MSP Superguide to BuSineSS Growth/media/4AC8311E2B2542748A388E39567F347… · 2 MSP Superguide to Buuiieuu nroetG money from—customers. Some of the add-ons are longtime MSP favorites

CONTENT PROVIDED BY February 2014 RCPmag.com

This special report brings together recent Redmond Channel Partner coverage pointing to shifting technology and business opportunities for MSPs.

MSP Superguide to BuSineSS Growth

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Add-on Opportunities for MSPs .............................................. 1

MSP’s GUIDE to Integrating Security ....................................... 6

Partner’s Guide to Staffing for MSP Growth ........................... 11

Partner’s Guide to Office 365 ..................................................16

Partner’s Guide to Supercharging YourPower Management Sales ..................................................... 22

Partner’s Guide to Content Management ............................... 27

table of Contents

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Managed services is a business model more than a set of tools. That said, the use of remote monitoring and management (RMM) externally with customers and professional services automation (PSA) tools internally

to run the practice has long served as a widespread and common definition for managed services providers (MSPs).

While running an RMM within customers’ environments remains a key predictor of MSP success, much more is required. “Gone are the days of only remote monitoring and patch management,” says Stuart Crawford, a longtime MSP who currently consults with MSPs through his firm Ulistic Inc. If RMM is all that an MSP offers, a customer can compare your price against Dell Inc., Crawford says. Another option MSPs must be wary of, according to Bob Godgart, founder of Channel-Eyes, is the ad-supported RMM offering from Spiceworks Inc.

“I just don’t think MSPs that are focused [only] on RMM and patch management are going to be successful on that going forward,” Crawford says.

For MSPs looking to branch out, there’s an ever-changing mix of add-on services, technologies and business offerings that they can take to market alongside the RMM to enhance their value to customers.

We spoke to a number of industry experts to get a snapshot of some of the hottest opportunities for adding value for—and earning more

For MSPs looking to branch out, there’s an ever-changing mix of add-on services, technologies and business offerings that they can take to market.

Top ways for MSPs to add value and revenues range from standards such as business continuity and security, to newer approaches like mobile- device management and bundled consulting.BY SCOTT BEkkER

Add-onopportunitiesfor MSPs

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MSP Superguide to Business Growth

money from—customers. Some of the add-ons are longtime MSP favorites with a slight twist or two, while others are brand-new.

1. Backup and recoveryBackup and recovery is an oldie but goodie. Almost as long as IT companies have been calling themselves MSPs, they’ve been adding backup and recovery to their product portfolios. None of which is to say they’ve always done it well or that the offerings haven’t changed drastically. MSPs selecting backup and recovery have more options now than ever before, with mixes of on-premises, cloud and hosted backup.

One thing that has changed is there’s more focus now on “restore” than backup or recovery, driven in large measure by customers’ all-too-common experience of having systems backed up and failing to get their data back in cases of disaster. Call it what you will—disaster recovery or business continuity, Crawford offers one other caution.

“If I was going to be running an MSP again, I would definitely focus on the business continuity play. I probably wouldn’t want to align myself with one particular vendor. My biggest concern is where is the liability if the recovery fails? If there’s an earthquake and the datacenter is on the same fault line, it’s gone, too,” Crawford says.

For that reason, backup/recovery may be one of the best cases for acting as a virtual CIO, advising customers on their technology options and helping them select by setting up vendor demonstrations. “I would pick two or three players, and represent them all,” Crawford says.

2. Mobile-Device ManagementDave Sobel, director of partner community for LPI Level Platforms Inc., gets really excited about mobile-device management (MDM).

“It intrigues me to no end that no one is talking about it,” Sobel says, with only slight exaggeration, about MSPs in general. Like other RMM vendors, Level Platforms offers MDM. “We have mobile-device management as part of the stack. The customers want it. The problem is the solution provider in the middle.”

Sobel’s theme was the same earlier this year when he provided a 2012 Marching Orders entry for Redmond Channel Partner magazine. At the time, Sobel wrote:

“My big idea is simple: Don’t focus on the wrong thing. Cloud computing is getting an amazing amount of buzz, and the channel has focused considerable energy on this opportunity, which looks big. I’ve heard numbers from $160 billion to $200 billion. Mobility, which is

“If I was going to be running an MSP again, I would definitely focus on the business continuity play.” Stuart Crawford, President, Ulistic

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generating less buzz, looks to be an opportunity of $1.2 trillion. By my math, mobility is thus roughly six times larger—but generating so much less noise. Don’t fall for the noise: Focus on what’s really important, which is delivering a consistent user experience across any device. That’s the real opportunity, and what users are clamoring for.”

Sobel says that so far, MSPs don’t seem to be paying much more attention now to MDM than they did back in January. He says the situ-ation is the reverse of managed services originally. “This is something end users are asking for. They didn’t ask us for managed services,” says Sobel, who ran his own MSP for years and spent time convincing small to midsize businesses (SMBs) of the value of the MSP model.

Scott Gode, vice president of product management and marketing for Azaleos, agrees about customer demand. “We’re adding mobile-device management to our portfolio of services because we’re seeing it being asked for. Every single customer we talk to has got more and more iPhones, Android phones and Windows Phones coming into their environment.”

Sobel says the key to MDM sales for MSPs is to focus on the larger numbers. “Talking about configuring one iPhone is not an interesting conversation. Everyone knows how to make their own phone secure. It’s when you ask, ‘Are you sure your 49 employees are also doing that?’ that the discussion becomes compelling.”

3. Bundled ConsultingThe opportunity to act as a virtual CIO is a business-model decision, somewhat akin to the initial step of becoming an MSP. Whether an IT services company adopts the model wholesale, or chooses to remain in the market as a more traditional MSP, though, there’s still an opportu-nity around packaging up some consulting services.

Crawford is seeing some of his clients add consulting hours to their managed services packages. “They’re adding consulting services. Some are adding a few dollars per seat for doing that—$10, $15, $25 a month depending on the market. Some are charging by the hour.”

The consulting services can be a nice revenue add-on for current MSPs, and a way to test the waters for a virtual CIO approach. For the full business model changeover, the branding can vary from virtual CIO to trusted advisor to Crawford’s preferred trusted technology consultant. “They help guide the leadership group, and they’re selling consulting as an additional service. They’re going to a small business, say 25 employees, and taking care of all the IT for $5,000 a month. That includes everything. Help with your ISP,

The opportunity to act as a virtual CIO is a business- model decision, somewhat akin to the initial step of becoming an MSP.

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consult on a bi-weekly basis for an hour. They’re figuring out ways to provide that higher-level touch.”

4. Virtual help DeskOther MSPs are aligning themselves with virtual help desk services. One client of Crawford’s in Canada is leveraging LiveVHD’s Service Level Agreement (SLA) of 90 percent of calls answered in 90 seconds or less. “He’s taking that SLA and just running with it. Nobody else has the guts to put that type of guarantee out there. First of all, they don’t trust the outsourced help desk. Nobody ever calls him on his guarantee, and he never presents it as outsourced.”

5. Virtual Desktop infrastructureOn the more complicated end of MSP opportunities is virtual desktop infrastructure, or VDI.

Azaleos’ Gode is seeing interest in the market. “Another opportunity that’s emerging is VDI, where customers are looking to utilize Citrix or technologies like that to virtualize the desktop to make those desktops easier to manage,” he says.

Gode has an important caveat for VDI. “Our model is we don’t talk to the end user, we talk to the IT department. If you’re talking to the end user, you’re getting more calls, and you’re getting more randomized calls like ‘Where’s the start button?’ In a VDI world, there’s an interesting dilemma. On the one hand, there’s a lot of value that you can offer, but there’s a lot of end-user issues that come up with VDI.”

It’s important to negotiate carefully with the customer (enterprises in Azaleos’ case) about which support calls the internal IT department takes versus which ones the MSP takes.

The promise of VDI has outstripped the market share for some time, especially among SMBs, where the infrastructural hurdles to VDI deployment are substantial. However, newer offerings, such as the Citrix VDI-in-a-Box, are starting to cut way down on costs and make the solutions more economical for even very small deployments.

Meanwhile, Microsoft is under pressure from the market to make VDI licensing options for Windows clearer and more affordable. Even for MSPs not ready to jump into VDI now, this is an area to watch.

6. SeoMany MSPs offer Web site services. Crawford notes that some MSPs are finding success by adding in search engine optimization (SEO) as

Microsoft is under pressure from the market to make VDI licensing options for Windows clearer and more affordable.

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part of their managed services plans. “There’s a lot of margin in that if you can figure out how to do SEO properly,” he says.

7. SecurityAnother standby for MSPs is security services. On top of the patch management that is the foundation of many MSP practices and a critical portion of the base management offering, security offerings commonly carried by MSPs can also extend to the desktop. Bringing antivirus, antispam, message filtering and other endpoint security measures is another way to deliver hands-free IT for customers.

Options for delivering the technology vary from low-tech sneaker-net-style deployments of AV software to security bundles from RMM vendors, including freemium options, to reselling dedicated security services from major security vendors.

8. Printer/Power ManagementPrinter management and power management are certainly different disciplines. What they have in common is that MSPs who embrace the model across the stack are starting to cover both printer and power management.

“The most successful guys are the ones that are now taking that managed services approach and taking it to the whole business,” says Level Platform’s Sobel. “They’re covering it all.”

9. Cloud ServicesAdopting the approach of taking managed services disciplines across the solution stack can help MSPs sell other products.

“The best MSPs are finding that by investing in managed services, they’re driving more product sales,” Sobel says. N-Able CEO Gavin Garbutt is seeing the same thing. N-Able is encouraging its network of MSPs to use its tools to find new add-on services opportunities and project work.

MSPs that adopt the model are finding themselves in a position to help deploy and build services around a number of cloud opportunities. Most prominent among those are Office 365, Dynamics CRM Online, Hosted SharePoint, Hosted Exchange, Hosted Lync and other VoIP solutions.•

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

On top of the patch management that is the foundation of many MSP practices and a critical portion of the base management offering, security offerings commonly carried by MSPs can also extend to the desktop.


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MSP’s GuiDe to

integrating Security

it’s hardly controversial to say that managing servers kept on-premises by small and midsize businesses (SMBs) might not be a sustainable business for managed services providers (MSPs).

More and more companies are moving to the cloud, and with megavendors such as Microsoft redirecting development resources from products like Windows Small Business Server (SBS) to cloud-based solutions such as Office 365, the writing is on the wall.

To be sure, the bread-and-butter business of managing servers for customers could last for a long time. Still, many MSPs are looking around for the technologies that will keep bringing them revenues and

With small and midsize businesses moving their back-end systems to the cloud, managed services providers are expanding their practices to cover security—a market niche that’s unlikely to disappear any time soon. BY SCOTT BEkkER

More and more companies are moving to the cloud. The writing is on the wall.

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profits for the next half-decade or more. Some of them are finding a new niche in security with an eye toward endpoint security, which will continue to be needed even if every SMB in the world were to go to the cloud for infrastructure services.

It’s not just good for MSPs to branch out in their practices. It turns out SMBs need to pay more attention to security than they have in the past.

SMBs under FireAccording to the 2013 version of the annual Symantec Corp. “Internet Security Threat Report,” the increased targeting of SMBs was among the most important security trends of the past year.

“Last year’s data made it clear that any business, no matter its size, was a potential target for attackers. This was not a fluke. In 2012, 50 percent of all targeted attacks were aimed at businesses with fewer than 2,500 employees. In fact, the largest growth area for targeted attacks in 2012 was businesses with fewer than 250 employees; 31 percent of all attacks targeted them,” the report stated.

“This is especially bad news because based on surveys conducted by Symantec, small businesses believe they are immune to attacks targeted at them. However, money stolen from a small business is as easy to spend as money stolen from a large business. And while small businesses may assume they have nothing a targeted attacker would want to steal, they forget that they retain customer information, create intellectual property and keep money in the bank,” the report continued. “While it can be argued that the rewards of attacking a small business are less than what can be gained from a large enterprise, this is more than compensated by the fact that many small companies are typically less careful in their cyber defenses. Criminal activity is often driven by crimes of opportunity. With cybercrimes, that opportunity appears to be with small businesses.”

rMM Vendors Push SecurityOver the last few years, MSP tool vendors have been nudging their MSP partners toward building out security components to their MSP practices.

Recently, for example, Kaseya International Ltd. embraced a freemi-um model to expand the customer base for its services.

The remote monitoring and management (RMM) tools vendor earlier this year released a set of five Software as a Service (SaaS) IT tools that are free solutions for specific IT headaches.

Kaseya goes to market in two ways—mainly through its 6,000 partners (mostly MSPs), and directly to corporate IT departments.

According to the 2013 version of the annual Symantec Corp.

“Internet Security Threat Report,” the increased targeting of SMBs was among the most important security trends of the past year.

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Liz Lederer, senior vice president of Kaseya field marketing channel programs, says the company believes the SaaS tools will help MSP partners add net new customers.

“Having these free tools now is actually a great thing for our partners because our partners can use them as door openers or for planting the seeds with some of their customers. There could be just a particular problem that they’re looking to solve. Or there could be a particular piece of our technology that they’re looking to add into their portfolio of management solutions,” Lederer says.

Gerald Beaulieu, vice president of product marketing at Kaseya, says the five SaaS IT tools are only an initial set—more will be coming.

“Our initial release is focused on auditing and security, because in many ways they kind of go hand-in-hand,” Beaulieu explains.

The first batch of tools includes File Share Audit, User Audit, Software Audit, Security Audit and Windows Patch Management. All of the tools require only an e-mail address to set up and can be used to manage up to 1,000 computers.

“We’re starting to carve out specific areas of our product that we can deliver to IT professionals or that our channel partners can sell ultimately to

Don’t Let Your Customers Become watering holesOne of the most significant new threats of the last year has small business-es and other poorly secured organizations at its heart—although their data is not the target. The phenomenon is called a watering hole attack.

According to the “2013 Internet Security Threat Report” from Symantec Corp.:

“The biggest innovation in targeted attacks was the emergence of watering hole attacks. This involves compromising a legitimate Web site that a tar-geted victim might visit and using it to install malware on their computer. For example, this year we saw a line of code in a tracking script on a human rights organization’s Web site with the potential to compromise a computer. It exploited a new, zero-day vulnerability in Internet Explorer to infect visitors. Our data showed that within 24 hours, people in 500 different large companies and government organizations visited the site and ran the risk of infection.

“The attackers in this case, known as the Elderwood Gang, used sophisticated tools and exploit-ed zero-day vulnerabilities in their attacks, pointing to a well-resourced team backed by a large criminal organization or a nation state.”

To Symantec, small to midsize businesses are increasingly being used as pawns in watering hole attacks. Attackers are leveraging the often-weak security of small businesses to defeat the strong security of their partners and customers. —S.B.

“Our initial release is focused on auditing and security, because in many ways they kind of go hand-in-hand.”Gerald Beaulieu, vice president of product marketing at Kaseya.

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end customers that address specific pain points that they’re having with those organizations,” Beaulieu says.

“They may not need an entire platform to address the one issue,” he continues. “So what this does is it says, ‘Hey, let’s address that pain point through a tool.’ It could be a free offering; it could be a paid offering. Get them in the family, let them see the benefits we can offer, and then over time hopefully we can bring them up to our complete solution. And if not, if that one tool solves their pain point forever, then that’s fine. So there will be some that will move up the stack and some that will stay.”

The free tools use the same agent that Kaseya normally installs for its full RMM and other products, meaning that should customers choose to upgrade, it’s just a matter of turning on the existing functionality, Beaulieu says.

Get in on endpoint SecurityWhat such freemium tools offer, in addition to a way to generate net new business, is a way for MSPs to leverage their experience managing on-premises servers as a bridge to a security practice. Beyond such server-based security practices, many RMM vendors offer specific endpoint security tools, which serve as one potential hedge in a cloudy future.

Some common areas of endpoint security services that many MSPs are offering to customers include:

Antivirus Protection: The gold standard of desktop protection is still absolutely necessary, and still underused. Many RMM providers contract with top antivirus vendors to use their engines and bolt them into their RMM consoles to pro-tect against viruses at both the e-mail server and desk-top levels.

Antispam: Spam is more of a productivity killer than a security threat, although it can be a source of malware or

What such freemium tools offer, in addition to a way to generate net new business, is a way for MSPs to leverage their experience managing on-premises servers as a bridge to a security practice.

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lure users to visit dangerous Web sites. Protection against spam is a common feature of many of the antivirus suites in use by RMM provid-ers—and an added service for MSPs to deliver.

Spyware Protection: This software falls more into the category of protecting users from private attackers installing keystroke loggers and phone-home software in users’ desktops, as opposed to the government snooping at the heart of the recent PRISM revelations. Nonetheless, spyware is some of the most insidious malware out there, and scanning for it regularly is a smart move for any organization.

Mobile Device Management (MDM): As mobility infiltrates every organization, managing devices for access and configuration is a vital security step. MDM gives MSPs another way to leverage their server expertise to help SMBs control all the new mobile devices on their networks.

Mobile Security: Some RMM providers are bundling tools and apps for protecting individual devices for the most popular mobile platforms.

Secure wi-Fi: Special software for securing corporate PCs at mobile hot spots ranges from virtual private networks (VPNs) to other protec-tion schemes that can be handy for organizations with employees who take corporate assets on the road.

web Protection tools: Software that helps keep browsers from opening dangerous code on questionable Web sites is especially valuable for customers with less-sophisticated users.

end-user training: Some savvy MSPs enlist their customers’ own users in the effort to keep the organization secure by offering end-user training as a service. Giving users a refresher on the basics that they should already know is important. With the constantly evolving threat landscape, though, end-user training is helpful even for users who are already diligent about secure computing practices.

Some of the best opportunities in security right now extend the kind of server-based monitoring that has long been the strength of MSPs. Others fall directly in the category of endpoint-only protection. In either case, most represent a path for traditional MSPs to expand their business into security. All of the services are a way for MSPs to protect their customers, while protecting themselves against a cloud future by expanding their area of expertise. •

Scott Bekker is editor in chief of RCP magazine.

Some savvy MSPs enlist their customers’ own users in the effort to keep the organization secure by offering end-user training as a service.


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Managed services providers (MSPs) have been around for years, yet the basics of the business model seemingly need to be rediscovered on a regular basis. One of those basics concerns the fundamentals of staffing an MSP business for growth.

Often such topics will generate long discussions around billable hours, engineer-utilization rates and how to build out teams of

PArtner’S GuiDe to

Staffing for MSP GrowthWhat’s the formula that successful managed services providers use to build their teams? A look at the types of people to add, and when, to stoke the fires of business expansion.

BY HOWARD M. COHEN AND SCOTT BEkkER

Often, when a company is small, early hiring depends on people being able to do multiple things.

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engineers. The idea of the MSP business depends on something different. All of the previous metrics are important for various types of services businesses, but the central insight for a profitable MSP is to dedicate the fewest-possible hours to support the most-possible recurring revenue.

In other words, the MSP premise is diminishing the amount of dependence on staff and increasing the amount of dependence on automation. So at its core, the answer to how to staff an MSP business for growth must be, “slowly and thoughtfully.”

the Founding employeesFor an MSP to succeed, the company or business practice needs three main archetypes. We’ll go with a “Gilligan’s Island” model just for fun.

the Professor: This is often the founder of the company. This is the person who knows the TCP/IP stack cold. The Professor is probably a hacker, in the original, ethical sense. This is the person who selects the initial complement of tools, sets them up and builds the internal pro-cesses around them. When it comes to an MSP’s network operations center (NOC), the Professor is the one who designs it, arranges for it to be set up or makes the strategic decision about outsourcing the NOC.

the Millionaire: This is the business brain behind the organization. Let’s face it—the technical geniuses on staff, such as the Professor, often can’t manage money, figure out how to make money or success-fully manage a business. Someone on staff has to be good at that.

the Movie Star: Every MSP needs a charismatic salesperson who can get out and sell the services.

Those are the three core roles required to get an MSP business off the ground. In rare cases, one person has all of those skills. In some cases, a couple of people can do it with one person playing a few of the roles. Often, when a company is small, early hiring depends on people being able to do multiple things.

the technical employeesAs the recurring service contracts accumulate, the most immediate need is for additional technical people. Again, the idea is to be gradual and careful, adding people as the business demands grow, using automation to keep the ratio of engineers to managed endpoints as favorable as possible.

There are a few kinds of technical people MSPs generally seek out.Customer service people are the entry-level positions. These are the

For an MSP to succeed, the company or business practice needs three main archetypes. We’ll go with a

“Gilligan’s Island” model just for fun.

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people who read the basic alerts and act on them. Experience and advanced degrees aren’t critical, but the best performers tend to be sharp and able to learn quickly so they can start to pick up nuances in the alerts that can help them interpret underlying problems with customer systems. Often it’s worth paying extra for more experienced customer service engineers who can decipher the incoming information beyond what the automation shows on day one.

At the other end of the spectrum are the highly sophisticated engineers, who can troubleshoot harder problems and upsell customers. These engineers can serve a double purpose in focusing on internal operations and, in very good opportunities, they can be rented out for high-level services alongside. Because this secondary role is outside the core business, the MSP management team must be extremely selective about these opportunities.

A third group are the remote-management tools specialists who can really make the MSP core tools hum and who discover new capabilities within the tools that the MSP might not be taking full advantage of.

An emerging technical SkillOne technical change in the last few years involves what MSPs actually work with. Nominally, MSPs manage endpoints. The reality for many years has been that MSPs were managing circuits, serving their customers by keeping tabs on carriers. The circuits remain important, but MSPs must now also monitor clouds: public cloud services, remote backup services and cloud productivity suites.

Every one of those services carries its own service-level agreement (SLA). The cloud providers self-monitor the SLA, but you can bet that a customer’s monthly bill will show that the cloud provider met the SLA. An MSP can provide a valuable service by keeping an independent eye on those SLAs to make sure the customer is getting any SLA penalties they have coming to them—along with quick resolution of any down-time they do experience.

A related area that forward-looking MSPs are offering involves managing cloud resource elasticity for customers. Any customer with spiky compute-usage needs (and what customer categories don’t fit that pattern?) can benefit from an MSP throttling up and down on storage, compute and memory in a public cloud on an as-needed basis.

These are new technical skills areas. As MSPs probe their Rolodexes and LinkedIn networks for new engineers, cloud SLA-monitoring abilities are a skill for which growth-focused MSPs should keep an eye out.

MSPs must now monitor clouds: public cloud services, remote backup services and cloud productivity suites.

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Business-to-technical headcount ratiosIf there’s rocket science to being an MSP, it’s on the technical side. MSPs should be hiring more of the technical rocket scientists. Yes, the technical people often don’t have much business sense, but the business is not that difficult and the headcount should be minimal. Technical headcount should make up the overwhelming majority.

There are two general sales paths for MSPs to follow. One is to sell through solution providers; the other is to sell directly to end customers. Selling through solution providers makes the need for headcount on the business side of an MSP that much smaller and can be a great way to scale quickly. (MSPs that are clearly not outsourcers help themselves here by signaling to the solution providers that there’s no possibility of stealing their customers’ billable projects.)

Those MSPs that decide to sell to end users, on the other hand, need marketing and sales employees right away. On those marketing hires, channel expertise is a big plus. Some MSPs have found that marketing professionals right out of school can prove overly focused on results-free social media tools without a healthy dose of results-oriented traditional marketing methods mixed in.

M&A inflection PointsSo, an MSP has hired slowly and carefully to match the growth in service contracts made, endpoints managed and SLAs monitored. When is it time to consider a merger or acquisition? In most cases, it’s obvious.

The foremost element is availability of capital for new hires. For an MSP that needs to expand geographically or into new practice areas but can’t, it might be time to consider being bought.

Another common issue is the energy level of the owners. One of the things that has always been true of the channel is there’s always another innovation being thrown in. Owners who have danced to the changes for decades may not be willing to adjust to the next wave for health reasons, retirement concerns or a desire to move on to a different type of challenge.

the importance of GrowthRegardless of when the M&A inflection point comes, it should be on every MSP owner’s mind from the very beginning.

What is it that’s going to raise the price that an MSP owner can command for a company? The metric is extremely simple: It’s his portfolio of current recurring revenue agreements. Those are literally money in the bank.

MSPs should be hiring more of the technical rocket scientists.

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When potential buyers come in to value the company, the first thing—and sometimes the only thing—they’re going to look at is the portfolio of recurring agreements. Technology and equipment will become obsolete, people can leave and accounts can be won by competitors. For MSP owners thinking about the future, the main thing that’s important is building the portfolio of recurring revenue contracts. Every hire the MSP makes must support the goal of adding recurring revenue contracts.

Profit from PrecisionThe MSP industry is unique among IT services businesses in that armies of engineers don’t necessarily indicate success. Even national MSPs often don’t staff armies of engineers, because the billable hours model is not the core MSP business model (although some MSPs will partner with other organizations that do have national field services organizations).

Keeping a laser-focus on using automation tools to maximize the efficiency of headcount is the surest path to profitable growth. Adding staff members exactly when and where they’re needed is the hallmark of successful MSPs with strong portfolios of recurring revenue contracts. •

Howard M. Cohen is a Redmond Channel Partner columnist, a consultant to IT vendors and channel partner companies, and a board member of the U.S. chapter of the IAMCP. Scott Bekker is editor in chief of Redmond Channel Partner.

When potential buyers come in to value the company, the first thing—and sometimes the only thing—they’re going to look at is the portfolio of recurring agreements.

Get More OnlineFor more on this topic, check out the audio replay of the Redmond Channel Partner Oct. 31 webcast, “How Do MSPs Staff Their Growth?” RCPmag.com/MSPs1112

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the year was 2008. The site was the cavernous meeting rooms and seemingly endless hallways of the George R. Brown Con-vention Center in Houston. The event was the Microsoft Worldwide Partner Conference (WPC). And the most anticipat-

ed news for the thousands of partners in attendance was what Micro-soft would do about Software as a Service (SaaS). At the conference, Microsoft partner executives—led by then-channel chief Allison Wat-son—described both the new cloud services and the way partners would get paid for delivering them.

Last year, Microsoft brought the whole rodeo back to Houston for the WPC. The geographic return underscored the fifth anniversary of

office 365Five years after launching cloud suites at a Worldwide Partner Conference, Microsoft is bringing the annual July show back to the Houston site where it all started. Here’s a look at 10 major changes in Microsoft’s cloud efforts since 2008. BY SCOTT BEkkER

The most anticipated news for the thousands of partners at WPC 2008 was what Microsoft would do about Software as a Service (SaaS).

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the Microsoft cloud suite. More than the name of the channel chief had changed (Jon Roskill took over the job in 2010). Here are some of the biggest differences in Microsoft cloud services and circumstances since 2008.

1. what’s in a name?The first name for the Microsoft cloud productivity suite was a mouth-ful. It was called the Business Productivity Online Suite (BPOS). It may not have won any awards for catchiness, but it did explain exactly what the product was supposed to do. The name stuck for three years. Then, in late June 2011, Microsoft relaunched the suite as Office 365. The name was about more than just invigorating a brand. While the new version did continue the core element of BPOS—replacing servers on-premises at a customer’s site with services hosted by Microsoft and delivered over the Internet—it also greatly expanded the definition of the product to include the option of on-premises desktop licenses for the Microsoft Office productivity suite.

2. Suite MixOne thing that happens with most Microsoft products is that the number of SKUs expands at a rapid rate over time until Microsoft reaches a break point and starts paring the SKUs back. Office 365 is still in the expansion phase. In 2008, Microsoft rolled out what it used to call Software plus Services in two versions. There was BPOS proper, which included Exchange, SharePoint, Office Communications Server and Live Meeting. Another version was called the Deskless Worker Suite (DWS) and was intended for factory-floor employees and other employees who accessed company e-mail and files only a few times a day and from shared kiosks. DWS covered Exchange and SharePoint services.

Now, there are still deskless versions (Exchange Online Kiosk and Office 365 Enterprise K1). But what used to be BPOS has developed into multiple offerings for small to midsize businesses (SMBs) and enterprises—all with and without desktop versions of Office.

The Office 365 Small Business offerings cover up to 25 users and include Office Web Apps, hosted e-mail on a customer’s domain name, file sharing using SkyDrive Pro, Web conferencing, a public Web site, and spam and malware protection. An Office 365 Small Business Premium edition also includes user rights to desktop Office applications, including Word, Excel, PowerPoint, Outlook, OneNote, Access, Publisher and Lync.

One thing that happens with most Microsoft products is that the number of SkUs expands at a rapid rate over time until Microsoft reaches a break point and starts paring the SkUs back.

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The SKU for companies with up to 300 employees is Office 365 Mid-size Business, which goes beyond the Office 365 Small Business Premi-um edition with three technologies more likely to be needed in larger organizations—Active Directory integration, SharePoint sites and the InfoPath desktop Office application.

The largest organizations also have a dedicated SKU—Office 365 Enterprise E3. Extra features in that enterprise edition include unlimit-ed mailbox size, archiving and legal hold e-mail capabilities, compliance tools covering SharePoint and Exchange, hosted voicemail, auto tele-phone attendant capabilities and business intelligence (BI) features.

Each size business also has an option of a hosted e-mail-only SKU (as well as standalone-hosted SharePoint or standalone-hosted Lync), and several less-emphasized bundles are also available. Meanwhile, Microsoft has also released dedicated education and government SKUs.

3. Partner Compensation ModelRight at the beginning in Houston, Microsoft introduced a partner compensation model that involved partners getting their customers to sign up directly with Microsoft for BPOS services. For that effort, partners would get back an advisor fee from Microsoft. The model called for partners to receive 18 percent of the customer’s monthly payments in the first year and 6 percent each year after that.

In the years between, Microsoft has adjusted the fee a few times. The most recent adjustment went into effect for Office 365 in March. Under that payment schedule, partners get a minimum of 16 percent in the first year and 4 percent in subsequent years. However, by selling at least 150 seats of Office 365, partners get 23 percent in the first year and 4 percent in later years.

The most important billing change in the five-year history of the program, though, was the full rollout in February 2013 of the Office 365 Open model. Partners had been unhappy from the start with the fact that their customers could only sign up directly with Microsoft for cloud services, for which Microsoft would then directly bill each customer. Partners expressed concerns again and again about how the process limited their ability to sell a turnkey solution to customers as part of a managed services or other type of package. The Office 365 Open model represents the first time that a broad set of partners can bill customers for the Office 365 service.

The most important billing change in the five-year history of the program was the full rollout in February 2013 of the Office 365 Open model.

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4. Cost per SeatFor partners relying on those advisor fees, what customers pay per user per month is of critical concern. In the five years since BPOS came out, market pressures have pushed the price of the base package way down, but Microsoft has countered by adding value to drive the overall cost of the package up slightly.

At the start, users paid $15 per user per month for BPOS, which included Exchange, SharePoint, Office Communications Server and Live Meeting. The closest comparable package today would be the Office 365 Enterprise E1 package, which costs $8 per user per month with an annual commitment. Even as the market has driven the cost down nearly 50 percent, Microsoft’s inclusion of desktop Office applications in the subscription service brings the price back up and then some. With Office desktop applications, the package is now $20 for enterprises, $15 for midsize businesses and $12.50 for small businesses.

5. Partner on-rampsEarly on, Microsoft didn’t offer much to help partners get started with BPOS. It was very much a case of, “Here’s the product, here’s the margin, go sell it.” As BPOS got off to a slow start, Microsoft quickly realized that partners needed a smoother on-ramp. One of the first steps was obvious. Microsoft had a long and successful tradition of handing out internal use rights (IURs) to partners for its products. Partners using the bits in-house understood them better and could make a better case, and offer more informed support and advice to customers. Within a few months of the full rollout of BPOS and DWS, Microsoft began offering 250 IURs of BPOS to partners.

Later, Microsoft formalized the IUR giveaway in an even fuller bundle, called Cloud Essentials. That free bundle included IURs for Office 365, Dynamics CRM Online, Windows Intune and Windows Azure for partners. For partners who transacted some cloud deals, another package called Cloud Accelerate—which cost the same as a silver competency in the Microsoft Partner Network (MPN)—brought more IURs and benefits.

6. Partner enthusiasmWPC in 2008 was held in Texas, but it might as well have been held in Missouri. Partners held a “show me” attitude toward cloud services. They weren’t sure the market was ready, they weren’t sure Microsoft’s package was right and they weren’t sure the compensation model would work. Participation figures after the first year reflected that

WPC in 2008 was held in Texas, but it might as well have been held in Missouri. Partners held a “show me” attitude toward cloud services.

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reticence. At the 2009 WPC in New Orleans, Microsoft reported that 5,000 partners had signed up to sell BPOS, and company officials admitted that the number of partners actually selling the product was a fraction of the sign-ups.

Fast forward to May 1 of this year. On that day, Roskill announced on his Channel Chief blog the milestone of 125,000 partners participating in the Cloud Essentials program (see bit.ly/YF2F2t). Even that represented a rapid acceleration from July 2012, when Microsoft was only claiming about 35,000 Cloud Essentials participants. A big driver for the mass increase in participation was a change on the Microsoft partner portal giving partners an opportunity to sign up for Cloud Essentials when they joined or renewed their membership in the MPN.

7. Customer Attitude toward CloudBack in 2008, a lot of pundits and vendors were talking about SaaS, the buzzword that meant then approximately what cloud does now. Not many partners were immediately interested in SaaS, though. Probably the most important factor then was that customer awareness of SaaS was very low. The situation now is the opposite. Even partners who aren’t enthusiastic about selling cloud solutions get asked about cloud by their customers. Credit the recessionary pressures on IT spending and the proliferation and maturity of cloud offerings, including those from Microsoft, for the change in attitude.

8. Small Business optionsPartners serving small business are becoming a lot more receptive to cloud solutions. Partly that’s because of interest among small businesses in having e-mail and other back-end technologies delivered via the cloud. Part of that is because Microsoft has closed off one of the main options for partners and small business customers alike. Back in 2008, Microsoft Small Business Server (SBS) was reaching full stride. The product had hit a level of maturity that partners and customers were very comfortable with. In the interim, Microsoft released another version of the product, but announced that SBS 2011 would be the last of the product line. While SBS is still available for sale and the end of support is years away, the promised sunset for the product line is casting a shadow on the small business market. Whether Microsoft started the SBS shutdown because of the market’s direction toward the cloud or to direct the market toward the cloud, the effect is the same.

Even partners who aren’t enthusiastic about selling cloud solutions get asked about cloud by their customers.

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9. third-Party toolsFive years ago, the loudest third-party vendors in the market were criticizing BPOS. Intermedia.net Inc. was the most vocal of the Microsoft Exchange hosters and traded heavily on its partners’ ability to own billing for their customers and use the latest versions of Microsoft servers (BPOS was one generation behind at the time). Since then, a vibrant ecosystem of third-party tools vendors has emerged to help partners migrate mailboxes and manage their customers and the sales process.

10. the Google SuitePartners largely viewed the Microsoft BPOS initiative as a response to Google Apps. In the interim, Microsoft and Google Inc. have traded major customer wins in the cloud productivity arena, but Microsoft’s mere appearance on the market has not made Google go away. In fact, analyst and consulting firm Gartner Inc. in April said during a webinar that Google’s market strength among cloud productivity suite users has been improving over the last few years. Meanwhile, the Microsoft of 2013—facing fierce competitive pressure from both Google and Apple Inc. on smartphones and tablets, and a declining PC market—has a far less dominant presence in tech than the 2008 Microsoft had.

That’s a lot of change for the Microsoft cloud productivity suite since the last time Microsoft brought its partner community to Houston. The only guarantee for the next few years is more change. Microsoft has already promised to provide details this summer about integration between Office 365 and the Yammer social-collaboration platform the company acquired in 2012. There are sure to be some Office 365- related surprises on tap, as well, at the 2013 WPC in Houston. •


A vibrant ecosystem of third-party vendors has emerged to help partners migrate mailboxes and manage their customers and the sales process.


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Power management technology is a growth industry. A surpris-ing number of Microsoft partners don’t take advantage of power management sales opportunities, but a few recent developments and other factors make the technology worth

a look for almost anyone selling complete IT solutions to customers.A June report from market researchers at IDC contended that the technol-

ogy—and the broader Datacenter Infrastructure Management (DCIM) field, of which power management is a part—will continue to be a growth area.


Supercharging Your Power Management SalesOpportunity abounds in the power management industry. Here are six ways partners can ramp up their power management sales. Some are old standards, while others take advantage of new trends. BY SCOTT BEkkER

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A few recent developments and other factors make power management worth a look for almost anyone selling complete IT solutions to customers.

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“The DCIM market is hitting its stride,” IDC said in a research news release for the study, “IDC MarketScape: Worldwide Datacenter Infrastructure Management 2013 Vendor Analysis.” The report continued: “Datacenters are expanding to power the Third Platform, a new era of computing built on mobile devices and applications, cloud services, big data and analytics, and social technologies. Expansion into new geographies, improvements in disaster recovery, and expansion of workloads beyond current power and processing capabilities of current datacenters has challenged datacenter managers to find ways to manage resources and change.”

There are several ways Microsoft partners, even those serving smaller customers, can capitalize on the trends to supercharge their power management sales.

1. offer Power ManagementIt’s obvious that you can’t make money selling power management solutions if you don’t offer power management solutions. Still, a lot of partners selling server, virtualization or datacenter solutions never try to explain to their customers the benefits of integrating power manage-ment into their infrastructures.

They’re ignoring a significant upsell opportunity with a high margin. That means either potentially surrendering that sale to another partner (who could go on to poach future business from the customer) or leaving the customer unprotected from a host of critical problems that power management products solve.

2. Go with the Datacenter FlowMicrosoft solution-focused partners who include power management on their line cards will soon get an unintentional boost from Microsoft. The software giant for years offered competencies for partners who, after clearing some substantial technical, training and customer evidence hurdles, wanted to have a Microsoft badge to show customers in order to establish their expertise in a specialization area.

In January, Microsoft will tweak the competency list in a way that rolls several specific competencies into one that’s broader. The new competency is called Datacenter, and it brings together three previous competencies: Server Platform, Identity & Access, and Management & Virtualization. By reducing the focus on Microsoft software products and placing it instead on general expertise in datacenter deployments and issues, Microsoft in some ways is setting up partners with an umbrella for delivering broader datacenter solutions. Both by getting

It’s obvious that you can’t make money selling power management solutions if you don’t offer power management solutions.

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partners focused on datacenters rather than specific servers or server technologies, and by implying to customers that the partners are capable of offering a broader portfolio of datacenter-related services, Microsoft is priming the pump for broader solutions.

Server hardware sales and recommendations were a part of many Server Platform competency partner solutions, for example. Now, however, the new Datacenter tag can signal end-to-end capability—an excellent framework for recommending power management products—from uninterruptible power supply (UPS) and surge suppression to power distribution, automatic transfer switches and other physical aspects of disaster recovery.

3. Prepare Disaster BattlecardsMany Microsoft partners of all sizes generate at least a side income from disaster recovery and business continuity (DR/BC). Many of the selling points of disaster recovery for managed services providers (MSPs) and other solution providers apply to power management, as well.

For those partners who don’t generate significant sales from DR/BC already, those partners who do sell it often report more success with customers when they can offer specific data about storms and outages. Traditional disaster examples are useful for power management product sales. An additional type of metric that’s extremely relevant is blackout information.

One source of such information comes from the Eaton Corp. Inc. “Blackout Tracker,” an annual report detailing blackouts for the past year in dozens of countries. In the 2012 U.S. version of the report, Eaton tracked 2,808 blackouts over the course of the year affecting 25 million people. The year’s knockout events included Hurricane Sandy, with its 8.1 million outages (some of those for weeks); a huge June storm in the Ohio Valley and Mid-Atlantic; Hurricane Isaac; a Michigan windstorm; and a Michigan late-winter snowstorm.

Partners looking to further localize their customer battlecards can drill down to state-level data, as well. In Washington state, for example, 2012 brought 90 outages affecting an average of 9,600 customers each and lasting an average of 249 minutes.

That kind of detailed data is a good starter for conversations around whether a business’ existing UPS (if any) is robust enough for the types of outages common to the area, and whether some of the more sophisticated power management solutions, such as automatic shut-down of non-critical servers in an outage to conserve battery life for critical functions, would be appropriate.

Partners report more success with customers when they can offer specific data about storms and outages.

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4. Make it About GreenEnvironmental sustainability continues to be a big deal in the corporate world. Partners selling power management solutions have an obvious way to capitalize on that trend while saving their customers money.

Peak hype (to date) for green computing may have occurred a few years ago, but the concepts are getting locked into international treaties and U.S. government policies in a lasting way.

In a February blog post, Cynthia Curtis, chief sustainability officer for Computer Associates Inc., predicted that corporate pressures to focus on green datacenter technology were proliferating:

“Enterprises will increasingly make decisions to mitigate supply-side electricity-related risks, for reasons including:

1) In most regions around the globe, electricity costs are escalating well ahead of inflation in the long term.

2) The utilities’ abilities to sustain low-cost and rock-solid reliability are increasingly being challenged by factors such as:

Q Aging assetsQ The Integration of intermittent, renewable energy generation

capacity, such as wind and solar into the gridQ Unclear, or in the case of the United States, opaque national

energy policyQ Increasing environmental concerns.”

All of these are reasons that customers will continue to look to power management technologies for energy and cost savings.

5. no Datacenter, or Data Closet, too SmallWhile many of the ways to supercharge power management sales focus on larger customers, there are power management solutions on the market for every size business. The biggest datacenters may have the most to gain from power management infrastructure, but every business has a utility bill. The right technologies in the computer closet of even a small business can make a measurable difference to the customer’s bottom line.

6. Sell intelligenceThe “Internet of Things” is huge and growing larger at a fast clip. ABI Research, based in London, released a report in May finding that what it calls the “Internet of Everything” (IoE) now consists of 10 billion wire-lessly connected devices, and predicting that the number would increase to 30 billion devices.

Environmental sustainability continues to be a big deal in the corporate world. Partners selling power management solutions have an obvious way to capitalize on that trend while saving their customers money.

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Power management hardware is following the spirit if not the letter of that definition. Because many of the devices are designed for datacenters, they often sport connection ports rather than wireless technologies. (For devices with no connections but a power cord, some newer power management software can detect unconnected devices in other ways.)

Partners who understand how much smarter power management technologies have become have an opportunity to help their customers transition to more sophisticated technologies that can do a lot more for their businesses.

“Many organizations use standalone software from multiple vendors to monitor and manage their [UPSes], power distribution units [PDUs] and other crucial power quality and environmental devices,” wrote Jim Tessier, product manager of Eaton’s Power Quality Division, in a June white paper about power management. “Short on features and poorly integrated with other management resources, these outdated applica-tions only add further complexity to a variety of common power-related administrative challenges.”

According to Tessier, power management devices and software can now aggregate power device quality information, monitor and manage virtualized server environments, maintain power system reliability, allow administration of remote datacenters, and manage use-based electricity billing schemes. Tessier explained one of the most interesting capabilities of newer systems in his white paper:

“Intelligent power management software helps technicians deal with power outages more efficiently. For starters, the latest power manage-ment solutions let technicians divide receptacles on their UPS hardware into separate load segments that can be monitored and administered individually. By grouping their least-important infrastructure resources together in distinct load segments, companies can position themselves to make non-essential systems the first ones they shut down during a power outage. That conserves battery capacity and maximizes the amount of backup power available to keep mission-critical devices up and running.”

A smarter power management infrastructure offers customers more power at a lower monthly utility bill, and offers partners a new opportunity for revenues, even for customers with existing solutions.

Plug some of these strategies into your customer conversations and you could create a comfortable new source of revenues. •


The right technologies in the computer closet of even a small business can make a measurable difference to the customer’s bottom line.


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As Microsoft’s content management ambitions shift into SharePoint, systems integrators look to other vendors to tie-in to SharePoint while providing Web content management. BY SCOTT BEkkER

web content management was the huge opportunity of the late 1990s as every business raced to the Web. While content management doesn’t get as much hype anymore, it’s no less important.

In fact, content management from a corporate perspective is more complicated than ever—with social media posting and monitoring becoming an important set of activities for every brand in addition to all

While content management doesn’t get much hype anymore, it’s no less important.

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Content Management

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of the traditional requirements. Also, Web users are coming to expect mobile-optimized versions of all their Web sites, putting another demand on the traditional content management system (CMS).

Even as content management remains critical, Microsoft is making strategic choices around its SharePoint collaboration product that de-emphasize straight content management. That forces many of Microsoft’s closest systems integration partners to consider alternatives. Fortunately, several longtime Microsoft vendor partners offer deep integration with SharePoint while offering full-featured customer-facing content management.

A little more than a decade ago, Microsoft made an aggressive move into enterprise content management with the 2001 acquisition of NCompass Labs Inc. By bringing a partner’s product in-house, Microsoft made a statement that it felt it needed a full-featured product for complex, customer-facing sites.

“Microsoft understands that effectively managing Web content is critical to the success of any e-business initiative and, ultimately, to the profitability of the overall business,” Paul Flessner, senior vice president of the .NET Enterprise Server Division at Microsoft, explained at the time.

Even as content management remains critical, Microsoft is making strategic choices around its SharePoint collaboration product that de-emphasize straight content management.

Microsoft CVP Jeff Teper at the Microsoft SharePoint Conference explaining Microsoft SharePoint 2013 investments—most of which involve internal collaboration rather than external Websites. Microsoft is leaving plenty of running room for Web content management vendor partners.

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Microsoft almost immediately renamed the NCompass Resolution product as Microsoft Content Management Server 2001. After a few release, though, CMS functionality began the gradual drift into the constantly expanding Microsoft SharePoint property, which launched around the same period.

Eventually, SharePoint became one of Microsoft’s most significant products by revenue, reaching Microsoft’s club of billion-dollar-a-year products faster than previous products. Recently Microsoft announced that SharePoint is a $2-billion-per-year property. As the collaboration and other internal sharing and intranet/extranet capabilities grew, the emphasis on broad, external-facing Web content decreased.

Changes to the Microsoft Partner Network (MPN) that went into effect in November reinforce that strategic shift. Content Management, one of the original MPN competencies in 2010, was discontinued. Focused already on SharePoint, the competency was one of several merged into a Collaboration and Content Management competency that aligns more closely with the SharePoint product set.

Underscoring the strategic importance of SharePoint, Microsoft consolidated two other partner competencies into Collaboration and Content Management: Portals and Collaboration, and Search. In a blog post during the Microsoft Worldwide Partner Conference in July, MPN General Manager Julie Bennani said the merger reflects “that customers increasingly want an end-to-end solution for finding, sharing, managing and collaborating on content, not separate solutions.” She also said the consolidation will make it easier and more cost-effective for SharePoint partners to engage with Microsoft.

The Microsoft technologies emphasized in the new competency are SharePoint, as well as SQL Server 2012, Microsoft Visio 2010, Visual Studio 2012 and Project Server 2010.

A new version of the Microsoft Collaboration and Content Manage-ment flagship, SharePoint 2013, is expected in general availability sometime this quarter and the emphasis remains on internal collabora-tion at enterprise organizations, with the focus for Web sites being on quick sites put up by teams.

Speaking at the Microsoft SharePoint Conference in mid-November, Microsoft Corporate Vice President Jeff Teper made it clear that the major investments for the 2013 release were going to support cloud collaboration efforts. “Our goal was very simple—to build the largest- scale enterprise cloud service in the industry, to be able to take the

Changes to the Microsoft Partner Network (MPN) that went into effect in November reinforce a strategic shift.

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billion Office users and be able to run the full back-end services in the cloud with Office 365,” Teper said in the opening conference keynote. “A lot of work went on from provisioning, to telemetry to disaster recovery, building out datacenters [with] hundreds of millions of dollars [of] investment.”

Other big investments focused on improving the UX, through social networking tools, such as Yammer; revamping the search engine; and broadening the business intelligence capabilities. Again, it’s clear the investments are primarily focused on internal collaboration rather than external site content management.

Microsoft’s lack of emphasis on Web content management is reflected in a Gartner Inc. “Magic Quadrant” released in September. Microsoft is grouped with IBM Corp. in the “Challenger” quadrant rather than the coveted “Leader” quadrant of the Web Content Management (WCM) report.

“SharePoint’s strength as a general-purpose technology is also a weakness, as in the WCM arena it lacks refinements geared to important business scenarios and influences,” wrote the Gartner report’s authors Mick MacComascaigh, Mark Gilbert, Gavin Tay and Jim Murphy. “Personalization and content-targeting features are urgent requirements for external Web sites, but SharePoint’s are still largely geared to internal scenarios.”

That focus is reinforced by user tendencies. “SharePoint 2010’s adoption by well over half of Gartner’s client base shows that it has become an important part of the content management portfolio of many enterprises,” the Gartner analysts wrote. “Only a small percentage use SharePoint for their external Web presence.”

Among SharePoint’s strengths, according to Gartner, is an “expansive” ecosystem of partners. Looked at another way, by shifting strategically over the last 10 years toward internal collaboration, Microsoft has left room for several Web content management vendors to flourish with tight Microsoft stack integration. Some of those vendors in turn have joint systems integration partners with Microsoft who implement their content management systems alongside SharePoint.

Some of the vendors in Gartner’s “Leader” quadrant with strong Microsoft ties include Sitecore, Ektron Inc. and OpenText Corp. Other vendors mentioned in Gartner’s “Magic Quadrant,” although not in the “Leader” square are Dynamicweb and EPiServer.

Gartner placed Sitecore furthest to the right (best on the chart) on the “completeness of vision” vector, and the company is only edged

Among SharePoint’s strengths, according to Gartner, is an

“expansive” ecosystem of partners.

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out on the other vector, “ability to execute,” by Oracle Corp., Adobe Systems Inc. and SDL.

Sitecore, which calls what it does customer experience management, a superset of Web content management, gets high marks from Gartner for the strength of its vision. One attribute Gartner labeled as a weakness in the report would qualify as a strength for many Microsoft partners, who are systems integrators looking for a content management vendor partner.

“Sitecore’s .NET strength makes it less attractive to users looking for tools with a strong Java or LAMP stack focus,” Gartner’s analysts noted. Meanwhile, in their plus column, Gartner noted that San Francisco-based Sitecore, which has a gold competency in Application Development, had “richly functional WCM environments tied to Microsoft SharePoint.”

More evidence of Sitecore’s close ties to Microsoft’s platform is a high-profile initiative to leverage Microsoft’s Windows Azure platform, called the Sitecore CMS Azure Edition. Customers maintain their regular Sitecore servers behind their own firewalls but can choose to replicate the data to any of six Windows Azure datacenters around the world (two in North America, two in Europe and two in Asia.)

“The advantages of this hybrid approach is users can manage their main Sitecore editing and database servers securely on-premises and push Web site content to their front-end Sitecore-based Windows Azure cloud servers in dispersed geographic locations,” a Sitecore Web page on the offering noted.

In a recap of Sitecore’s fiscal year released in November, Sitecore claimed a third consecutive year of 40 percent revenue growth, indicating that customers’ appear to have a strong appetite for Web content management solutions backed by SharePoint.

“Our fiscal year 2011/12 was a strategic one for us in advancing Sitecore’s goal to grow faster than the industry and secure our position in the rapidly growing customer experience management market,” Michael Seifert, founder and CEO of Sitecore, said in a statement. Seifert said Sitecore had 1,000 certified business partners deploying its products worldwide. Gartner noted that Sitecore is looking to beef up its own partner ecosystem and is investing in training and certifying partners.

The other Microsoft-related companies in the “Leader” quadrant were OpenText and Ektron. OpenText is a roll-up of onetime big names

“Our fiscal year 2011/12 was a strategic one for us in advancing Sitecore’s goal to grow faster than the industry and secure our position in the rapidly growing Customer Experience Management market.” Michael Seifert, Founder and CEO, Sitecore

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in content management market, including Vignette and Hummingbird. Although Gartner’s analysts noted that the Canadian firm has a confusing strategy with two similar offerings, it approved of the company’s strong partner ecosystem and solid relationships with both Microsoft and SAP AG. Nashua, N.H.-based Ektron is another .NET-based content management platform.

The analyst firm’s discussion of Dynamicweb, an SMB-focused player down in the niche quadrant, may best highlight the opportunity that the collaboration-focused SharePoint gives Microsoft-centric content management vendors and their partners.

Defining Dynamicweb’s combination of capabilities as “based on .NET in an environment whose popularity is driven by Microsoft SharePoint,” the Gartner analysts wrote, “This will enable it to ‘surf the SharePoint wave’ and tap into the demand from which most of the other providers of .NET best-of-breed WCM offerings featured in this Magic Quadrant also benefit.”

Microsoft systems integration partners can think of the healthy ecosystem of content management vendors as a set of surfboards they can pick from to surf that SharePoint wave themselves. •


Gartner’s discussion of Dynamicweb, an SMB-focused player, may best highlight the opportunity that SharePoint gives Microsoft-centric content management vendors and their partners.

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