IBM and Dell Intensify Managed Services Initiatives

Includes: DELL, IBM
by: Jeffrey M. Kaplan

As I've suggested multiple times, the major hardware and software vendors are aggressively pursuing the tremendous business opportunities in the managed services market. Now, the key questions are how will they bring these offerings to market and what role will their channel partners play in provisioning these new services?

The two most recent examples are IBM's (NYSE:IBM) new Express Advantage security-as-a-service offerings and Dell's (NASDAQ:DELL) April 24 closing of its MessageOne acquisition.

IBM's security-as-a-service solutions are its first on-demand offerings based on its acquisition of Internet Security Systems in August 2006. The new solutions will primarily serve small and mid-size businesses [SMBs]. They include Express Penetration Testing Services; Express PCI Assessments; Express Multi-Function Security Bundle, which includes protection against worms, spyware, anti-virus and spam in a unified threat management offering; and Express Managed Protection Services for Servers.

These solutions have been historically been offered as on-premises offerings, but Peter Evans, director at IBM ISS, is quoted in eWeek as saying:

Spending on security is rising 6 percent a year... But spending on the labor needed to manage that security is rising 11 percent a year; therefore we need to help SMBs remove some of the cost by offering solutions as fully managed services.

IBM will sell these services to SMBs through its ISS channels, but you can bet it will also offer them directly to some of its larger, key accounts.

Meanwhile, in its announcement of the completion of its $155 million acquisition of MessageOne, the company said:

With its acquisition of SilverBack Technologies, Inc., Everdream Corp., ASAP Software Express, Inc. and now MessageOne, Dell is architecting an integrated service delivery platform of SaaS applications that will enable it to remotely monitor, maintain, troubleshoot and address the majority of routine IT infrastructure issues that challenge businesses of all sizes. The company anticipates that services such as patch management, anti-virus, online backup and recovery, asset tracking, software license management and e-mail continuity delivered and managed over the Internet will reduce the cost of infrastructure management and free budget for the IT driven innovation that grows business.

This statement makes more explicit the strategic implications which I outlined earlier this year. Dell's President of Global Services, Steve Schuckenbrock, goes on to say that Dell is "building a services supply chain" that will give customers greater flexibility regarding how they support their IT environments. Once again, Dell is offering these services to its growing array of channel partners but is also expecting to deliver these services directly to its key accounts.

So, channel organizations must determine how to fully leverage these offerings while at the same time effectively differentiating themselves from others, including the vendors, who will be offering the same managed services.