Close
  • Latest News
  • Artificial Intelligence
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Artificial Intelligence
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home IT Management
    • IT Management
    • Networking

    Dells SilverBack Purchase a Cause for Channel Concern

    By
    Pedro Pereira
    -
    July 18, 2007
    Share
    Facebook
    Twitter
    Linkedin

      It was only a matter of time. Sooner or later one of the managed services platform vendors that have gotten so much attention in the last couple of years was going to be acquired.

      Now its happening. SilverBack Technologies, based in Billerica, Mass., is the winner of this particular race. The surprise in this development is the buyer—none other than Channel Enemy No. 1—Dell.

      Dell disclosed July 18 that it has entered into an agreement to acquire the privately held SilverBack, whose remote monitoring and management platform Dell, based in Round Rock, Texas—plans to integrate into its operations.

      The deal is likely to make some, if not all, of SilverBacks partners very nervous, considering Dells uneasy history with the channel. In addition, SilverBacks competitors will have to grapple with the prospect of commoditization and wonder if they, too, shouldnt sell or merge.

      For months, rumors have circulated through the industry that SilverBack was negotiating a sale. But, as is often the case with these types of deals, the vendor wasnt about to disclose anything publicly. Some managed services executives, however, had acknowledged that, not only had they heard the rumors, but they were also being approached by potential buyers.

      /zimages/6/28571.gifClick here to read more about the Dell acquisition of Silverback.

      For Dell, the benefits of the acquisition are obvious. The company is no longer the Wall Street darling it once was, and it has had to start working hard to regain the loyalty of customers it has disappointed with poor service. To regain its former luster, Dell is making an aggressive push into services, which explains the SilverBack purchase.

      Also, for the first time, Dell has started to sell its products at retail chains, and its executives have intimated that the vendor is putting a channel program in place. Of course, it wasnt long ago that Dell made a practice of antagonizing the channel by urging customers to “cut out the middleman” and “buy direct.”

      How SilverBacks channel partners will react to the sale remains to be seen, but I would hazard to guess that a good number will be unhappy. Some may look for a new managed services vendor.

      SilverBacks partners include companies that have transformed themselves into MSPs managed services providers (managed services providers), or that are in the process of doing so. They have taken this route after concluding they couldnt survive on a product-pushing model. Margins were too thin and the vendors they worked with, such as Hewlett-Packard, were at times making matters worse for them by trying to replicate Dells direct model.

      Dell, with its rock-bottom pricing and public disdain for the channel, was a major reason VARs and integrators had to fight for their survival. Dell had a huge hand in the commoditization of computer products.

      /zimages/6/28571.gifRead more here about the implications of Dells move into the Channel.

      Of course, the commoditization would have happened with or without Dell, and the channel companies that have moved to embrace the managed services model should, in the end, be better for it.

      Still, SilverBacks partners are likely to worry about the commoditization of a model they embraced to escape commoditization elsewhere. The commoditization of remote monitoring and management already has been predicted, and MSPs have been warned to immunize themselves by continuing to add value. But will Dells grand entrance into the space accelerate the process?

      Its entirely possible. And as the commoditization potentially accelerates, SilverBacks competitors inevitably will reevaluate their market standings. One or two might even be compelled to seek a buyer or merger partner to stay competitive.

      Just as this first acquisition in the managed services space was inevitable, further consolidation is a certainty. Now, the floodgates are open.

      Pedro Pereira is editor of eWEEK Strategic Partner and a contributing editor for The Channel Insider. He can be reached at ppereira@ziffdavis.com.

      /zimages/6/28571.gifCheck out eWEEK.coms for the latest news, views and analysis on servers, switches and networking protocols for the enterprise and small businesses.

      Pedro Pereira
      Get the Free Newsletter!
      Subscribe to Daily Tech Insider for top news, trends & analysis
      This email address is invalid.
      Get the Free Newsletter!
      Subscribe to Daily Tech Insider for top news, trends & analysis
      This email address is invalid.

      MOST POPULAR ARTICLES

      Latest News

      Zeus Kerravala on Networking: Multicloud, 5G, and...

      James Maguire - December 16, 2022 0
      I spoke with Zeus Kerravala, industry analyst at ZK Research, about the rapid changes in enterprise networking, as tech advances and digital transformation prompt...
      Read more
      Applications

      Datadog President Amit Agarwal on Trends in...

      James Maguire - November 11, 2022 0
      I spoke with Amit Agarwal, President of Datadog, about infrastructure observability, from current trends to key challenges to the future of this rapidly growing...
      Read more
      IT Management

      Intuit’s Nhung Ho on AI for the...

      James Maguire - May 13, 2022 0
      I spoke with Nhung Ho, Vice President of AI at Intuit, about adoption of AI in the small and medium-sized business market, and how...
      Read more
      Applications

      Kyndryl’s Nicolas Sekkaki on Handling AI and...

      James Maguire - November 9, 2022 0
      I spoke with Nicolas Sekkaki, Group Practice Leader for Applications, Data and AI at Kyndryl, about how companies can boost both their AI and...
      Read more
      Cloud

      IGEL CEO Jed Ayres on Edge and...

      James Maguire - June 14, 2022 0
      I spoke with Jed Ayres, CEO of IGEL, about the endpoint sector, and an open source OS for the cloud; we also spoke about...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2022 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×