Its Always Been a Matter of Trust

Managed service firms court solutions providers to extend their reach.

John Mcintyre, chairman and CEO of Affinity Internet, considers trust to be the toughest stripe to earn in this industry. Earning that recognition from solutions providers, is a challenge he is set on meeting.

Affinity Internet is a managed hosting service provider, a new breed of company within the data center and Web hosting arena that targets small and midsize businesses to offer customized hosting solutions through a network of Web integrators, solutions providers, VARs and systems integrators.

"We have to earn [solutions providers] trust," says McIntyre, who has seen earlier hosting plays aimed at solutions providers fail, such as AT&Ts Web hosting push two years ago.

Also, he has seen the problems faced by solutions providers that had their accounts poached by ASPs that once courted them, says McIntyre, a co-founder of Interliant, an ASP pioneer.

Affinity and other MSPs like TriActive, Telenisus and Sentire are approaching solutions providers by creating solid partner programs. They are trying to avoid the missteps made by ASPs, who in some cases, stole their partners accounts.

That type of behavior has made it an uphill push for MSPs who are trying to create partnerships by earning their partners trust early on, says McIntyre.

Affinity, founded in 1999 after raising $60 million, has built its data-center backbone through several acquisitions. It has two centers, one in Los Angeles and the other in Baltimore. As the company matures, its base of channel partners is changing from Web developers to solutions providers, VARs and consultants, says Tiffani Bova, director of sales and channel programs at Affinity.

The company offers hosting with a value-added suite of services that include e-commerce, e-mail database management, load balancing, firewall, global content caching and VPN services.

In the case of TriActive, an MSP, it originally sold its services through a direct sales force. Now the company is recruiting an indirect sales channel, says Todd Clayton, VP of marketing at TriActive. The four-year-old company envisions that 50 percent of its business will come through the channel in a years time.

Clayton says the MSP model has matured and is channel-ready. TriActive provides subscription-based systems-management services to companies with 200 to 5,000 managed devices (desktops, servers and networking gear).

"Were looking for [resellers] with strong business relationships with mid-size companies," says Clayton.

Similarly, Affinitys McIntyre is focused on relationships. "Our target and preferred customer is someone who is building relationships beyond selling boxes," he says. "One of the reasons to partner with us is that we can acquire, deploy and network equipment much more cheaply and more efficiently than the channel partner can."

Affinity is currently in talks with two of the three top distributors, which include Avnet-Hallmark, Ingram Micro and Tech Data, and to ink a pilot program within the next month, says Bova.

Avnet last year signed a deal with Collective Technologies, a managed infrastructure service provider, to offer Avnets resellers managed services to resell.

Telenisus CEO Gordon Reichard says scarcity of capital is driving consolidation among MSPs. Telenisus, launched in November 1999, raised a $45 million third round in February for a total of $103.3 million and claims to have enough cash to get to profitability.

But Reichard says that this time VCs carefully scrutinized Telenisus and talked to many of its 600 customers. "We have two companies a week approaching us, for us to buy them," he says. "The industry has hit a wall."

Telenisus has an extensive partner program and offers hosting, security and VPN services through a portal backed by a platform based on components from CheckPoint, Cisco, EMC and IBM. "We give our customers SLAs in writing—which is still missing from most of the industry—and we differentiate on quality of service," Reichard says.

Also looking for partners is Sentire, a startup whose software works alongside MSPs like Intira and LogicTier to monitor backbone and server health as well as the customer experience.

"Were like what operations management became to the LAN," says CEO Jerry Bowerman.

Sentires basic platform is built on Microsoft technology, although its Resource Monitoring Agent, which gathers information about hardware devices, also can run on Solaris, BSD and Linux. Sentire handles intelligent routing and geographic load balancing and works with content-distribution networks.