Old Enterprise Dogs Learn New MSP Tricks - 2

Managed service providers focused on the enterprise from the start are feeling confident as they watch their cohorts run through a quick and painful dot-com-to-enterprise-customer conversion

Managed service providers focused on the enterprise from the start are feeling confident as they watch their cohorts run through a quick and painful dot-com-to-enterprise-customer conversion.

The time and money spent three years ago learning to help large companies run complex back-office applications such as Enterprise Resource Planning (ERP) gives them plenty of lead to trump competitors that dawdled over understanding Web site maintenance, the hard-core enterprise MSPs say.

And indeed, they are the only MSPs that have managed to get funding during the "nuclear winter" of the first half of this year. InteQ raised $57 million in a second round of financing in May. SevenSpace gathered $45 million in February, also in a second round of financing. Some MSPs are already fully funded through scheduled profitability — as Totality is, to the tune of $122 million.

"We go all the way from the network to the application layer," says Sharmila Shahani, Totalitys vice president of marketing and business development. "We are not talking to any Internet plays, so all of the systems we are managing are very complex on the back end, with the e-business aspect being the simpler piece. The security and legacy ERP integration makes it complex."

Part of Totalitys solution is a custom-built monitoring and management software system that allows companies to outsource and insource certain corporate applications. But competitor SevenSpace says custom builds are an unnecessary expense.

"The tools we are using are familiar to enterprise IT," says Bill Phelps, SevenSpaces senior vice president. That, he says, goes a long way toward establishing a relationship of trust with corporate IT and easing back-end integration.

The big challenge in the enterprise MSP space is channel relationships. The last thing businesses going the outsourced route want is finger-pointing by data center owners, MSPs and network operators in the event something goes wrong.

Competitive differences aside, enterprise MSPs also have their track records to rely on.

"We have been around for six years, and in the beginning, we were the only ones pitching the enterprise story," says Santhana Krishnan, InteQs CEO.