Back to the Future

Deja Vu: Great MSPs Are VARs

Kevin Crowe 300x200Some top managed services providers (MSPs) are reaching into their past to drive their businesses into the future. A case in point: Kevin Crowe’s career has come full-circle at Long View Systems. First, he played a key role as the company pushed into managed services. By 2011, he strongly influenced Long View’s push into cloud services. These days, he’s VP of procurement services — helping Long View’s customers to buy IT hardware and software.

The key takeaway: Even the largest, most successful managed services providers (MSPs) and cloud services providers (CSPs) see new opportunities to help customers select and deploy on-premises solutions. In simpler terms, Long View Systems has evolved into a Total Services Provider (TSP), Crowe says. Here’s how.

“For us it’s really about an IT consumption conversation,” says Crowe. “We’ll help you to consume IT whether it’s in the cloud or in your own data center.”

Six Opportunities — Each Linked to the Other
Scorecard Long ViewCrowe sees six dials that Long View Systems can turn for customers — helping each customer to fine-tune their IT operations and business performance in multiple ways. Moreover, those six dials aren’t really separate from one another. Much like a band with six instruments, the idea is to create a unique harmony across these areas:

  1. Infrastructure — typically servers, storage and networking that form converged infrastructure. Key suppliers include Flexpods (from Cisco and NetApp) and VBlocks from VCE, among others.
  2. End-user experience — involving mobility and collaboration.
  3. Application support
  4. Cloud services
  5. Procurement of hardware and software
  6. Wrapping managed services around each of those five other piece parts.

Procurement: Far More Than “Selling Stuff”

Crowe oversees a team that helps IT departments lower their overall cost of product acquisition. That’s right: He helps customers to acquire IT products at the most effective prices — a mind shift from the classic IT channel, to be sure.

As part of that effort, Crowe’s team can turn the additional dials mentioned above to help customers optimize their overall IT and business outcomes.

Keeping Score

5 Stages Business ScorecardSo far, the strategy has paid off. Over the past decade, Long View has gradually grown to roughly 1,100 people — moving from the startup and early growth stages to sustained performance and a few pivots. One of the company’s more recent offices, located in Toronto, has grown from zero employees to 100 people over the past year or so.

At the same time, Long View’s IT service desk business remains massive — supporting roughly 143,000 desktop and mobile end users, and 104,000 incidents every month, according to a September statement. The company has five dedicated service desk centers in North America. Long View’s End User Outsourcing offerings include service desk, deskside and field support, Remedy as a Service (RaaS), ITIL and ITSM assessments, according to the company.

Macroeconomic challenges have popped up from time to time — including plummeting oil prices that pressured Long View’s energy customers. But there again, the company managed to pivot and promote cost-savings services in the cloud. And the effort reinforced Long View’s overall mantra to customers: “Consume it your way.”

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    Len Sandy:

    A few followup questions. What percentage of MSPs resell product? Does reselling hardware and software drag down an MSP’s overall profit margins? Percentage wise, should product reselling represent less and less of a service provider’s revenue as more businesses consume as a service? TY.

      Joe Panettieri:

      Hey Len,

      I hope you don’t mind if I reply with a few “general” answers combined with a few specifics…

      1. What Percentage of MSPs Resell Product?

      Generally speaking, the vast majority but I don’t have a hard number. Check our Managed Services FAQ, and you’ll find some info about MSP pricing models and the fact that the best MSPs still derive about 28 percent of revenues from product reselling. Source: Service Leadership Inc.

      2. Does Reselling Hardware and Software Drag Down an MSP’s Overall Profit Margins?

      Depends on what you’re reselling. A Cadillac or a Yugo (remember them?).

      3. Percentage Wise, Should Product Reselling Represent Less and Less of a Service Provider’s Revenue as More Businesses Consume IT “As a Service”?

      Potentially yes. But some infrastructure — the network layer — won’t disappear from the on-premises world anytime soon.

      Free to poke around our FAQ Area to see some of our standardized answers to business model questions. Thanks for reading/visiting ChannelE2E.

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