Citrix Systems is reaching out to its channel partners and sharing some timely views on the managed services market. Now here’s the twist: As a result of market pressures and commoditization, Citrix says the smartest MSPs are “beginning to show signs of revenues through hosting not one or two applications, but the entire suite of office productivity applications.” Translation: the line between MSP and SaaS specialist is fading fast. Here’s why.
Scott Swanburg, director of the Citrix Service Provider Program, shared his MSP market views in a January 18 blog post. No surprise, Swanburg believes so-called Citrix Service Providers (CSPs) are ideally positioned to blend managed services and Software as a Service (SaaS).
Swanburg asserts:
Starting with the SMB, corporations are seeing that they can “job out” their IT services without paying an exorbitant fee. As they become accustomed to this model, they are also now collaborating to offload Line of Business (LOB) Applications which in many cases are similar from one business to another. The further into the “Higher Valued Services” an MSP goes, the more likely their customer is to see higher value in their offering. This is because CSPs provide a similar service offerings as their older Full Service MSP cousins, but at a much lower cost to the end customer.
The Bigger Picture
Whether you leverage Citrix or another approach to multi-tenant applications, I believe Swanburg is onto something. The line between managed services and SaaS is fading. (On second thought, it’s gone.) The reason: Many entrepreneurs and small business owners are willing to completely outsource their day-to-day applications so that they can focus on business development.
Let me put it another way: As a business co-owner, I don’t wake up each morning wondering if my PCs and servers are working and pro-actively managed. But I do wonder — ever day — what type of applications our company should leverage to drive our business forward. And generally speaking, our company’s thought process involves SaaS applications.
In my view, some MSPs continue to ignore the SaaS market because they (A) fear the unknown or (B) don’t think they can compete effectively against Microsoft, Google, Salesforce.com and dozens of SaaS startups.
Citrix and many other software companies are trying to rally their partners around multi-tenant and/or SaaS opportunities. I wonder: How many MSPs are listening to the advice and gaining first-mover advantage in this new wave of activity?
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Posted In: Software as a Service and Hardware as a Service
Tags: Citrix Service Provider | Citrix Service Provider Program | Citrix Systems | CSP | From MSP to CSP | hosted applications | Multi-Tenant Applications | Scott Swanburg
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Wow…. this takes me back 10 years to the dot com explosion when ASPs were promoting the outsourcing of desktops. Looks like it was just a decade before its time.
Mike: Always good to hear from you. Hope all is well. I was one of those guys in the 1990s who predicted (over and over again) that Microsoft would eventually crush Citrix in the multi-user market. Um, I was wrong (over and over again…).
-jp
DedicatedIT has been providing hosted applications to our clients since before it was called “cloud computing”. Actually, we’ve been hosting applications longer than we have been a Managed Services Provider (in South Florida). It’s just this year that we decided to actually brand our offering as “HostMyIT” (also very heavily focused for application hosting in South Florida).
As I stated in a comment on this Citrix Blog about finding application hosting providers, I believe competing with the big boys is a mistake. I think that a regional MSPs have the ability to compete very strongly in the hyper-local, full-service space.
Why?
Because their clients already trust them, they know their clients’ businesses, they know the applications and their associated quirks and they are already used to paying for IT as a service.
I’m glad that Citrix is going to help us in this space. It’s a shame, though, that Microsoft is not allowing VECD licensing for multi-tenant SPLA providers. Why? My only guess is that they want to get their offering complete, first.
Just my 2 cents.
Adam Steinhoff
http://www.DedicatedIT.com
http://www.HostMyIT.com
Hi Adam: I hear what you’re saying about competing on a local basis. If you look at MSPs that are getting acquired, it’s because they dominate a specific geography and provide superior local support…
-jp
Joe this is good insight. I have always been curious why MSP’s would not see that “hosting” is actually the future of their business (within the SMB market). SMB firms are looking to outsource the IT functions completely – eliminating server infrastructure and PC management. This has been the driving factor with Real Time Data Services (www.myrealdata.com) from day #1.
Mike Krieger is 100% correct. The ASP model and adoption rates were a decade too early. However, the day has now arrived with a vengence and MSP’s need to blend hosting into thier offering as a transition-based service offering. Soon most everything will be hosted i.e. in the cloud.
Additionally, hosting is not bound to supporting geographic-centric clients. RTDS supports clients “around the world” in over 20 countries.
Just my 2 cents. Jim
Jim: Thanks for your 2 cents. We thrive on reader comments and value them. I think this is a tricky time for MSPs. There are so many alleged SaaS opportunities to chase. But many will turn into low-margin, commodity services — especially as Microsoft drives down BPOS prices.
Still, I think SMBs are willing to pay for mission-critical SaaS applications — virtualized desktops, in particular…
-jp