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SaaS And Managed Services: Friends or Foes?

SaaS (software as a service) and managed services are often mentioned in the same breath as though they were part of some collective goodness, but for many MSPs they have actually been more like mortal enemies.

In fact most MSPs have focused almost exclusively on the bread and butter servers, desktops, networks and applications that reside within the walls of their SMB customers. If SaaS was considered at all it was generally seen as a threat that would hopefully just go away if ignored long enough.

One result is that SaaS vendors have made very little headway in the channel. Selling SaaS has often been viewed by the channel as the equivalent of selling their birthright. With visions of all those shiny servers that have kept them alive through good times and bad for the last 20 years suddenly disappearing off into the cloud.

However, the huge NetSuite IPO (initial public offering) proves that SaaS is not going away. Now even Microsoft's Small Business Server is being delivered as a hosted service in the cloud. The money is beginning to flow into SMB SaaS and the MSPs need to deal with it. Here's how.

Rather than watch this unfold from the sidelines, MSPs need to assert their role as trusted IT advisors and embrace SaaS as part of the expanded IT world of today. In fact never have the opportunities been greater to increase your relevance to your customers and make some good money along the way. This is because SaaS only operates in the context of the broader IT environment and introduces as many new problems as it offers business advantages in business process simplification.

Level Platforms was a NetSuite user in the early days and just like everything IT, sometimes it didn’t work. And then the finger pointing would start. “It’s the application”, “it’s the network traffic on the LAN”, “you need more external bandwidth”, “try clearing your temp files on your desktop” and in the end it still didn’t work and most importantly, there was no single point of accountability to fix it.

In order for SaaS to really impact the SMB market it needs managed services. It needs an MSP that is monitoring and managing the entire SMB environment whether that is on premise, hosted in a data center or offered as a pure Web-based application. And when they receive an alert that a SaaS application is not meeting its SLA, they need to be able to work from their central dashboard to diagnose the problem across all the possible areas of potential failure and deliver a solution.

Level Platforms includes full web site monitoring to allow our partners to address this opportunity with big plans to extend this even further in 2008. Many innovative partners are expanding their value to the customer as well as expanding the value of their business by recognizing that SaaS is not only inevitable, it represents the next big opportunity for managed services success.

Peter SandifordNote: Peter Sandiford is CEO of Level Platforms. Guest blog entries such as this one are contributed on a monthly basis as part of's Platinum sponsorship.

Discuss this Blog Entry 7

A James (not verified)
on Jan 15, 2008
Peter, I was surprised to see your reply to me. Thanks. I work for a distributor that has relationships with multiple managed service platform makers. I can't reach out to you directly because of my position but you should know that my company is in touch with LPI to discuss the saas market more fully. I think we have some common goals with saas.
A James (not verified)
on Jan 15, 2008
Peter, This is the first thing I've read that clearly connects the dots between saas and managed services. Does Level Platforms currently offer a way to manage saas applications or is this something I should watch for in the near future?
on Jan 15, 2008
James, This has been in the product for almost a year and is being used principally to monitor hosted SaaS e-commerce sites. We have significant plans in this area. We would of course be pleased to understand your particular circumstances and determine the best way to configure this feature to meet your needs. Please feel free to call me directly or contact anyone here to better understand the details of the current offerings and roadmap in this area. Peter
messels (not verified)
on Jan 22, 2008
hi, there was an important presentation by marc benioff ceo of last week that i thought was relevant to this topic. here's the link. i'm personally thinking that PaaS, with access to a full suite of APIs, along with a well-rounded internal development team is going to severely challenge the need for smaller SaaS development companies. any thoughts?
Josh Clifford (not verified)
on Feb 6, 2008
Hey Peter, I was thrilled to find your post about SaaS. I truly believe that for the first time we have reached the point where it is practical for a business to run with little to no infrastructure. MSPs will need to embrace SaaS, HaaS, PaaS, hosted phone systems, hardware as a service, and hosted application of all types if they intend to survive into the future. I am excited that LPI has plans for this going forward and as always I look forward to seeing how your tool grows to support the MSP community in this endeavor. - JC
raquo; SaaS represents the next big opportunity for managed (not verified)
on Feb 6, 2008
[...] SaaS And Managed Services: Friends or Foes? [...]
on Mar 1, 2008
I must Agree with Josh Haas, Saas and the rest are all the wave of the future, I have recently introduced a complete One Rate program where by they get Monthly Maint either on-site or remote, free phone support, Level Platforms and Untangle all owned and maintained by my company. The response has been overwhelming because at the end of the day all the client wants to know is how much will this cost for the year and what am I getting for it and can it make me and my staff hands off to do what ever it is we do. The answer is obvisiouly a complete managed service solution with a mix of Haas, Saas and now even Paas. Steve
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