Hybrid Services, Product Model Drives Profits In 2011

By Gennifer Biggs, security, storage, and managed services editor

It was no surprise to find the full Autotask team at the N-able Partner Summit in Arizona; Autotask is among the managed services vendors tightly integrated with the N-able RMM solution. Len DiCostanzo, Autotask SVP and Dean of the Autotask Academy, took a few minutes between presentations to catch me up on Autotask's plans for 2011. "We're really trying to hammer home the hybrid business model message," explains DiCostanzo. "We want our partners to have a balanced offering, a mix of product and services." He adds that while the PSA vendor encourages VARs to develop a managed service practice, it also wants them to consider how to blend product offerings onto that recurring revenue model. "We are looking at offering a combination of products and services, a solid deployment, but then we want them to consult long term, bolt on those services, and built a lifetime business relationship with their customers," says DiCostanzo.

Autotask has reinforced its message with last year's acquisition of VARStreet, a product that allows MSPs to automate sourcing and purchasing products through 18 distributor and vendor partners, taking much of the costly manual labor out of the product equation.

For those MSPs that shifted entirely to services, Autotask cautions that they are missing a revenue opportunity, but more importantly, may be opening the door to competition that can offer both services and products. "The hybrid model helps you ascend to the trusted advisor status, then bolt on managed services and you're set with your customers for the long term," says DiCostanzo.

Listen as DiCostanzo explains the drawbacks of focusing only on services vs. a hybrid selling model.