The annual MSPmentor 100 report reveals growing use of AppLogic, ARCserve and Nimsoft among the world’s top MSPs.
While many VARs and MSPs struggle to embrace and master cloud computing, ScaleMatrix (www.scalematrix.com) is ahead of the pack. The San Diego, Calif.-based company, leveraging CA Technologies cloud platform, CA AppLogic, has rapidly rolled out a scalable, reliable cloud platform that generates predictable recurring revenues.
The ScaleMatrix-CA Technologies relationship extends across additional CA Technologies solutions, including CA ARCserve as a cloud data protection platform and Nimsoft for IT management and monitoring services.
“The CA Technologies relationship is a key piece of our cloud and managed services strategy,” said Mark Ortenzi, CEO of ScaleMatrix. “The bigger story involves design, deployment and management services as part of our standard cloud offering. We’re delivering on that today.” Eager to accelerate its cloud efforts, ScaleMatrix in 2012 launched a cloud partner program that’s attracting vertical market MSPs and channel partners. Early ScaleMatrix partner program members include iEmbed Solutions, which promotes CA ARCserve data protection services to healthcare and government customers.
CA Technologies Partners: Ranked Among Top MSPs
Take a closer look, and you’ll find ScaleMatrix ranked among the top MSPs in North America, according to the fifth-annual MSPmentor 100 survey and report.
The MSPmentor 100 report (www.MSPmentor.net/top-100-msps), published each February, identifies the world’s best performing MSPs based on such metrics as:
- Annual recurring revenues– percentage growth and dollar growth
- Number of systems, devices and customers managed
- Revenue per employee
- Focus on cloud services
A growing number of CA Technologies global channel partners –companies such as Eze Castle Integration, Logicalis, Long View Systems, outsourceIT and ScaleMatrix — were high performers in the most recent MSPmentor 100 results. Those partners typically leverage or promote a mix of CA Technologies software – again, CA AppLogic, CA ARCserve and Nimsoft.
“We’re seeing MSPs adopt our core platforms–like CA AppLogic and other solutions–as part of a strategy to blend cloud services and managed services into a scalable recurring revenue model,” said Christopher Goodman, senior director of sales, CA Technologies.
The Big Picture
Qualifying for the annual MSPmentor 100 report is no simple task. CA Technologies partners had to show rapid growth across multiple variables. A look at the MSPmentor 100 data reveals:
- Combined annual recurring revenues reached $1.04 billion in 2011, up 28 percent from $812 million in 2010.
- The top 100 MSPs now manage 2.7 million desktops and mobile devices, up a dramatic 50 percent from 2010.
- Those top 100 MSPs also manage 1.3 physical servers and network devices, up 91 percent from 2010.
But we’re also seeing a market shift, with many of the world’s top MSPs pushing aggressively into cloud services. Indeed, of the world’s top 100 MSPs:
- 59% now offer SaaS (Software as a Service), such as hosted e-mail and CRM (customer relationship management).
- 54% offer IaaS (Infrastructure as a Service).
- 31% offer PaaS (Platform as a Service).
CA Technologies MSPs Meet the Cloud
CA Technologies top channel partners – including MSPs and cloud services providers – are generating similar cloud momentum. One prime example: ScaleMatrix – which runs the CA AppLogic platform—saw its recurring revenues grow exponentially from 2010 to 2011. And the company’s headcount rose from five employees to 55 full-time professionals in 2011, according to the MSPmentor 100 report.
CA AppLogic is a virtualization-centric software platform that allows channel partners – VARs, MSPs, IT service providers and aspiring cloud service providers – to rapidly stand up SaaS and cloud services. In ScaleMatrix’s case, the company now offers:
- Private cloud, which enables customers to leverage cloud computing while maintaining security and data center-level control over dedicated IT resources.
- Hybrid cloud, which allows customers to move some – but not all – of their infrastructure off-site. The approach allows customers to “pluck the low-hanging fruit” for cloud adoption.
- Cloud in a Box, which allows customers to leverage a complete cloud platform and hardware stack for IaaS (infrastructure as a service), SaaS (software as a service) and/or complete virtual private data centers.
Meanwhile, Long View Systems – another CA Technologies partner – landed at the top of the fifth-annual MSPmentor 100 report. Long View, based in Calgary, grew its massive managed services revenue base roughly 13 percent in 2011. And overall revenues at the MSP and cloud services provider rose more than 30 percent, according to the MSPmentor 100 survey.
Kevin Crowe, director of cloud services at Long View, has been leading the company’s recurring revenue strategy. Key to that effort is Nimsoft, the remote monitoring and IT management platform that CA Technologies acquired in 2010.
While many MSP software platforms target smaller IT service providers, Nimsoft has purposely focused on the mid-market, where MSPs need more sophisticated, more scalable platforms to monitor and manage complex data centers. The Nimsoft platform is available both on-premise and in the cloud, and is widely used by MSPmentor 100 companies.
CA Technologies Empowers Service Providers
CA AppLogic and Nimsoft are part of a broader CA Technologies business transformation strategy. In recent years, the company has made multiple acquisitions to help channel partners drive recurring revenues from managed and cloud services. CA Technologies has also expanded its software licensing options, introducing service provider licensing that directly maps to MSPs’ monthly operational budgets.
Indeed, Goodman explained how CA Technologies software portfolio has evolved to increasingly engage next-generation CSPs and MSPs. Among CA Technologies key moves:
- Designing CA AppLogic from the ground up to expect hardware failures and recover applications quickly and automatically.
- Acquiring NetQoS for unified communications management, an increasingly popular cloud service.
- Extending Nimsoft beyond its network monitoring roots to support IT service management and help desk services – big priorities for MSPs and CSPs.
- Acquiring Oblicore to help MSPs and CSPs with service level management (SLA).
- Promoting CA Service Assurance solutions to help MSPs and CSPs with application performance management, infrastructure management, network performance management and service operations management.
- Updating licensing models for CA ARCserve and other software platforms to better meet the needs of service providers, while continuing to meet the needs of on premises customers.
CA Technologies MSP and cloud strategy is paying dividends. As of early 2012, More than 65 service providers run CAAppLogic as the foundation for their cloud services, and more than 400 MSPs run Nimsoft for remote monitoring services,according to MSPmentor and Talkin’ Cloud, two leading blogs that cover the IT service provider markets.
CA Technologies positions CA AppLogic as a turn-key cloud platform for enterprises and service providers. It eliminates the need to “bind” software to hardware. Instead, service providers can empower customers with virtual appliances. Moreover, existing applications can be launched into the cloud without changing the applications’ code or underlying architecture.
Retaining Complete Control
The CA AppLogic platform also allows MSPs and cloud providers to maintain control on branding, pricing, profit margins and end-customer billing. Those are big advantages in the age of cloud computing. Indeed, some VARs and MSPs are evaluating massive public cloud services – wherein the third-party cloud provider ultimately controls pricing, profit opportunities and the customer billing engagement. While such cloud services might work for some MSPs, the approach limits the MSP’s profit potential. CA AppLogic suffers from no such limitations.
Just ask ViaWest, one of the largest privately owned data center and managed services providers in North America. The company has 22 enterprise-class facilities across Colorado, Texas, Oregon, Utah and Nevada. And like a growing number of CA Technologies partners, ViaWest is leveraging CA AppLogic and Nimsoft in tandem. Founded in 1999, ViaWest has grown to employ 315 people while focusing on enterprise and SMB opportunities. ViaWest began deploying CA AppLogic about a year ago as part of a shared cloud platform for multi-tenant customers. “Our customers don’t even see the underlying platform; they’re shielded from the complexity which means they can focus on their business rather than technology,” said Jason Carolan, CTO of ViaWest.
Like many of the world’s best MSPs, ViaWest has consistently reinvested back into its business. The company has spent the past 12 years or so making constant investments in people, technology and data centers. In fact, ViaWest has pumped $144 million into its IT infrastructure over the past five years. Moreover, ViaWest has generated positive EBITDA (earnings before interest, taxes, depreciation and amortization) since 2002, an impressive feat considering the turbulent economic climate of recent years.
Working with CA Technologies and other strategic partners, ViaWest has also expanded to launch KINECTed Cloud, which offers an elastic cloud service that’s positioned for public-facing content, disaster recovery, staging, test and development resources.
The effort also includes a hybrid cloud solution for workload bursting, allowing customers to leverage additional colocation, hosting and cloud services on-demand. The approach allows customers to scale cloud services from ViaWest up or down based on a specific business need at a specific time. MSPs Becoming Cloud Aggregators and Cloud Brokers
Looking ahead, a growing number of MSPs are exploring cloud aggregator and cloud broker strategies. Cloud aggregators offer multiple cloud services to channel peers – such as VARs and MSPs. Cloud brokers simply resell third-party cloud services to end-customers.
CA Technologies is partnering with many of the world’s first cloud aggregators and cloud brokers. For instance, Ingram Micro Inc. has built a cloud aggregator service called Ingram Micro Cloud. The Ingram Micro Cloud service includes CA ARCserve as a data protection opportunity for VARs and MSPs.
Meanwhile, both ScaleMatrix and ViaWest seem to be embracing the cloud aggregator model, offering cloud services through channel partners. The partner programs are typically designed for VARs and resellers to plug their customers’ into cloud services from ScaleMatrix and ViaWest.
The ScaleMatrix partner program, launched in 2012, includes two levels for VARs and resellers:
• Strategic Partners that win business with ScaleMatrix earn 10 percent of the monthly recurring revenue for the life of the lease contract. Strategic Partners also earn 10% of net profit for non-recurring professional services, and 5% participation for recurring professional services. Additionally, partners are eligible for 10% of any subsequent (add on) contracted revenues as well. Referral partners earn 100% of the contracted monthly recurring revenue amount, among other revenue opportunities.
ViaWest, meanwhile, has tapped VP of Channel Sales Monty Reagan to drive that company’s partner program, which includes recurring revenue opportunities for ViaWest’s resellers.
Next Moves
For MSPs, the path forward seems clear – continuing to launch and build differentiated cloud services. The MSPmentor 100 survey results suggest that the MSP market remains vibrant, growing and increasingly focused on the cloud services market. And the best MSPs, partnering up with CA Technologies, are launching turn-key cloud services for their customers and their reseller channels.
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