While managed service providers continue to struggle with marketing, the list of vendors committing to the channel sales model continues to grow; more news from the week.
By
John Moore and Spencer Smith
Published: 20 Apr 2018
Marketing, for MSP companies, continues to prove a struggle.
That's one takeaway from a newly released survey from Datto Inc., a Norwalk, Conn., data protection vendor that sells through managed service providers (MSPs). The company's second annual State of the MSP survey polled about 2,300 companies worldwide.
Marketing and sales emerged as the top MSP challenge revealed in the survey, with 53% of the respondents citing that area as a tough task. MSPs rated marketing and sales over staffing and training, growing pains, and even Ransomware and cybersecurity as a test for them.
Service providers have been identifying sales craft -- or the lack thereof -- as a pain point for a number of years. Austin McChord, CEO at Datto, suggested the problem with marketing for MSP firms is insufficient focus.
"So much of this comes down to dedicating time and resources," McChord said. "Almost every MSP I talk to wants to do better in sales and marketing, but they rarely are resourcing those areas of their business correctly. Sales and marketing take time and effort, and that can take away from the time an MSP has for its customers."
While marketing for MSP companies endures as a challenge, many continue to offer break/fix services -- a line of business that runs counter to the service provider goal of monthly recurring revenue streams. The Datto survey revealed that 75% of MSPs continue to offer break/fix services.
Almost every MSP I talk to wants to do better in sales and marketing, but they rarely are resourcing those areas of their business correctly.
Austin McChordCEO, Datto
"I think there will likely always be some break/fix at smaller MSPs," McChord said. "Turning revenue down is always hard. The key for MSPs is for them to recognize that the value in their business comes from the recurring services that they offer, and that should always be their main focus."
On a positive note, McChord cited MSPs' expanding customer bases. He said more than 40% of the respondents to this year's survey said they had more than 100 clients. In 2017, that figure was 27%.
"This shows that businesses are turning to MSPs more and more and that it's a large and growing market," he said.
Kerauno launches partner network
Kerauno, a company that markets a communications workflow platform, has launched a partner network featuring sales, professional services and developer programs.
Participants in the sales channel program are certified to sell licenses for the Kerauno communications workflow as a service platform. Partners in the professional services program, meanwhile, design, build and manage customers' business workflows on Kerauno. And the developer program lets participants use Kerauno's APIs, interfaces and other resources to build applications and services that integrate with the communications workflow platform, according to the company.
Partners in each program can collaborate with each other -- a professional services partner working with a sales partner that covers the licensing aspect, for example. A partner may also attempt to qualify to participate in each program.
Kerauno is recruiting partners as it pursues its three-part channel sales model. Josh Ross, CEO of Kerauno, said the company has six partners in the sales channel, four in professional services and two in the development segment of the Kerauno partner network.
"Our goal is to be 100% through the channel by the end of this calendar year," he said.
Cofense commits to 100% channel sales strategy
Phishing security vendor Cofense has revamped its global partner program to reflect the company's shift to a 100% channel sales model.
Cofense has a partner base of about 300 resellers and distributors globally, including well-known players CDW and SHI International Corp. Although last year the company derived 35% to 40% of its business through partners, Cofense's leadership decided that a 100% channel sales strategy was the approach it wanted to take for future growth.
"It was clear that moving to a 100% [channel] approach is a great way for us to scale the business," said Gordon Lawson, global senior vice president of sales at Cofense.
Cofense's shift in sales strategy is in line with broader change occurring at the vendor. Cofense earlier this year changed its name from PhishMe, which Lawson said was partly to signify that the company's portfolio had expanded outside its flagship phishing security awareness product. "Over the last couple of years, we released a couple [of products] that focused more on not just security awareness, but that SOC [security operations center] and IR [incidence and response] buyer," he said. The portfolio includes Cofense Triage, an incident response platform, and Cofense Intelligence, a phishing threat intelligence platform.
In an effort to attract more partners internationally, the vendor's updated channel program offers new incentives, lead sharing and marketing programs. As Cofense transitions its sales model, Lawson said the company will maintain its direct sales team to support product demos.
Lawson noted that one of the challenges of shifting to a channel sales model is the internal education involved. "When you go channel from a purely direct model, there are hits to margin that sometimes can be reflected in an individual sales rep's commissions. But I think every company that goes through this transition experiences that," he said. "The channel is so key to [Cofense's] growth … some small hits to margin for your outside reps is OK."
Other news
Cloud integration provider Dell Boomi has revamped its global partner program. The program introduces a four-tier structure -- Authorized, Advanced, Select and Elite -- and a Partner Integration Accelerator Program to help partners gain experience while using Boomi's best practices, the vendor said. Boomi also launched a new partner portal that offers training, sales and marketing materials, implementation guides and support.
Diamanti Inc., a bare-metal container platform vendor based in San Jose, Calif., kicked off a VAR program for partners building data center services on top of Linux containers. The VAR program includes technical training, sales materials, not-for-resale discounted units, deal registration and sales performance incentive funds. A Diamanti survey found 43% of channel companies are working with Docker, while 31% of partners are working with Kubernetes. The survey polled 130 resellers, VARs and MSPs.
Private equity firm Vista Equity Partners purchased a majority stake in LogicMonitor, a vendor of a cloud-based performance monitoring platform used by service providers. According to a statement by Alan Cline, principal at Vista, Vista will accelerate LogicMonitor's product investment and growth trajectory. Vista's portfolio of companies includes a number of channel players, including data protection vendor Datto. The LogicMonitor transaction is expected to close this quarter.
ConnectWise Inc., a Tampa, Fla., company that makes businesses software for technology providers, said its Unite cloud management product is now available. The offering lets technology teams manage, monitor and bill a range of cloud-based solutions, according to the company. Last year, Cisco took the wraps off a pilot program for ConnectWise Unite, in which Cisco partners were able to use Spark, Meraki, Umbrella and Stealthwatch through the ConnectWise management console.
Competitive advantage is the top reason IT decision-makers modernize their application platforms, according to a new survey from KMS Technology, a software development consulting firm based in Atlanta, Ga. Sixty-eight percent of the respondents said they pursued modernization projects because they felt doing so would bolster their competitive edge. In addition, 58% of survey respondents cited minimized maintenance costs as the motivation to modernize their platforms, while 55% identified increased customer adoption and 54% cited a need to overcome the limits of technologies used in legacy applications. The survey polled 152 respondents.
CoreStack, a vendor based in Bellevue, Wash., said its cloud governance enterprise platform is available to cloud solutions and managed services providers through Microsoft's third-party offers program.
PagerDuty, a cloud company that offers a digital operations management platform, unveiled a global reseller program for targeting global enterprise customers. Through the program, partners can tap enablement resources such as sales and technical training programs. The program's partner roster currently includes solution provider SHI International.
ScanSource Inc., a distributor based in Greenville, S.C., has added Digium Inc.'s telephony hardware and software to its roster of unified communications products.
Optiv Security Inc., a security solutions integrator, rolled out a reference architecture called SecureData@Optiv that focuses on the deployment of secure data lakes.
Commvault Systems Inc., a backup and disaster recovery vendor based in Tinton, Falls, N.J., rolled out expanded offerings via the Amazon Web Services Marketplace. The offerings are geared toward U.S. government agencies, systems integrators and private sector contractors, according to the company.
Grupo Datco, a telecommunications and IT provider in Argentina, is partnering with SkyFidelity Inc.'s Tri Cascade subsidiary to market the latter company's IoT technology in South America.
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