I have written (and spoken) on this topic a lot but only now, in early 2011, can we look back and have some specific case studies to analyze and discuss. Since this is an emerging area of study I would really like to hear some feedback from all of you. Right or wrong, this is an important issue and it impacts all of us in some way or another.
First, are there any examples of vendors buying a MSP practice in recent years? Yes there are. But, before we begin we should clarify some terminology. I use the term vendor to mean any company (hardware, software, services, doesn't matter) who sells into the IT channel. MSP (for purposes of this blog) means any service provider selling direct to the end-user. There are a number of deals that have happened in the last few years that would fit this description.
Cisco buys NetSolve (2004) - Before the SMB managed services boom years, Cisco's deal with NetSolve should have signalled everyone in the channel that managed services was not just for the service providers. I remember seeing a few articles in the channel publications at the time raising the issue of channel competition. Obviously, nothing ever came of it and to Cisco's credit, I don't believe they ever put that acquisition to use against the interests of their own channel.
CDW buys Berbee (2006) - This deal happened a few years back and was really ignored by the SMB side of the channel but it was probably one of the first distributor plays to get into the managed services profession. Around the same time, the other distributors took a completely different approach by trying to educate and turn their resellers into MSPs...a move I don't believe has been very successful.
Konica-Minolta buys All Covered (2011) - This deal was just announced recently and we haven't seen yet how it will be playing out. However, this deal represents a fairly mainstream hardware vendor (with a very recognizable end-user brand) making a play in managed services by buying a MSP practice. If you were a cynical reader (and a few of you have told me your opinions) you may think this is a bridge being built by Konica to deliver IT services and other products to the end user community. While there is nothing wrong with this it does beg the question whether other vendors will believe this is the model to follow. If that happens, will we start to see all managed services turned into a front for hardware/software sales?
The question (for all these deals and the many others not mentioned here) is to what end? How will these vendors put these managed services businesses to use? Does this bring the vendors one step closer to the end user? Should this concern existing MSPs at all?
These are all ongoing questions that will likely have no immediate answers. MSPs should be aware of these trends and should have an opinion, or at least have thought about it. I will leave you with one parting thought. He who owns the client relationship wins. So far, MSPs have that luxury today but will they hold on to that advantage?
