Microsoft-LinkedIn deal bodes well for channel partners

Microsoft's buyout of LinkedIn signals more opportunities for IT service providers; meanwhile, Xerox continues its split into two companies; more channel news from the week.

Two channel-oriented technology giants made news this week, one for expanding and one for breaking up.

On the growth side, Microsoft agreed to purchase LinkedIn Corp. in a deal valued at $26.3 billion. The transaction is expected to close by the end of 2016. Xerox, meanwhile, marked the latest stage in its plan to break into two publicly traded companies, unveiling the new names of the entities. The company expects to complete the split by year's end.

Microsoft, with 2015 revenue of $93.58 billion, will gain a nearly $3 billion company in LinkedIn, which operates a professional network of more than 433 million members. Channel executives believe the data from LinkedIn will be incorporated into Microsoft platforms such as Office 365, Dynamics and Skype.

Craig McQueen, director of the Microsoft practice at Softchoice, an IT services provider, said the ability to bring additional data and information into Microsoft platforms will make them more valuable to customers. IT service providers will find new business as customers seek to harness that value.

"There will be a broader services opportunity because there is more capability within the platform that we can help them adopt," he said.

McQueen pointed to the example of Office 365, which he said many people think of as "email in the cloud" rather than a comprehensive business productivity suite. LinkedIn will provide additional Office 365 capabilities that Softchoice can help its customers use. He said a proper adoption and training plan will enable customers to use more of the suite.

Xerox, which in January 2016 announced plans to separate into two companies, said the business process outsourcing part of the company will be called Conduent Inc., while Xerox's traditional document technology business will continue to be known as Xerox Corp. Conduent will have revenue of about $7 billion and 96,000 employees. Post-split Xerox Corp. will have about $11 billion in revenue and about 39,000 employees. Numerous channel companies sell Xerox printers and supplies and partner with the company in the managed print services space.

Atera reveals an MSP pricing pattern

Research from Atera, a provider of a remote monitoring and management, professional services automation and remote connections platform, suggested that more than half of MSPs are undercharging for their services.

The data came from Atera's Benchmark business intelligence platform, which the company released last month. The Benchmark data is collected from Atera's managed services provider (MSP) customers, anonymized and then analyzed with the goal of continually sharing insight with MSPs to improve their business processes.

"We are democratizing the ability to be a really efficient MSP," said Gil Pekelman, CEO of Atera. "If we can come up with one small, simple insight and it can maybe change [an MSP's] life … that's something that [is] really exciting for us."

Among Atera's first findings was that the managed services market will pay more for faster response times. According to the Benchmark data, 45% of MSPs charge their customers between $45-$99 per hour, while 55% charge between $100-$155. The remaining 5% of MSPs charge $200-$250 per hour because they offer an added expertise or special service. The MSPs that charge more respond 43% faster to tickets than those who charge less.

"There is a correlation between the speed [MSPs] close … a ticket and what they charge," Pekelman said. "A company that is offering faster service is actually able to double what they charge per hour for that service. … Half of MSPs don't realize that."

SMBs stick with on-premises backup

While cloud-based backup provides a channel growth opportunity, service providers may want to keep an on-site option on hand.

Research from Clutch, a B2B research firm, noted nearly half of the 304 small and medium-sized businesses (SMBs) it surveyed said it is important and necessary to use both on-site and online options for backing up data. In addition, 42% of the SMBs cited on-premises backup as more important than online backup.

Clutch, citing survey findings, said, "SMBs are reluctant to abandon on-site backup and adopt cloud-based backup exclusively, mainly due to concerns about security and loss of control over important data."

IT channel news roundup for the week of June 13

Here's a look at the highlights:

  • Pivot3, which provides hyper-converged infrastructure and flash storage products, has inked a distribution agreement with Promark Technology, an Ingram Micro company. Pivot3 also unveiled an a new version of its vSTAC offering that takes advantage of technology gained in the company's February 2016 acquisition of NexGen Storage. The product combines Pivot3's hyper-converged appliances with a multi-tier flash array.
  • Distributor Tech Data launched a community of independent software vendors (ISVs) to support the ecosystem of Microsoft products offered by the Tech Data Cloud business unit. The ISV products are available in the U.S. through the Tech Data Cloud Solutions Store. The ISV community includes Spanning, Akumina, RapidStart CRM and Cirrus Insight. Tech Data's portfolio of ISV products also includes BitTitan's cloud enablement services and Skykick cloud management technology.
  • Cloud distributor Pax8 signed an agreement with Vision Solutions, a company that provides disaster recovery, high availability and migration software for hybrid data centers. Under the agreement, Pax8 will provide the complete suite of Vision Solutions services as well as the company's Double-Take disaster recovery line.
  • POS Solutions will resell security services from Netsurion, a provider of remotely managed data and network security services for multi-location businesses. POS Solutions, which Netsurion has named a Gold Partner, will bundle its point of sale packages with Netsurion's Brand Guard services. The reseller relationship will focus on the restaurant, retail and hospitality markets.

The Market Share is weekly news roundup published on SearchITChannel every Friday.

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