Opinion: Margins will drop quickly on managed services, and VARs need to stay two steps ahead to keep up.One of the more popular managed services being offered today by solution providers is anything that has to do with storing, archiving or replicating data because most IT organizations are increasingly seeing these activities as crucial chores that are probably best left up to others.
Companies are coming to the managed services conclusion after spending years struggling with corrupted tapes that take forever to load using cumbersome interfaces across any number of incompatible backup systems that have accumulated in their data centers over the years.
Of course, the challenge that managed service providers are now facing is the fact that companies such as EMC, IBM and even Google are now offering online backup services direct to customers. This creates a problem because in a market without any significant differentiation, online backup services quickly become the next commodity of the day.
Click here to read more about the advantages and disadvantages of hosted backup.
Given that it's kind of interesting to look at the potential intersections between storing data and actually doing something more valuable like searching the data, a managed service provider hosting somebody's data already collected everything there is to know about their enterprise. So the next logical thing to probably do is offer the customer an additional service that allows them to search that data. There are two ways to go to provide that service.
The first is to build out your own enterprise search appliance using offerings from companies such as Google, Autonomy or Fast Search & Transfer ASA, which is in the process of being acquired by Microsoft, and then try to integrate them with the products being used to manage the data. Or you can look to a firm such as CommVault that has already taken the trouble to license, for example, the search-engine technology from Fast.
There's nothing new under the sun here in terms of watching a technology spin down the profit margin curve. But what is interesting is watching the accelerated rate this is happening around a managed service. Like it or not, profit-margin erosion in a world of managed services is going to be a lot faster than it ever was around traditional products. That means solution providers will have to be thinking about the next iteration of service before the first one ever gets deployed in order to stay one to two steps ahead of product lifecycles that are now moving at warp speed.
Click here to read more about how Microsoft is joining the race in desktop search and going head to head with Google.
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