Intel And NaviSite Join in Managed Services Offering
New hosted services program targets channel partners active in growing SMB market
The burgeoning market for hosted and managed services in the SMB market has caught the attention of Intel in a big way. The vendor has teamed up with solution provider NaviSite to create a hosting service program that will provide Intel resellers with a suite of white-label managed services they can sell to SMBs and brand under their own name.
We have been looking at the market for quite a while, said Steve Dallman, vice president of Intels sales and marketing group and general manager of Intels worldwide reseller organization. Many of our resellers havent branched out into offering services. This program will give then the opportunity to provide services for a little money upfront.
The initial services available to Intel resellers are: hosted Microsoft Exchange Server, email archiving and filtering, hosted Microsoft SharePoint, remote monitoring, and online backup and recovery service. NaviSite, a leading provider of application solutions and hosting services, will host the services in its 18 large data centers.
The services will play in a combined SMB U.S. IP communications and managed services market that is growing at about 15 percent per year, according to research firm AMI, which estimates the market topped $30 billion in 2007.
More than 10 percent of U.S. SMBs now use a managed firewall service, and more than 15 percent used managed virtual private networks (VPNs), the researcher found in 2007. Approximately 11 percent of SBs and 15 percent of MBs use managed online/off-site data storage and backup, according to AMI.
The new hosted service program will deliver many benefits to resellers without them incurring any real costs apart from minimal set-up fees, said Jim Fanella, senior vice president of strategic business development, NaviSite, Andover, Mass.
Resellers will be able to extend their relationships with their customers by providing core services on an ongoing basis and to move beyond the traditional break/fix posture, said Fanella. There is pent-up demand in the SMB market for managed services at a fixed monthly fee.
Fanella said each fee turns into a recurring and predictable high-margin revenue stream for resellers.
We dont have a good feel for the actual margins yet as the program is so new, said Dallman. The margins seem to be all over the map. However, our research indicates that margins on services are typically much higher than margins on hardware, while services revenue is about half of hardware revenue. So resellers have plenty of opportunity to grow their service business.
Intel is recommending that resellers take a holistic approach to this program, said Dallman. We think the strongest strategy for them is to combine their hardware and services activities so they can build solutions that work best for their SMB customers.
The revenue stream is highly scalable, said Fanella. Resellers will be able to grow their business by selling more services with long-term contracts, he said.
The sales cycle for managed services is relatively short, said Fanella. SMBs understand the value of getting a monthly service at a low, fixed rate and no large outlay of cash upfront.
The program will also give channel partners the benefit of dealing with a single services provider in NaviSite, thereby avoiding any compatibility and resolution issues for resellers or their customers, said Fanella.
Resellers that sign up for the hosted service will receive sales and technical training and marketing and sales support from both Intel and NaviSite.