From The Expert Feature Article
August 06, 2013

Channel Vet Sees Love Blooming Between MSPs and Integrators

Larry Walsh has been covering the channel long enough to know a thing or two (or three). Now Walsh is seeing a trend, a deep and abiding love growing between large integrators and managed service providers.

Key to his argument is a deal recently covered by MSP Today between FusionStorm and Synoptek.

Under the deal, two partners are joining their managed services and cloud businesses. The combined offerings will be sold under the Synoptek brand, and Synoptek funneled some money FusionStorm’s way for the privilege of carrying its service wares.

“This partnership with FusionStorm will optimize our delivery of managed IT services and strengthen our portfolio of private, public and hybrid cloud options to accommodate a strategic, high-performance customer base,” said Tim Britt, CEO of Synoptek, last week. “We will be able to establish a strong global footprint for delivery, scalability and high-availability solutions, and tap FusionStorm's expertise to fuel growth across a broad portfolio of enterprise IT offerings.”

So what does channel maven Walsh think of all this? Writing on his site Channelnomics, Walsh said, “The FusionStorm-Synoptek deal is one of several managed and services initiatives recently announced by large systems integrators. As more enterprise and midmarket companies look to shift their investments from on-premises infrastructure to cloud and hybrid assets, systems integrators are adjusting their models, products and value propositions.”

Walsh points to the move into managed services by Presidio as another example of a systems integrator feeling the MSP love.

MSP Today likewise took notice of the new Presidio managed services.

Presidio Managed Services now include Collaboration Services, Data Center Services, IT Security, Network Services, Service Management and Workplace Services.

As you see, Presidio has a lot to offer and it can get a bit complicated. Under each of these categories, for instance, individual components can be bought separately or they can be bundled into a fuller service.

That’s not all. The company has no less than 23 separate service modules that can be mixed and matched, combined and bundles into custom solutions.

Managed services may be core to Presidio’s business, but they are far from all the company does.

Other services include consulting, cloud and hosting, deployment and integration, financial services, operations support and telecom, among others.

More Evidence

Other pieces of Walsh evidence?

  • FishNet Security acquired Logic Trends
  • Logicalis (News - Alert) is expanding its MSP footprint a new program aimed at smaller service providers

So what is driving all the action? Money. “In general, managed services are the most profitable offering in the channel. Solution providers across the board earn as high as 70 percent gross margins on various managed services packages. And well-oiled managed services practices generate predictable revenue and profitability, which helps with cash flow, planning and company valuations,” Walsh explained. “Deals like FusionStorm-Synoptek and initiatives like Presidio show the managed services opportunity isn’t lost among larger systems integrators. They see managed and cloud services converging, opening tremendous potential for sales and deeper customer engagements. It’s evolution in real time.”

MSPs Merge amongst Themselves

While systems integrators are sometimes buying their way into the MSP game, MSPs are strengthening their offerings by buying other MSPs. Don’t believe it? Here’s a quick rundown of the action to set you straight.

The most recent deal, though not huge, is Infinity Network Solutions buying Giddens Network Services.

Earthink also just shelled out $22 million to buy MSP CenterBeam.

While Earthlink (News - Alert) was making its move, Accumuli was accumulating MSP Signify Solutions, which does two-factor authentication (2FA).

OnX Enterprise Solutions bought its way deeper into both the disaster recovery and managed hosting markets by snapping up Worknet, which also has remote monitoring and management (RMM).

OnX also bought itself a fair bit of capacity as Worknet totes along two SSAE 16 data centers.

OnX has already mostly digested Worknet, having based much of its new OnX Managed Services business on the Worknet work. This new unit is a blending on existing OnX services and the ones acquired through Worknet.

Recently, consumer security powerhouse AVG, which is also an MSP force, bought LPI (News - Alert) Level Platforms, a Canadian RMM maker. This way AVG reckons it can offer MSP an integrated solution where the client security is monitored and managed remotely. Basically it creates a more turnkey managed security service.

Finally, the biggest piece of news has to be SolarWinds (News - Alert) spending $120 million to buy N-able.

Edited by Alisen Downey