Systems integrator FusionStorm is looking to capitalise on managed services in a big way by merging its existing practice with the resources of thriving provider Synoptek. The new joint venture will operate under the Synoptek brand and support FusionStorm's midmarket and enterprise customers.
"We believe this partnership with Synoptek will significantly benefit both companies and our mutual customers," said FusionStorm CEO Dan Serpico.
"Synoptek is laser-focused on managed services and cloud solutions, with a global team and delivery infrastructure that provides a world-class customer experience. This partnership will enable us to deliver an enhanced managed services offering while continuing to build upon our expertise in enterprise-class datacentre infrastructure."
FusionStorm is calling the deal a merger of sorts, but it's also an investment and a sale in that FusionStorm technically sold its managed services assets to Synoptek. It's also holds a financial interest in Synoptek and will have a seat on the combined company's board.
The proceeds of the deal will help both companies expand their core competencies: data center infrastructure for FusionStorm and managed and cloud services for Synoptek.
The FusionStorm-Synoptek deal is one of several managed and services initiatives recently announced by large systems integrators. As more enterprise and midmarket companies look to shift their investments from on-premises infrastructure to cloud and hybrid assets, systems integrators are adjusting their models, products and value propositions.
Last week, US SI giant Presidio announced its own managed services initiative of 23 unique offerings that include network, collaboration, datacentre, security, workplace and systems management.
"Our objective is to enable our clients to use their technology investments as quickly and efficiently as possible. The more resources and cycles they can spend on their own business innovation as opposed to maintenance and operations enhances the financial impact they can have to their organisations," said Presidio CEO Bob Cagnazzi. "Managed services is core to our business so it does not have to be for our clients.2
Earlier this year, global SI Logicalis Group announced its MSP Expert Extension Team (MEET), a programme in which the integrator is extending its managed services capacity, technical resources and support to smaller providers. In essence, Logicalis is building a channel for its service offerings as well as targeting enterprise customers with its own services.
Dimension Data, one of the largest SIs in the world, has been steadily expanding its cloud and managed services capacity, as well. Dimension Data has built or acquired assets that allow it to deliver cloud-based applications, host infrastructure and provide managed support. And FishNet Security bought Logic Trends to bolster its security services, particularly in identity management.
In general, managed services are the most profitable offering in the channel. Resellers across the board earn as high as 70 per cent gross margins on various managed services packages. Well-oiled managed-services practices generate predictable revenue and profitability, which helps with cash flow, planning and company valuations.
Relatively speaking, SIs have been slow to get into the managed services game. While the SMB and midmarket channel converted break/fix offerings to managed services, SIs stuck to their hardware, software and professional services.
Driving managed services development among SIs is boosting market opportunity and competition. Vendors, carriers and hosting companies are offering managed services to create new revenue streams and gain deeper entanglement with customers.
While many vendors and service providers will work with partners on market development, sales and customer support, the economics is different and the intent is to retain value in the engagement. That equals conflict.
SIs haven't always been the best providers of managed services. Their DNA is firmly based in hardware sales and professional services. This could be part of the reason FusionStorm chose to partner Synoptek rather than continue an organic development of its offerings.
Deals like FusionStorm-Synoptek and initiatives like Presidio show the managed services opportunity isn't lost to larger systems integrators. They see managed and cloud services converging, opening tremendous potential for sales and deeper customer engagements. It's evolution in real time.
Larry Walsh is president and chief executive officer of Channelnomics
As part of our special editorial partnership, CRN is republishing this article from Channelnomics
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