In the past week, I’ve run into four of the most successful software as a service (SaaS) companies that Wall Street investors don’t know — at least not yet. Here’s a quick look at the companies, and their critical importance to the SaaS industry.
The SaaS experts: Autotask. Ingram Micro. Level Platforms. N-able. Confused? Let me explain.
- Autotask really is a fully hosted solution, and the SaaS model is treating the company well.
- Ingram Micro Seismic hosts applications for nearly 800 managed service providers. That’s 800 SaaS customers — yet Wall Street has no idea Ingram has a SaaS story to share. It’s time for Ingram’s CXO suite to correct that problem.
- Level Platforms helped to pioneer the master MSP business model, where companies host Level Platform’s software in a SaaS configuration.
- Roughly half of N-able’s current sales involve SaaS-driven deployments hosted by N-able, according to CEO Gavin Garbutt.
- (Please don’t send me nasty emails if your company wasn’t listed above.)
How SaaS Can Drive MSP Dollars
Fact is, everyone in the managed services market needs to do a better job weaving SaaS into their messaging and corporate positioning — as long as the messaging is responsible and accurate.
Think about this for a minute: Let’s imagine it’s 2010 or so, and a company like Autotask pursues an initial public offering. (I repeat: This is a hypothetical event.)
If you were writing Autotask’s prospectus for potential investors, which one of these two approaches would you deliver:
- Autotask is a leading provider of professional services automation (PSA) software.
- Autotask is a leading provider of software as a service (SaaS) that empowers IT consultants across the world.
Wall Street understands SaaS and IT consultants. They don’t have a clue about PSA software. Based purely on marketing terms, I bet Autotask would receive more buzz and a higher initial valuation if the company used strong SaaS messaging in a potential IPO.
That’s pure speculation on my part. But I’m holding fast to my belief: Some of the world’s most successful SaaS companies are right here in the MSP industry. It’s time for the MSP ecosystem to recognize — and celebrate — that SaaS reality.
Posted In: Software as a Service and Hardware as a Service
Tags: Autotas | Gavin Garbutt | Ingram Micro | LPI Level Platforms | Managed Service Provider | Managed Services | MSP | N-able | SaaS | Software as a Service and Hardware as a Service
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What? Not a single comment from readers on this? Are MSPs simply ignoring the SaaS connection? Or was my blog entry off-target? I thought this particular entry would stir some healthy debate and my ego took a hit when I saw zero comments
-jp
Joe,
I’m a little confused, are you saying MSPs need to embrace SaaS or just the vocabulary?
@Nick: I’m suggesting MSPs take both steps.
There’s an old saying: Keep your friends close but keep your enemies closer. Whether MSPs embrace or fear SaaS strategies from Microsoft, Dell and others, the MSPs need to study and understand those services in order to (A) compete effectively and (B) offer consistent responses to customers about such services.
Im with you Joe. There is a reason that Micro$oft is expanding its data center capacity at a phenomenal rate.
If you’re a small business and your presented with two options, which would you choose?
Option 1.
Buy a Server, Put it in your office or pay for Collocation
Purchase MS SBS Server Licensing and CALs
Purchase Office Licensing for your Staff
Contract a MSP to manage it all for you
Repeat process every 3-5 years
OR
Option 2.
Pay monthly fee to have your needed Apps/Data delivered via SaaS
We’re getting excellent reception to Option 2.
@Nick: You just hit a nerve with me when you mentioned Microsoft Small Business Server. I think the latest SBS product launch is a non-event. I know a lot of VARs still make great money off SBS. But as I look out longer term, I think it’s a dead-end product/strategy to continue deploying big, fat, complex servers in small business settings.
There isn’t a lot of danger in the short term, because most MSPs would never say to client, “Why buy a SBS box when you can host your email, data, and apps for a fraction of the cost at $x/user a month and never buy licensing again!”
We make too much on project installs and reoccurring fees babysitting SBS boxes. Since MSPs are undoubtedly one of strongest influencers over technology buying decisions of Small Businesses, most will continue the same old strategy.
However, what happens when Dell, Microsoft, and others spend billions of dollars in marketing/sales on educating Small Business owners of their options and the benefit of SaaS model?
One of the reasons why the Small Business market has been unattractive to these mammoth IT companies is because of the complexity of the market. Its too diverse to standardize, client XYZ’s SBS box is not running exactly same config as Client XXZ’s SBS box. So take away the box in the first place and just give the business what it needs, then you control the infrastructure and its completely standardized.
Since its for a specific product (the first S in the SAAS), it seems to me thats its not a business model, just a delivery model. As an outsider looking in, it seems no different to me than you moving from break/fix to the many remote monitoring and maintenance services out there that you guys now implement and offer.
If an MSP has no intention of going public, then I dont see how it matters very much except that more standardization of services make for more efficient and profitable operations. I’d think you guys would embrace it since you are already doing an AAS model yourselves but its maintenance, network mgmt, or whatever you want to call it, as a service.
The only issue I see, and it seems like one you can make $$ on are the cloud/multiple cloud issues that come up.
Stu
@Stu: I guess my main point is this…
1. Lots of “SaaS” companies are struggling to get their business models right. Yet they benefit from SaaS hype.
2. Lots of MSP platform providers have perfected SaaS — but few analysts (tech, financial or otherwise) realize that fact. The MSP folks should seek the SaaS credit they deserve when raising money and/or moving into public markets.