MSPs join hands to survive

The old adage "two heads are better than one" could define the current state of the management service provider industry.

As MSPs grapple with market acceptance, many are looking to complement one another's offerings through partnerships.

HiFive.net and IBM are tapping partners to expand their respective footprints in the MSP arena at the same time that more than a dozen MSPs are launching a consortium to encourage even more partnering.

HiFive this week will announce an agreement to integrate NetIQ's AppManager application management software into HiFive's suite of management software, delivered via the MSP model.

This will add application monitoring and reporting to HiFive's already broad management of IT infrastructure components.

HiFive manages components ranging from routers to security to desktops.

To achieve the integration, HiFive and NetIQ, rearchitected NetIQ's deployment model to match that of HiFive. They also added encryption to get data from AppManager to HiFive's NOC (network operations center) for analysis and reporting and to make it accessible to customers over the Web, according to David Greene, vice president of marketing at HiFive.

The offerings include application and server assurance services and cover management of Microsoft's Windows NT, Exchange and SQL Server as well as Oracle databases and Web servers. The services provide monitoring, problem notification and a single Web interface for trouble- shooting reports. Users can also launch corrective actions through the Web interface.

The capability to manage remotely over the Web is attractive to Maureen Data Systems, which wraps its professional services around HiFive's MSP offering.

"Managing the application server over the Internet from anywhereâ€"I think that's the direction you will see for small and medium[-size] businesses or larger companies that need an extra pair of hands or eyes," said Stewart Lande, director of new business development at Maureen.

In delivering its MSP service offerings through consultants and resellers, HiFive is taking an approach similar to that of Silverback Technologies and TriActive.

But unlike those MSPs, HiFive took an all-software approach to its service offering.

"We deploy and collect over the Web. We don't use on-site hardware; we use intelligent agents installed on [a customer's] existing infrastructure," HiFive's Greene said. "We don't use a VPN [virtual private network]; we encrypt data for transmission to our NOC."

The HiFive-NetIQ partnership follows an announcement late last month from IBM and MSP NetSolve. That deal calls for IBM Global Services to sell NetSolve's ProWatch suite of managed network services. IBM also recently partnered with SiteRock in a deal that calls for IBM Global Services to market and implement SiteRock's infrastructure management services under the IBM brand as part of IBM's e-business managed services.

As MSPs struggle to gain acceptance and achieve profitability, partnering may be the only way to achieve those goals, said Martha Young, an analyst at Enterprise Management Associates.

"For any company with holes in their suites, customers only want a single point of contact, a single contract, single SLA [service-level agreement]. They don't want to have to deal with multiple vendors," Young said. "But the partnerships have to be more than just marketing if they are to survive."

The Global MSP Network consortium, announced last month, was formed to help MSPs improve their businesses, rather than educate the market, which is the mission of the MSP Association. The GMN group numbers at least 18, and its goal is to have 35 MSP members representing 1 million users by year's end.

"In an association like this, members can share ideas and their know ledge base. And where they have a technology shortcoming, they can fill in so that they are a single point of contact," said Paula Passey, president of the board of directors for the GMN and a product manager in Intel's services division.

Although HiFive is not a member of the GMN, it might find synergies with early members, said EMA's Young.

"If HiFive were to partner with Voyus [Canada] in [Vancouver,] British Columbia, what they would get is access into the Canadian market, an existing account base they could add management services into, plus Voyus would have access to the HiFive customer base and provide services that HiFive doesn't offer," she said.

Although a handful of pure-play MSP startups appear to be gaining ground, "most will probably go out of business," the GMN's Passey said. "The most successful members within GMN will be the ones that actively reach out and partner with others in the MSP ecosystem."

"An MSP, if they have the right suite, can really provide a valuable service. I think that model is going to be around for a while," said Tom Guidry, director of IS at WNYC, a National Public Radio station.

Guidry is a HiFive user.

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