agility and continuous improvement. Additionally, as customers increasingly cope with a scarcity of internal technical resources, they will look to outsource to IT services providers — an opportunity for MSPs with specializations.
“The days of the generalist — I don’t want to say are dead — but all of us are going to find a need to specialize and differentiate ourselves in some way,” said Arnie Bellini, CEO of ConnectWise, during his IT Nation Connect keynote.
As-a-service model proficiency
In the near future, Bellini said, all technology will be delivered and managed as a service. This means channel companies should understand the as-a-service model and develop business strategies accordingly.
Craig Fulton, chief product officer at ConnectWise, said the subscription-based, as-a-service model is essentially “a customer experience” where customers own the relationship. “The sale doesn’t end when they sign that quote; the sale begins then,” he said.
He emphasized a handful of metrics that subscription-based services providers should pay close attention to: churn, retention, customer acquisition costs and customer lifetime value.
ConnectWise’s cybersecurity posture
Fulton said ConnectWise has focused on aligning its platform with the National Institute of Standards and Technology (NIST) Cybersecurity Framework. He noted that ConnectWise had an audit done against the NIST Cybersecurity Framework and identified areas of success and improvement.
Security, because of its constantly shifting landscape, represents a top challenge for ConnectWise going forward. “We are aligning our roadmaps to adhere the products to the NIST Cybersecurity Framework, and so there will be challenges there in getting that work completed and educating our partners on how to use the system to adhere to that,” Fulton told us in an interview.
He added that ConnectWise remains committed to its vision for a connected ecosystem, showcased at the IT Nation 2017 conference. “It is such a priority, we have created a business unit within the company that is focused on that,” he said.
UiPath partner companies will soon be able to apply for funding from a $20 million investment pool the robotic process automation software vendor has established.
The company, based in New York, aims to accelerate RPA and AI adoption as it invests in its partners with an eye toward 2019. The investment dollars will be available from two funds: the UiPath Venture Innovation Fund and the UiPath Partner Acceleration Fund. The venture innovation fund will invest in AI-focused partners that have expertise in machine learning, business process management, process mining and intelligence, according to the company. Chatbot companies and startups that have committed to making integration with UiPath faster and easier also fall within the fund’s scope.
The partner acceleration fund, meanwhile, targets global UiPath partner firms that support automation and AI across go-to-market and enablement activities, and accelerate enterprise RPA adoption, the company said.
Partnering in the ‘automation-first’ era
The investment program was revealed Thursday at the UiPath Forward conference in Miami. The funding coincides with what Daniel Dines, co-founder and CEO at UiPath, called the “automation-first” era, a trend he said ranks in importance with other watershed technology developments from the birth of the mainframe to cloud and mobile computing.
“My feeling is we are again at the dawn of the new, big change in technology,” Dines said. “This new era is the automation-first era”
Dines described automation-first as the confluence of computer vision technology, the maturation of AI and business process optimization.
Partner support at UiPath Forward
“To me this is an investor fund,” said conference attendee Clinton Coker, principal at Machina, a UiPath partner based in Houston. “We are going to go back and look at how we can put our best foot forward to demonstrate to UiPath we have some opportunities to not just move the needle. We want to blow the odometer up.”
Machina is not ready to detail the offering it will submit as an investment candidate — a process that is expected to kick off in November. But Coker suggested his company might approach UiPath with a bundle of products and services for the energy industry, Machina’s vertical market focus.
UiPath’s investment funds, in general, demonstrate the companys’ interest in supporting UiPath partner firms as well as its customers.
“We’re in this game together,” Coker said.
The UiPath Forward conference drew more than 1,500 customers and partners. Last year’s inaugural event had about 500 attendees, according to UiPath officials.
Drive Shack Inc., a virtual reality golf business, puts a new twist on a greenfield deployment.
Starting from scratch, the company sought an IT infrastructure capable of supporting a 60,000-square-foot facility in Orlando, Fla. The complex needed everything from gaming platforms to servers and security. The concept is to let golfers virtually play courses from around the world.
Ravi Nekkalapu, CIO and head of IT at Drive Shack, reached out to Trace3 Inc., an IT solutions provider based in Irvine, Calif. Nekkalapu had a previous relationship with Trace 3 when he was senior director, enterprise architecture and cloud strategy, at Wyndham Worldwide. In the new arrangement, Trace 3 was tasked with devising the technology underpinning Drive Shack’s flagship facility.
“Trace3’s approach was to review the customer’s overall goals, designs, and requirements for this new venture,” said Tim Benner, vice president of architecture and strategy at Trace3.
Cisco’s role in virtual reality golf
As a result of Trace3’s technology review and proof of concept initiatives, Cisco and the vendor’s StadiumVision (now Cisco Vision for Sports and Entertainment) was deemed the best fit. Cisco Vision for Sports and Entertainment centrally manages the distribution of video and digital content to high-definition or ultra-high-definition displays installed throughout a given venue.
Benner said the Cisco offering provided “the best of breed and bleeding-edge capabilities at the infrastructure level we were looking for.”
Cisco-provided infrastructure includes Unified Computing System servers for client compute, video servers and hardware, Catalyst switches, Cisco routers, Meraki MX and Cisco Firepower Threat Defense security appliances, and wireless technology from Meraki.
Having a single vendor responsible for those infrastructure elements provided a simplified “one-throat-to-choke” support mechanism, Benner said.
Other infrastructure elements
Cisco, however, contributed one of many pieces of the Drive Shack technology ecosystem. Other infrastructure components include golf ball dispensers, Android tablets, security cameras and systems, cameras that track ball and player movements, and StorMagic’s virtual storage-area network products.
Software for providing client compute, Benner said, is based on VMware for virtualization and Microsoft Windows Server and Windows 10 for delivering the gaming platform as well as infrastructure services for administration and authorization of the gaming platforms.
As for deployment, Cisco provided in-depth implementation of its StadiumVision infrastructure platform, while Trace3 implemented the other infrastructure components for virtual reality golf.
Benner said the key to this project — and realizing the Drive Shack vision — was the “concept of team ownership of every system, from infrastructure to gaming platforms and development.”
With its infrastructure in place, Drive Shack’s Orlando facility opened in April 2018. Other Drive Shack virtual reality golf centers are on the horizon. Trace3 is working on the next facilities scheduled to launch, including centers in Raleigh, N.C., Richmond, Va. and West Palm Beach, Fla.
To support the current and planned Drive Shack golf complexes, Trace3 manages a technology-testing lab in White Plains, N.Y. Benner said plans are in the works to open a larger lab, capable of mimicking “the full stage and platform” of a Drive Shack facility.
Hurricane Florence made landfall Friday morning in North Carolina, but data centers will continue to operate, including the Ensono data center in Kings Mountain.
Kings Mountain, in the Charlotte metro area, is well inland, but the region is still expected to see high winds, more than 10 inches of rain and the potential for tornadoes. Hurricane Florence was classed as a Category 1 hurricane as of Friday morning.
Power outages are the key threat to IT equipment, and already more than 400,000 homes and businesses are without electricity in the Carolinas. Jim Kozlowski, vice president of global data center operations at Ensono, said the company’s mission-critical data center’s electrical systems, cooling systems and backup diesel generators operate with many layers of redundancy. Ensono is a managed services and cloud services provider.
“The center is designed to operate continuously even without public utility power into the site,” he said. “The backup generators have fuel storage onsite and additional fuel deliveries on standby to provide continuous operation throughout the storm and any potential utility power loss.”
In the area of power generation, the Ensono data center in Kings Mountain has multiple backup diesel generators. The generators supporting the Ensono data center are designed and have been maintained to withstand the rain and wind associated with the storm.
Kozlowski said Ensono has tested all of the data center’s systems, noting the center’s maintenance is up-to-date to ensure backup systems are able to function as planned. The company has informed customers of the steps it has taken and continuously updates them based on weather service and utility company information.
IT services firms in areas prone to natural disasters develop emergency preparedness plans to help customers deal with the immediate crisis and its aftermath. In 2017, during a particularly busy hurricane season, SearchITChannel wrote about how one Florida MSP supported its customers through Hurricane Irma.
Accenture last week scooped up two companies to solidify the product innovation component of its Industry X.0 practice, which aims to help clients develop smart connected products and services.
The IT consulting firm acquired Mindtribe, a hardware engineering firm based in San Francisco. Mindtribe uses Agile techniques to create connected hardware that integrates with digital services. Accenture also entered into an agreement to purchase Pillar Technology, a Columbus, Ohio, smart embedded software company. Pillar Technology develops embedded software used in smart connected products such as autonomous vehicles, according to Accenture.
Smart connected products embed software, sensors, RFID tags, microprocessors and other smart elements. Those components, coupled with wireless and other connectivity options, let the products connect to the user, manufacturer or other products. The internet of things may serve as the communications backbone for smart connected products. Continued »
A global study of the SMB business segment suggests MSPs should be investing in cybersecurity expertise and services.
Published last week by IT management software firm Kaseya, the study polled more than 1,200 IT professionals at companies with 5,000 employees or less. Among the study’s findings was that one in three SMBs suffered a data breach in the last five years, with about one in 10 experiencing a breach in the last 12 months. Fifty-four percent of respondents cited strengthening IT security as a top priority for 2018 – a 14% increase compared with Kaseya’s 2017 survey of SMB IT operations.
“One of the areas that we see a huge amount of opportunity [for MSPs] is that the market is underserved in terms of security, awareness and protection. Security is multilayered. It’s everything from endpoint security to user security to even network monitoring, because breaches are becoming more and more common in the SMB world,” said Frank Tisellano, vice president of product management and design at Kaseya.
Fifty-eight percent of SMB business respondents said enhancing security will be the No. 1 IT priority for 2019, overshadowing other SMB technology objectives, according to the study. Thirty-one percent of respondents cited reducing IT costs as a top priority, while 28% pointed to regulatory compliance.
The Kaseya study also showed that of the SMBs that had a data breach in the past 12 months, 45% experienced two to four outages of five minutes or more. SMBs, however, are tackling outages with backup and disaster recovery strategies, Kaseya said. Ninety percent of SMB IT professionals said they back up their servers. Sixty-nine percent back up servers both locally and onsite. Additionally, about 40% of respondents said they use automated disaster recovery and have a formalized business continuity and disaster recovery plan. Respondents on average use four backup and recovery products.
Disaster recovery and security go hand in hand, Tisellano said, because they both focus on managing risks. He added that the SMB business segment is looking to invest more in these areas, especially as IT becomes increasingly more central to their businesses. “The risks that you are looking to mitigate with [security] tools and with backup is getting higher, and so businesses are willing, and frankly starting to be required, to keep their businesses safe in new and comprehensive ways,” he said.
Tisellano noted that Kaseya has been busily investing in its security and disaster recovery software capabilities. Recent examples include the vendor’s merger with Unitrends, a disaster recovery company, in May. “We are going to continue to make huge investments” in security and disaster recovery, he said.
If you attended the recent DattoCon 2018 event, it’s dollars to donuts you heard about near-term opportunities in the small and medium business (SMB) market.
Managed service providers (MSPs), however, also got a peek of what might transpire a bit further down the road. Ian McChord, vice president of product management at Datto Inc., outlined five potential directions for MSPs attending the data protection and MSP business management software vendor’s annual partner conference:
- Proactive management
Currently, customer pain — a server failure, for example — is typically what spurs an IT services provider into action. McChord suggested analytics and improved diagnostic data will shift the MSPs’ focus from reactive to proactive management. He said diagnostic capabilities, as part of an MSP’s toolset, are still in their infancy. But those features will have plenty of data to explore once they mature: McChord said remote monitoring and management tools already collect large amounts of data, but most of it remains untapped. Eventually, MSPs will be able to measure how many customer issues they manage proactively by determining the percentage of tickets generated through automated means versus end users.
- SaaS application management
McChord pointed to increasing use of SaaS among businesses as a form of shadow IT and a potential regulatory compliance issue. He pointed to the example of a hypothetical company that loads customer data into a newly purchased SaaS-based automated marketing tool, but lacks any sort of governance plan. “There is no backup strategy, no administration strategy and nobody is looking at who has access to customer data,” he said. For an MSP, the current situation will open future opportunities to provide SaaS application management, which he believes will be bundled into what some MSPs offer today as virtual CIO, or vCIO services. SaaS application management could also fall under the umbrella of a cloud governance service.
- User-centric backup
At DattoCon 2018, McChord said he expects to see a data protection paradigm shift as the current emphasis on backing up individual technology components gives way to “backup by user, not infrastructure.” The conventional thinking on protecting data on a laptop or other endpoint device ignores the reality that an employee’s data could just as easily exist in a SaaS application. The trend, McChord suggested, will be toward backing up a user’s data — wherever it lives.
- Home office IT
The growing ranks of employees who work full-time or part-time from home may also spark MSP opportunities. McChord called working from home the “Wild West of IT,” noting that companies’ work-from-home policies have little to do with IT policy. He said home-based employees may lack a standard set of IT tools and miss the mark when it comes to adequate home office security. MSPs have a chance to create a home-office package for businesses that don’t have the time to think about what a remote employee’s desk should look like, how it should be linked into the corporate network and how to provide security around it.
- Physical access control
Many MSPs attending DattoCon 2018 are likely to be already involved in providing customers some level of digital security. But physical security may not appear on the list of services. McChord believes digital and physical security should be linked in some way, noting that access to customers’ offices may be less secure than access to their mobile devices.
What’s life like in the Apple Authorized Service Provider program?
The example of ComputerCare, a computer repair and IT consulting firm with offices in Santa Clara, Calif. and Seattle, sheds some light on that topic. ComputerCare has been an Apple Authorized Service Provider, or AASP, since 2008. The company also provides warranty service and repair for Lenovo, Toshiba and HP products.
Company president Georgia Rittenberg said the scope of ComputerCare’s Apple repair business extends to all of the company’s products, including the iPhone. In 2017, Apple chose ComputerCare for a program that lets it manage iPhone repairs and calibration at the AASP’s location. Typically, such repairs would take place in an Apple Store. But customers can walk into ComputerCare’s office for an iPhone fix, rather than making an appointment with an Apple Store’s Genius Bar.
“We’ve had an additional influx of customers because of our ability to have faster turnaround time for iPhone repairs,” Rittenberg said.
Consumer and business services
The iPhone/iOS business has generated consumer walk-in traffic, but businesses in the San Francisco Bay Area and Seattle are also looking to get iOS devices repaired.
“We have seen an increase in those corporate accounts providing mobile devices to employees as part of the onboarding process, so we have seen an increase in corporate business,” Rittenberg said.
For business clients, ComputerCare offers free pickup and delivery for Apple devices and the other hardware brands it services. That’s no small consideration in the Apple world.
“So, instead of the IT person having to take five laptops and make five different appointments at the Genius Bar, we send a driver to pick up the equipment,” she said.
In addition to supporting laptop repairs, the pickup service also makes life easier for businesses that need to repair iMac all-in-ones or Thunderbolt displays, which they would otherwise have to lug into an Apple Store.
“People really appreciate that,” Rittenberg said.
ComputerCare’s Apple repair service has carved a niche among midsize companies that haven’t hit the purchase threshold at which Apple will provide an onsite warranty solution. “There’s not a ton of options for those mid-level companies, she said, noting such business either take their equipment to an Apple Store for service or ship their gear to an Apple depot for repair.
Rittenberg estimated about half of the company’s Apple support customers fall in the mid-sized business category.
Apple Authorized Service Provider program levels
A look at the Apple Authorized Service Provider program structure places ComputerCare in a broader context. AASPs, in general, are companies that provide repair services to consumers and businesses. Companies with full AASP status are authorized to repair Apple gear for any customer. Limited Service Providers, however, are restricted with regard to the products they may service and customers they serve.
Apple Premium Service Providers, meanwhile, occupy the top tier of the AASP program. Companies must meet Apple’s requirements from both a technical and customer service standpoint to become a Premium Service Provider. To document their adherence to those requirements, program participants survey customers on subjects such as how well technicians carry out repairs, how quickly those repairs are made and the technicians’ ability to answer customer questions.
ComputerCare maintained Apple Premium Service Provider status for 2016 and 2017, narrowly missing out in 2018. Rittenberg said the company has “set some goals to work toward … to qualify for next year.”
Filling the gap
Apple, working with companies within the Apple Authorized Service Provider program, has been able to expand the availability of repair services to business and consumer customers. Rittenberg said Apple is making its customers aware that service providers are available as an alternative to a Genius Bar appointment.
“There are limited ways to get service on your device and sending [customers] every time to the Apple Store isn’t a solution,” Rittenberg said. “I really value the way Apple has partnered with their service providers. They really do view them as a partner and understand service providers are very important to the market and filling that gap.”
IBM is spurring partners to win more deals in the storage market, specifically around its software-defined storage and all-flash array products.
The company this week introduced a new set of sales performance incentive funds (SPIFs) for its storage systems and software portfolio. IBM said the incentives are the latest move in the transformation of its channel strategy and partner program. Earlier this year, IBM overhauled its incentives programs for hardware and software.
“As we all know in the competitive, demanding space around storage, as a lot of [IBM partners] and a lot of our clients continue to focus in on the cloud and the migration to the cloud, storage is a huge piece of that business model,” said John Teltsch, general manager of global business partners at IBM.
He described the new SPIFs as part of “the rolling thunder” of IBM’s “incremental incentive changes to our partner channel.”
The incentive program provides eligible partner sellers and system engineers with up to $100,000 in SPIFs that they can earn annually.
- New clients: Partner reps can earn 3% of the deal size, up to $30,000 per rep, per deal with a new client.
- All-flash arrays: Reps can earn 1% of the deal size, up to $10,000 per deal, split between reps.
- IBM storage hardware and Spectrum software: Up to $20,000 per deal based on deal size, split between reps.
- New deal registrations: For registering an opportunity of $100,000 or more, reps can receive $500, split between reps.
IBM added that the storage SPIFs are stackable, which lets partners bundle multiple incentives on each deal for greater financial payout.
According to Eric Herzog, chief marketing officer of worldwide storage channels at IBM, the global market for external storage systems and software, while about $40 billion in size, is relatively flat. However, he noted software-defined storage and all-flash arrays are growing market segments.
“Certain markets are shrinking: hard drive arrays, hybrid arrays, management software for devices,” Herzog said. “While we do offer those, our focus is on flash arrays and software-defined storage. Those are growth markets, and we’ve wrapped these incentives around those market engines.”
The SPIF program will run until the end of the calendar year and are open to all IBM business partners, regardless of their program tier levels, in North America, Western Europe and Latin America. IBM said it will roll out storage incentives in other geographies, adapted to countries’ local laws and customs, later this quarter.
MSP tools play a pivotal role in a managed service provider’s business.
A mix of off-the-shelf and home-grown tools help MSPs deliver services to their customers. Using automated tools to remotely monitor and manage clients’ IT assets is really the essence of what an MSP does. The MSP industry couldn’t exist without MSP tools.
And with the growth of the managed service customer base, the need for automation only intensifies. A recent Datto survey on MSP marketing and business issues showed more than 40% of the 2,300 MSPs polled have more than 100 clients, compared with only 27% reporting that customer volume in 2017. MSPs rely on software tools to support that number of customers capably and profitably.
But one can have too much of a good thing and that holds true for MSP tools. Virteva, an MSP based in Minneapolis, had been using four different tools to monitor its customers. That collection of monitoring products added complexity and expense and also made it difficult for Virteva to obtain a complete picture of its customers’ IT infrastructures.
Steve Griffiths, COO at Virteva, said the company decided to replace its mixture of monitoring wares with a single platform from LogicMonitor. That vendor’s monitoring technology is now part of an application stack that sits on top of ServiceNow, which Virteva adopted a few years ago to serve as the backbone of its operations.
“It was a nice consolidation play,” Griffiths said, referring to the shift from multiple MSP monitoring tools to a single source.
Consolidating MSP tools improves visibility
Griffiths said such consolidation moves streamline a company’s operations and usually reduces costs. But the greatest advantage of adopting LogicMonitor has been unified monitoring and the improved visibility that it provides.
“The big one is when you can see everything under one roof,” he said. “You get the benefit of connecting the dots across customers … and breaking down the silos of data.”
LogicMonitor’s ability to centralize monitoring paid off when a major hack emerged and Virteva needed to check for patches across its customers’ IT systems. Matt Kerfoot, infrastructure technician at Virteva, said the company created a custom DataSource for LogicMonitor that scanned clients’ systems and flagged those missing the patch. He said the scanning task took one hour using the DataSource, which is a LogicMonitor template that determines what data to collect and what values should trigger alerts.
“I really like the custom DataSources,” Kerfoot said. “We monitor so much stuff that doesn’t get monitored out of the box.”
The ability to sniff out potential problems before they affect customers is in line with Virteva’s overarching philosophy, Griffiths suggested. He said CIOs face the challenge of dealing with security threats and the day-to-day grind of addressing problems that crop up throughout the IT infrastructure. Virteva’s approach, he said, is to prevent trouble from ever happening in the first place.
“We believe that the old way of being an MSP is going the way of the dodo,” Griffiths said. “No longer can somebody … outsource, say service desk or infrastructure management, and just say, ‘You guys take it and you handle my mess for less money.’ ”
Griffiths said that way of doing business leads to labor arbitrage, which he termed a losing proposition. The alternative approach Griffiths endorses is proactive management and continuous improvement.
“That best support experience one can have is not to have one at all,” he said.