CEO Sees "Dawn Of Hardware As A Service"

This year will see the “dawn of hardware as a service,” a potentially disruptive trend that will shift power to solution providers that can deliver software, hardware and services in a utility computing model, N-able Technologies CEO Mark Scott said Friday at the company’s partner conference.

Initially, the trend will involve the use of leasing arrangements, but new and innovative hardware vendors also could emerge to support the model, Scott told about 250 partners and prospects at a regional partner conference in Santa Ana, Calif., the first of several such events that the MSP vendor plans to hold nationwide. “The hardware-as-a-service vendors will provide that through the channel,” Scott said.

N-able is driving the hardware-as-a-service theme home to its channel partners primarily because it sees the trend as a missing piece for expanding the MSP market and moving it toward a true utility computing model, according to Scott.

“As we bring together software as a service, managed services and hardware as a service, we’re getting to the fruition of utility IT,” he said.

The Y2K-like frenzy around managed services that emerged in the channel last year created some confusion, with many IT services companies claiming to provide managed services, Scott said. But MSPs that bundle hardware into their fixed-fee services would begin to differentiate themselves from those that haven’t made that shift yet, he noted.“I would say only 10 percent of our customer base right now is delivering fixed-fee services,” Scott said. “Hardware as a service enables a lot more people to do that.” MSPs are becoming more vertical and specialized as the market matures, and managing applications will become much more critical for MSPs to include in their offerings, he added.

Scott said that although some application vendors may think they will be able to sell direct to what he estimated was a $374 billion small- and midsize-business space, market power will actually shift toward MSPs and their customers.

“Once the channel becomes a key participant, you’re going to see software as a service grow incredibly,” he said.

To fuel that trend, N-able will continue to expand its ecosystem of partners—which Scott likened to Salesforce.com’s AppExchange—integrating the services into its NCentral platform. The company now has six partners—most recently adding StoreIT Online to its ecosystem—and soon expects to announce the addition of spam, spyware and virus-filtering services.

Partners welcomed N-able’s expanded offerings. “The beauty of the ecosystem is that we can have [the services] on our dashboard,” said Tony Safoian, president and CEO of SADA Systems, North Hollywood, Calif.SADA Systems is moving toward more hardware-as-a-service engagements, using lease agreements to bundle hardware and deploying thin-client solutions and hosting more of its customers’ infrastructure, Safoian said. “We’re seeing it more and more because [it makes] people less afraid to assume capital expenditures,” he said.

Alan McDonald, president of AllConnected, Simi Valley, Calif., another longtime N-able partner, said his company provides lease financing but does not yet offer hardware as a service. “We’re kind of there but haven’t dotted all the T’s and crossed all the I’s,” he said. “I’m very eager to learn about this at the [N-able] event.”