We asked about 600 of our partners whether they plan to develop their own MSP business or provide managed services in the backup and recovery management area.

About 40% told us they’re already doing so. About a quarter said they are going to within the next 12 months. And the remainder – a third of respondents – simply said ‘No’.

Interesting? Yes, but here’s where it gets even more interesting.

Because guess what? Our survey is annual, and we asked partners the very same question last year. And what they said they were going to do, compared to what they actually did, is very interesting.

Last year, 40% of partners said they’d already transition their business to MSP; 29% said they were planning on doing so in 12 months; and the remainder – a third – simply said “no”.

So let me get this straight.

40% of partners were selling MSP services last year.  29% said they were going to start selling MSP services within a year.

Here we stand, 12 months later, and still only 40% are selling MSP services.

What does that tell us? They’ve had a change of heart.

Despite last year’s plans to start offering MSP services, in general, the channel has not done so. In fact, if you dive into the numbers, the number of channel partners flat out saying “No, we’re not going to offer MSP services” has actually gone up (from 31% in 2012 to 35% in 2013).

Why? Is the customer demand just not there? Is it too difficult to make the change? And what are the implications of all this?

The Law of Supply and Demand

The law of supply and demand would suggest that if customers are moving to off-premise data protection, partners will follow suit (and follow the trail of money).

Our survey queried partners about their customers’ use of on-premise and off-premise data protection solutions. More than half (55%) of customers are still using on-premise data protection and disaster recovery, but a quarter (25%) are now using cloud and 30% are buying some sort of managed service. So the demand is strong, but perhaps not overwhelmingly so.

Tough Questions

It can be difficult for a reseller looking to get into the MSP business. Tough decisions abound and can be overwhelming.  You ask yourself, should I sell pre-packaged SaaS solutions (there’s a limited amount available via the channel) or services I’ve built myself?  Should I start my own datacenter (not a necessity in today’s environment), use public cloud platforms, or rent datacenter space from a provider? Should I set up a remote management and monitoring service for my clients, with a view to expanding this service to off-premise data protection down the road?

The truth is that there aren’t hard and fast rules on how to do any of this.  What is certain, however, is that if more and more of the customer’s budget is spent with IT service providers, traditional resellers do need to evaluate whether they need to change their business model to provide new managed services that meet customer needs.

CA Technologies is committed to real partner enablement around our CA Arcserve data protection technology, backed by a MSP Center of Excellence and our MSP Licensing Program. And we’re focused on making things as simple as possible. Our model is to help alleviate the difficult decisions that emerge as business models evolve, offering for example low monthly subscription pricing per virtual machine, per server, per terabyte or per socket – whatever way makes the most sense for a given MSP’s business and customers.

So let’s stay tuned until the next year’s survey results come out. It will be fascinating to see both the perceived demand for off-premise data protection solutions; as well as the evolution of our partners’ business models. We look forward to sharing that with you then.