Last Friday’s government report indicating a dip in employment levels sent a scare through Wall Street and raised the spector of recession on the campaign trail in New Hampshire.

The irony is that more than half of 112 IT executives recently surveyed by the Society of Information Managers cited the ability to attract and retain IT personnel as their No. 1 concern for 2008. As I indicated in my previous blog, these concerns are among the ten reasons why I think on-demand services will soar in 2008.

Nonetheless, I’ve also received a growing number of resumes from IT/telecom professionals seeking positions in the on-demand market. Some want to get into this rapidly growing market. Others are looking for new jobs because their previous companies failed or have been restructured to better position themselves to capitalize on the on-demand services movement.

In response to … Read More »

Since the holidays are traditionally a time for people to take stock of the year past and offer their new year forecasts, here are my top ten predictions why the shift from packaged products to Software-as-a-Service (SaaS), utility computing and managed services will accelerate in 2008:

1. Services are Recession Proof: Escalating oil prices, the uncertain political landscape and faltering financial institutions beset with the aftereffects of the sub-prime lending debacle could mean a tough year for the economy. In this tenuous climate, consumer and executive confidence could decline, leading to an economic slowdown. As a result, many companies could hold back on their capital investments to mitigate their risks. The ability to adopt on-demand services on a pay-as-you-go basis will be a perfect sourcing strategy for businesses seeking greater cost-controls and flexibility.

2. … Read More »

Anyone who has been in the networking industry for over ten years will recall when the term ‘new world service providers’ (xSPs) was coined to denote a new breed of carriers who promised to disrupt the telecommunications industry. Some of these xSPs were competitive local exchange carriers (CLECs), others were Internet service providers (ISPs) or hosting companies.

Although they emerged with plenty of fanfare and promised to deliver a broad set of powerful new data services, when the dot.com bubble burst the majority of these companies disappeared as the telecommunications industry fell into a long, dark, ‘nuclear winter’.

The recent surge in demand for web-based services has rekindled the original dreams of those xSPs who survived and is attracting a new generation of service providers hoping to capitalize on this new round of business opportunities.

Over the past six months, a series of … Read More »

Last week, Dell made its second acquisition of a remote management services company in less than six months. After buying into the remote server management business with its acquisition of SilverBack Technologies in June, Dell expanded its remote management capabilities to encompass the desktop and mobile devices with last week’s acquisition of Everdream.

(A recent THINKstrategies whitepaper sponsored by Everdream gives some indication of how Dell will leverage the Everdream acquisition.)Both transactions are a part of Dell’s larger strategy to expand its product and service portfolio with a variety of automated solutions. The biggest of Dell’s recent acquisitions with this goal in mind was its EqualLogic purchase for $1.4 billion in cash, which will give Dell automated iSCSI storage area network (SAN) solutions optimized for virtualization environments.

While the EqualLogic acquisition dwarfs the SilverBack and Everdream buys, and has garnered far more … Read More »

I’ve been predicting for a couple of years that the worlds of business process outsourcing (BPO) and Software-as-a-Service (SaaS) would converge. In fact, you can also add managed services to the mix.

The reason for this prediction is that the BPO companies, especially the offshore companies, can no longer sustain their labor-intensive business models. Competition for skilled labor is intensifying, driving up operating costs and creating service continuity issues as workers jump between firms.

In response, the BPO companies must shift their operations from a labor-centric to a software enabled model. SaaS represents a natural solution for this business challenge. The BPOs will use SaaS to automate their existing processes and services, to expand their service portfolios, and to extend the reach of their operations.

The BPOs will use managed services to do the same in the IT infrastructure management arena.

The clearest example … Read More »

I’m pleased to announce that THINKstrategies unveiled today a new set of packaged services aimed at helping Software-as-a-Service (SaaS) and Managed Service providers (MSPs) ensure that they have properly designed and can reliably deliver their web-based solutions.

Our new Readiness Assessment Services (RAS) have been developed in response to the rapid rise in demand for SaaS and Managed Service alternatives to traditional, packaged applications and network/system management (NSM) solutions among end-user organizations of all sizes. This demand is attracting a rapidly expanding array of start-ups and established vendors attempting to capitalize on this new market opportunity.

We at THINKstrategies have found that many of these companies are not fully prepared to succeed in the SaaS and managed services markets because they’ve under-estimated the organizational, operational, sales, marketing and financial requirements of these service-oriented, subscription-based businesses.

Despite the growing interest and acceptance of SaaS … Read More »

Dell announced today it plans to acquire privately-held SilverBack Technologies, Inc., one of the original managed service providers (MSPs) who has transitioned its business to offer a service delivery platform that enables MSPs to deliver remote monitoring and management services.

This acquisition is important because it clearly shows that Dell is serious about strengthening its service delivery capabilities as part of its overall effort to regain its momentum in the market. It also adds further validation to the importance of managed services as a key component of today’s vendor and channel strategies.

I expect Dell to leverage SilverBack’s capabilities to add a new layer of managed services to its product portfolio. I believe Dell is in a unique position to capitalize on SilverBack’s capabilities because it has a strong relationship with customers as a result of its direct sales heritage. This relationship … Read More »

Yesterday’s announcement that SunGard intends to acquire VeriCenter clearly indicates that the competitive landscape in the hosting business is rapidly changing.

Not only is this another indication of industry consolidation and the growing role of private equity firms in the IT services sector, it is also another example of how the managed and Software-as-a-Service worlds are converging.

The first message that this transaction sends to any hosting company that hopes to be a market leader is that they can no longer depend on the simple annuity of managed server and co-location services. Instead, hosting industry leaders will need to offer a broader portfolio of managed and SaaS capabilities in order to become a strategic source for their enterprise customers.

Sungard is a perfect example of the power of private equity. On March 29, 2005 the company was acquired by a consortium of seven … Read More »

This week’s NetworkWorld includes an article about SpiceWorks’ new, free, desktop management solution. The on-demand service enables IT professionals to manage up to 250 devices. The company claims the free solution includes discover, inventory, monitoring, tracking, reporting and remote hardware and software problem resolution capabilities.

Giving away free IT/network management solutions isn’t a new idea. This is the same thing a company called VitalSigns did in the application performance management space a decade ago to penetrate the market before the company I was a part of, International Network Services (INS), acquired it to enhance our network performance management service called EnterprisePRO.

More recently, Klir Technologies has been using this same strategy to penetrate the market with its on-demand network performance management solution.

The broader trend is that IT professionals are becoming increasingly receptive to Software-as-a-Service (SaaS) and managed service ‘out-tasking’ alternatives to traditional … Read More »

The findings of a 2006 survey recently released by Gartner has brought renewed attention to the fundamental shortcomings of today’s major network/system management (NSM) platforms from companies such as IBM, HP, CA and BMC.

The survey found that 40% gave their NSM vendors a mediocre “C” and nearly 30% of the respondents gave their vendors a “D” because of their frustrations with the costs and hassles involved in deploying and administering the vendors’ platforms.

These frustrations aren’t news. When I was the director of strategic marketing at International Network Services (INS), we were the first company to rollout a network performance management software service on a subscription pricing basis in response to these same frustrations. Our EnterprisePRO solution was unveiled in 1996, prior to the advent of the managed service provider (MSP) and application service provider (ASP) ideas.

Unfortunately, although there were plenty … Read More »