I just spoke with Joe Quaglia, senior VP of US marketing for Tech Data Corp. Quaglia heads up Tech Data’s managed services strategy — known as VARChoice. The conversation gave me a better feel for Tech Data’s business plan in the MSP space, especially as it relates to Ingram Micro’s Seismic strategy.
I’m not here to say one strategy is better than the other. But as VARs and managed service providers evaluate potential distribution partners, here are some of the key messages and strategies I’m hearing from Tech Data and Ingram Micro, respectively.
While Ingram Micro Seismic hosts managed services platforms for its VARs, Tech Data has made a “conscious decision not to go in [the hosting] direction,” said Quaglia. “We’re not in the business of building network operation centers because there are too many partners who know that business and have time-tested solutions.”
Also, added Quaglia, “we don’t want to compete with our vendors” — specifically, hardware, software and data center providers that offer NOC services.
Pros and Cons
I can see both sides of the story here: By providing hosted services, Ingram Micro Seismic provides VARs with a low barrier to entry in the MSP market. (Check out my podcast with Ingram Micro VP Justin Crotty for more info.)
Many VARs simply don’t have the financial power or technical expertise required to build and manage a 24×7 data center. Also, some MSPs that have NOCs may still want to leverage Seismic for selected platforms that extend their own services.
Counter Point
Still, Tech Data points out that some VARs may feel threatened by distributors that enter the hosting market. With that thought in mind, Tech Data doesn’t host MSP platforms, but the VARChoice initiative includes a growing range of MSP platform options that VARs can purchase.
Will Tech Data add value to those platforms? Quaglia points out that Tech Data provides an integration center where VARs can have MSP-centric equipment configured to meet their needs.
Also, Quaglia points to a partnership between Tech Data and IBM Global Financing, which allows VARs to more easily bill customers on a monthly basis. The financing relationship, he adds, can also help MSPs offer hardware as a service (HaaS).
Shame on me for not knowing if/how Ingram offers financing to Seismic customers. I will check in with Justin Crotty at Ingram for more thoughts.
Posted In: Finance | Platforms
Tags: Distributors | IBM Global Finance | Ingram Micro Seismic | Joe Qualia | Justin Crotty | Managed Service Providers | Managed Services | MSPs | Tech Data VARChoice
Interact: Add a Comment | Trackback Link | Permalink
Share:
Subscribe: RSS Feed
Update: An Ingram spokesperson says the company was the first to market with a HaaS financing offering, and the company has since teamed with several companies to encourage full-service leasing agreements (HaaS) and leasing in general.
We have been doing managed services for a number of years and have partnered with Ingram for about the last year or so. We do contiuosly watch the industry and try to keep pace with what is going on. I am really surprised that any VAR today would truly want to build out a NOC when companies like Ingram enable us to rent a slice of a well built operation. The thing that I like about the offering is that they do enable us to leverage a shared infrastructure and consequently focus on providing non-commodity services to our end users. I also took a look at the Tech Data offering and was not all that excited about the work being performed by technical resources not located in the United States.
Chris: Thanks for the perspective. Do you mind me asking which Seismic services you’re using? And do you brand them as your own to customers? I’m sure our readers would love some more real-world thoughts. Thanks.
I’d correct Ingram that MSP OnDemand was the first to bring a true HaaS financing option to market. To date, MSP OnDemand is the only HaaS financing offering that delivers funding that does not involve the VAR’s credit worthiness and does not require the VAR to use their Master SLA. Check, CRN article by Dan Neel from September 29, 2006 - http://www.crn.com/software/193100554?queryText=dellinger. Seismic didn’t really launch until January 2007. If I recall correctly, Ingram’s HaaS financing offering wasn’t announced until late Summer 2007 (August I beleive).
Amy: I believe Ingram was claiming first “distributor” to offer HaaS financing. Sorry for the confusion.
Other than dismissing Ingram’s strategy, Tech Data’s comments do nothing to shed any light on what Tech Data’s strategy is in this space or how it helps vars be successful in this space. It is always very disappointing to us when a competitor doesn’t do their homework to understand our strategy and then makes public comments that clearly illustrate that lack of understanding.
Joe P, you are still not asking the tough questions. See my post on May 16th. http://www.mspmentor.net/2008/05/16/tech-data-expands-its-managed-services-offerings/#more-608
If we are going to analyze, compare and contrast distribution strategies as it relates to managed services then let’s get specific, go deep, and do it right.
Justin: Not asking the tough questions? I’ve written 345 blog posts on managed services since September and I’m not asking the tough questions? I beg to differ.
But on the other hand, that’s the wonderful thing about true Web 2.0 blogs: Readers are allowed to strongly voice their opinions.
So while I disagree with your assessment that I don’t ask the tough questions, I welcome your thoughts — and all reader thoughts.
Joe: I meant tough questions as it relates to the strategies of the distributors, how those strategies differ, and how those strategies benefit vars.
We’re also using Ingram’s Seismic offerings. We’ve been one of the first to jump on some of the services. IM had some growing pains, but those seem to be worked out and we’re starting to see the benefits of using IM as our partner.
We use the NOC, MX Logic, Vault Logix, Autotask and we’re offering our customers the Help Desk services and testing the Hosted Exchange with others.
The decision to go with IM instead of our own in-house stuff was based upon us trying to do in-house in the beginning. The extra cost of the infrastructure, having to support our own hardware and software upgrades and more. We would have been much further along if IM had these offerings 3.5 years ago when we first started moving towards being a full MSP.
It’s not perfect, but our own in-house service was way worse.
cflint: Congrats on your efforts. Can you get in touch with me directly? I’d love to hear more about your Exchange strategy as it develops.
-jp, MSPmentor
joe [at] ninelivesmediainc.com
Anyone who wants flexible options and a solution for wide varieties of credits can develop a HAAS program, whether its a true program or just shares some features. Since financing is my gig, I’d love a chance to talk with a couple of you that are interested in it as we have a couple tech specific programs that I think are a good fit for what you guys are trying to do, which is have affordable hardware but lock in your position to sell and make $$ off the services. Please email me about any of this or to see how we can collaborate on a program at Stu@southernlendingsolutions.com. Thanks.
Joe, I hope I’m not violating anything by offering that.
Stu
Stu: MSPmentor is designed to ensure all readers can have a voice. And I think it’s good when comments (such as yours) include contact info that helps readers find the answers they need.