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Techaisle Blog

Insightful research, flexible data, and deep analysis by a global SMB IT Market Research and Industry Analyst organization dedicated to tracking the Future of SMBs and Channels.
Anurag Agrawal

Cisco’s Master Move in Combining Cloud & Managed Services Channel Programs

managed services - Techaisle - Global SMB, Midmarket and Channel Partner Market Research Organization - Techaisle Blog Cisco-Techaisle-Blog2-300x201 Announcement

Cisco has announced a new Cloud and Managed Services Program (CMSP) that integrates its currently existing Cloud Provider, Cloud Services and Managed Services Channel Programs (MSCP) into one. Besides streamlining incentives, discounts and payments for its partners, the program also aims to simplify pricing for Cisco-based cloud and managed services offerings. The program will also enable collaboration and sharing of complementary opportunities between partners through a microsite via Cisco’s partner portal. All partners are expected to transition to the CMSP by August 2013.

Techaisle Take

We believe that with one master move Cisco is strategically addressing the US$94 billion global SMB opportunity by 2016.

Techaisle’s global channel surveys have shown that Cloud, Mobility, and Managed Services Solutions together are changing the SMB channel landscape as these solutions are revolutionizing IT utilization by SMBs. The new paradigm would be the "3-in-1" Channels offering Mobility, Cloud, and Managed Services as a single offering. We first wrote about the 3-in-1 channel here. And now Virtualization is quickly becoming a potent arsenal in the SMB channel partners offerings.

Techaisle’s corresponding SMB research has consistently shown that SMBs want mostly integrated solutions to limit complexity and therefore seek partners that are capable of such deliverables but very few partners currently do so as they are all camped in either one or two solution corners and few seem to embrace a holistic solution view - and this is making SMBs unsure of overall benefits and desire to spend.

With its current announcement Cisco is removing some of the barriers by bringing channel partners serving managed services and cloud needs of SMBs under a common cluster. Since many SMBs want to obtain all services from a single provider, it is important for broad product/solution vendors to evaluate all their partners, seek and cluster partners based on where they are with regards to capabilities of delivering complete solutions and introduce programs to support development. As the dividing line between cloud and managed services is becoming thin, Cisco has just done it, that is, created a single program that should:

  • Enable channels to build more dynamic and serious partner-to-partner collaboration to collectively address complementary opportunities

  • Enable Cisco partners to add capabilities, such as, managed services to an existing cloud services

  • Attract newer partners to join Cisco program

  • Help current channel partners qualify and move up Cisco’s channel partner pyramid


The data on the right from Techaisle’s channel study (N=2851) shows that channels that serve managed services - Techaisle - Global SMB, Midmarket and Channel Partner Market Research Organization - Techaisle Blog Cisco-blog-13-1024x644 the SMB segment are keen to offer multiple services that straddle cloud and managed services. Cisco’s new program should open up opportunity for its channel partners to offer both cloud and managed services using Cisco platforms.

If we look at the survey data at micro-level, we find that is a higher percentage of Channel Partners that are offering some type of Managed Services Solutions than they are offering Mobility Solutions or even Cloud Computing. The channels falling in the green columns will benefit immediately, those in the blue columns will find the program attractive but those within the red columns in the chart would be of immense importance.
Managed Services has been is of more critical importance for SMBs than Cloud or Mobility which is a key reason why there are more Managed Services partners than Cloud Computing providers. Additionally, Managed Services took root a few years back while Cloud Computing is a more recent phenomenon. Mobility has been in existence for a long time, however, it should be considered absolutely new in its current form with the availability & use of several mobile devices & other enabling technologies, namely Cloud & Remote Managed Services.

It is clear that Managed Services has been the most important offering for Channel Partners, as they evolved from a typical value added channel to offering break-fix services and remote managed services.

managed services - Techaisle - Global SMB, Midmarket and Channel Partner Market Research Organization - Techaisle Blog Cisco-blog-2-219x300

The path being chosen by Channels to move from one offering to the next is strongly dependent upon their current offering. Those that are in the mobility space are moving to cloud, while those in the cloud are moving to managed services.

Understanding the channel dynamics and current offerings gives clues in the direction they will move. For those that are offering only one of the services there is a clear path to adding services. In fact Techaisle survey shows that the channels have chosen their path of selection.

Channels are also interested in offering mobility solutions, however, it is also clear that mobility has become possible due to cloud and managed services allowing employees to work from anywhere, anytime and from any device.

 

The responsibility now lies with both the channel partners and Cisco to make the program a success. However, there some other steps that Cisco needs to take as well.

  • Extend the reach of its Smart Care to cover cloud based services

  • Develop capabilities that not only work with Cisco's networking devices but also with client devices. Although it must be said that Cisco is addressing some of those needs through its partnerships with other vendors

  • Further the agenda on not only BYOD but also just BYO

  • Market the program aggressively. Channel partners are being courted and trained by many other vendors

  • Use the program to establish a strong presence in the datacenter space


With the latest move, Cisco may have begun to shift the tide in its favor more decisively.

Anurag Agrawal
Techaisle
Davis Blair

China Rising - Mid-Market Onsite and Remote Managed Services nears $3B

A recent Techaisle survey of 1,862 SMBs in China found the market for Onsite/Remote Managed Services has been growing rapidly and is near the $3B mark in the mid-market space; expected to reach $2.847 billion in 2012.

managed services - Techaisle - Global SMB, Midmarket and Channel Partner Market Research Organization - Techaisle Blog China-Mid-Market-RMS-Opportunity-e1346213492267

 

Other important points include that the 250-499 employee segment represented the largest share among company sizes, with 47.5% of the total. This is followed by the 100-249 group with ~30% and finally the 500-999 category with ~23%.


On the Services side, PC Services are the largest segment with $800 or 28% of the total, followed by Other Managed Services $509M or 18%, and Server at $485 or 17%, Seven of the top 10 service segments top $100M, providing a good  set of opportunity segments.

managed services - Techaisle - Global SMB, Midmarket and Channel Partner Market Research Organization - Techaisle Blog Shanghai-swft9vp-300x204 Having lived in Korea and  Hong Kong from the early 1980s through the mid-1990s and watching the Seven Tiger markets rise from bit players to important gears in the global IT supply chain, this doesn't really come as a surprise - however the rapidity and thorough break away toward private property and commercial economy  that China has managed, exceeds even the early predictions and forecasts.

The overwhelming reason for using Managed Services in China across all segments was Cost Control. This was followed by the need to Focus on the Core Business which is very difficult for SMBs with limited skilled resources, even in a country like China where hiring a new FTE to support basic IT infrastructure is relatively inexpensive as compared to many other countries.

 

The third most important reason was to free up the IT staff so they can add other types of value to the organization; helping to move IT from a Cost to a Profit Center.

 



 

Techaisle's SMB managed services adoption and trends data and analysis is available as individual country reports for US, UK, China, India, Brazil, Germany, Australia.

 



Davis Blair
Techaisle

Research You Can Rely On | Analysis You Can Act Upon

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