Before we jump into the Top 10 list, it’s important to note that I’ve put aside our content departments like…

• The MSPmentor 100
• The MSPmentor 250
• The SaaS 20 Stock Index
• The MSPmentor Career Center
• The MSPmentor M&A Tracker

The Blog Headlines You Read Most (Jan.-June 2009)

Now, our Top 10 Blog Entries in terms of reader traffic…

10. Open source vs. closed source: The managed services debate
9.  Apple’s Genius Bar: The ultimate hardware as a service
8. MSPAlliance responds to MSP Partners’ managed services accreditation
7. Dell ProManage Managed Services: Challenge or opportunity for MSPs?
6. Managed Print Services Association launching in April
5. Professor of managed services?
4. How to structure your managed services offering
3. Meet the most successful SaaS companies Wall Street doesn’t know
2. How to fail as an MSP: Part II
1. How to fail as an MSP: Part I

Stay tuned. In the weeks ahead we’ll unveil several site enhancements that allow you to more easily track where readers’ eyeballs are heading.

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On the upside, big SaaS 20 Stock Index winners for the first half of 2009 included:

• Taleo Corp. (TLEO, up 133.33%): The talent management specialist generated 34% year-over-year revenue growth during its Q1 ended March 31.
• Amazon.com (AMZN, up 63.14%): All clouds, it seems, lead to Amazon Web Services, Amazon Simple Storage Service (S3) and Amazon Elastic Compute Cloud (EC2)
• SuccessFactors Inc. (SFSF, up 59.93%): Another SaaS-focused talent management specialist, SuccessFactors posted a 50% increase in Q1 revenue vs. Q1 2008.
• RightNow (RNOW, up 52.65%): The “other” big SaaS CRM provider, though far more targeted in its efforts than Salesforce.com.
• Constant Contact (CTCT, up 49.74%): Q1 revenue, announced in May, shot up 55% to $28.1 million.
• Kenexa Corp. (KNXA, up 44.99%):  Q1 revenues, announced May 11, dropped nearly $10 million to $38.8 million. And the company could be facing a class action lawsuit. Still, investors seem to be true believes in SaaS-oriented talent management software.
• NetSuite (N, up 39.93%): Q1 revenue jumped 22% to $41.6 million. And NetSuite is seeking more channel partners to promote its ERP and CRM SaaS platform.

Other big first-half winners included Salary.com (SLRY, up 38.36%), Google (GOOG, up 37.04%), Dell Inc. (DELL, up 34.08%) and Ingram Micro (IM, up 30.69%). Dell and Ingram, not exactly SaaS stars in their own right, are featured on the SaaS 20 Stock Index because of acquisitions (Silverback, Everdream) and Managed Services (Ingram Micro Seismic), respectively.

Reality Check

Despite all those winners, let’s keep the long-term SaaS market in perspective. During 2008, SaaS stocks fell roughly 50 percent. And our own SaaS 20 Stock Index — despite this year’s rally — remains 30 percent below its January 1, 2008 starting point.

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In my mind, Apps4Rent’s name says it all. The company is a Microsoft Gold Certified Partner that offers SharePoint hosting, Hyper-V hosting and hosted Exchange. It’s a SaaS business model, but Apps4Rent focused on a similar term (applications for rent) to communicate the same message.

A simple blog post with a simple message: Your name counts.

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The ConnectWise Twitter feed leads readers to a landing page describing the new pricing. Until now, Hosted ConnectWise cost $45 per-user, per-month. ConnectWise is lowing the price to $39-per-user/per-month for a two-user minimum (or a $78-per-month total two-user price). And yes, the discount applies to existing customers — a rare move in the world of technology services.

But there’s a bigger story here. It involves:

• Architectures: The SaaS vs. Hosted vs. On Premise Debate
• Competition: Ultimately, I think ConnectWise is (A) rewarding loyal customers and (B) moving aggressively against Autotask Go!

Architectures and Perceptions

In recent months, software vendors have strongly debated whether managed services software will live on premise or in a cloud somewhere. Start-ups like Paglo and Severa, and more established firms like Autotask, articulate the simplicity of their SaaS business models.

In contrast, ConnectWise says it has adopted a Burger King-type strategy: Have it your way… On premise or hosted. But ConnectWise’s strong on-premise heritage means some folks don’t realize the company has a growing hosted business.

ConnectWise’s installed base is roughly 10 percent hosted and 90 percent on-premise, according to a conversation I had with ConnectWise CEO Arnie Bellini at the Kaseya User Conference in May 2009.

Added COO Santo Cannone in an email to me earlier this week:

“BTW, we’ve been offering our hosted model to partners for 3 years. We have 230 partners and over 900 users operating in our hosted environment.”

Competition

Read between the lines and the new Hosted ConnectWise pricing seems to be:

• A loyalty reward to existing ConnectWise customers;
• An open letter to MSPs that are mulling a hosted platform decision; and
• A declaration of war against Autotask Go!

Autotask Go costs $99 per month (total cost) for up to three SaaS users (so per-user can be as low as $33/month). Once you get beyond three users, you’ll need Autotask Pro. Autotask says it has 25,000 customers on its SaaS platforms (Go and Pro).

I don’t think we’ll see a multi-round PSA SaaS price war. But if a pricing battle does start, there are some key factors to consider:

• ConnectWise is privately held/privately owned, with no venture capitalist influence and I believe no debt. As a result, Bellini can adjust pricing quickly without upsetting outside advisors. As Bellini mentioned to me in an email: “We want our Partners to have More for Less.”
• Autotask and many other MSP-oriented software providers are privately held but venture funded. And venture capitalists generally don’t enjoy price wars. So pricing decisions may need to be more carefully weighed.

Beyond Pricing

Of course, price isn’t everything. You’ve got to test a range of tools — and speak directly with software providers to understand their product roadmaps — before you can really make an informed buying decision.

Ultimately, PSA software providers don’t want your buying decision to be about price. More importantly, it’s about driving loyalty through continued software enhancements — and even business education.

Asserted Bellini:

We want our Partners to have More for Less. We want to offer the entire market the world’s #1 PSA solution for the lowest price we can provide. We want to share our success with the IT solution providers of the world and we want to use our domain expertise to build their success. ConnectWise has got to be a champion for the independent IT Solution provider….no one else is stepping up to the plate. We believe if we give to the community it will benefit us in the long run….so it is a pay forward mentality for the companies that want to build their success on our success.

Once ConnectWise’s Tweet about the price change became public knowledge, I offered Autotask CEO Bob Godgart some time on the topic. His thoughts arrived in an email to me. And he drew a clear line between SaaS and hosted software:

Before making any purchasing decisions, do an apples to apples comparison and ensure what you’re looking at is a true SaaS model. Is there a true web connection or is it a Fat Client connection to the Data Center? What integrations are supported (really important for the MSP platform providers)? What about accounting and other back-office applications? Is the technology accessible anywhere? It won’t be unless it’s available thru a standard web browser (which Autotask is)… Are the upgrades pushed or pulled (downloaded)? In a true hosted version, they should be automatic and seamless (again, Autotask offers this). You also want to ensure there is live support and training available (you guessed it… we offer this too)… Bottom line, you have to really look at what your being sold and what’s included, what’s extra and what will make the most sense for your business needs…. Imagine a tech going on site and then with a fat client and having to download it to every machine that they use? Autotask is accessible anywhere through a standard web browser.

Boil down Godgart’s statement, and he’s asserting that true SaaS involves a Web browser and centrally managed software.

So, I asked ConnectWise if Hosted ConnectWise required a fat or thin client. COO Santo Cannone told me the application is delivered in both a browser and a .Net client.

I’m not a software tester, folks, so please: Do your own testing and draw your own conclusions.

Beyond Microsoft

Still, I will split hairs with Autotask’s Godgart on a key point: He mentions support for a “standard web browser.” But in Autotask’s world, that means only supporting Internet Explorer.

I think that’s a mistake. Thirty-two percent of MSPmentor.net visitors run Firefox, 6 percent run Google Chrome and 6 percent run Safari, according to our June 2009 traffic. Autotask Chief Marketing Officer Bob Vogel has posted comments on the web indicating that Autotask eventually will support additional browsers.

Loyalty Matters

Back to the central topic at hand: PSA software companies want your business and they’re working hard to earn/retain your loyalty.

At a time when Microsoft and so many other software companies are trying to raise prices, Hosted ConnectWise is heading in the opposite direction with a price cut.

Consider this: When was the last time your Cable Company, Broadband Provider or Cell Phone Service Provider emailed you, thanked you for your loyalty and said they were ready to give you a new, recurring discount on a monthly service you were already using?

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We’re not looking to compete with Monster.com, Dice.com, Craigslist and other job boards. Instead, the MSPmentor Career Center is a free area to help you promote or find selected opportunities designed especially for the MSP, SaaS and IT channel industries.

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According to Kaseya:

• The survey involved over 2,200 IT Service Providers, Value Added Resellers (VARs) and IT consultants.
• Fewer than 20 percent of the respondents are automating IT tasks, and are instead relying on increased billing rates and decreased staff and salaries to maintain profitability, according to Kaseya CEO Gerald Blackie.
• Predictably, the report says break/fix models can hinder the success of MSPs and IT consultants.

Still, I value data. And the Kaseya survey certainly caught my attention. I need to give it a closer look. But in the meantime, what’s your view: Are most MSPs offering pro-active automated support or re-active break-fix options?

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First, some background: The MSP software market is filled with privately held software companies. Some intend to remain private and closely held forever. Others have been forced to rethink their financial and IPO strategies because of the recession.

Reasons for Optimism

Now, the good news: Successful IPOs at LogMeIn and SolarWinds could help peer MSP software providers to (A) move forward more quickly with potential IPOs and (B) fetch higher valuations.

Admittedly, financial markets remain unsteady. But the news from LogMeIn and Solarwinds is reassuring.

• LogMeIn’s shares rose roughly 25 percent when they debuted on July 1. You can use LogMeIn for basic remote PC access capabilities like checking your email or grabbing files. But MSPs can also use LogMeIn’s software to remotely troubleshoot customers’ systems.

• Solarwinds‘ shares are up 32 percent, according to The Motley Fool, since the company’s IPO in May 2009 (here’s a chart).

Expert Perspectives

MSP software industry CEOs — such as Nimsoft CEO Gary Read, N-able CEO Gavin Garbutt, and Paglo CEO Brian De Haaff — are sitting up and taking notice.

Nimsoft’s Read was watching closely as Solarwinds prepared its IPO.

Meanwhile, N-able’s Garbutt offered this perspective on both IPOs:

“This is awesome for MSP’s and the whole Network and System Management industry. The success of the Solarwinds and LogMeIn IPO’s reflect a broad understanding that SMB’s depend on their networks and systems to operate their businesses, maximize employee productivity and ensure customer satisfaction.”

In an email to me, Garbutt is quick to connect the dots between those recent IPOs and N-able’s own N-central management tools. N-able is privately held… But I’ll be sure to push him on the IPO question when we meet at Microsoft’s Worldwide Partner Conference (WPC09)

Adds Paglo’s De Haaff:

“Just in case you hit the snooze button — here comes LogMeIn. Their wild success reminds us of what’s possible when you reject the nightmare of enterprise software implementations and use the cloud to efficiently deliver massive customer value. Be transparent and make it easy for your customers to try and buy your services and they will love you for it.”

For now, Wall Street seems to be loving MSP- and network management-oriented IPOs. We’ll see if the financial love fest lasts.

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Here are Cali’s seven secrets to success…

Rule 1: Understand your core brand value.

Examples:

• GeekBrief.TV’s brand value is “happiness,” Cali says. She wants her three-minute technology product views to leave viewers feeling good.
• I’d be curious to hear what readers think MSPmentor’s core brand value is. We strive to be the ultimate guide to managed services. Do we fulfill that mission? Is our core brand something else?

Rule 2: Start compelling conversations

Cali says you need to look around your daily life to create compelling conversations. Our sister site, TheVARguy.com, attempts to write about everyday experiences with some attitude mixed in. Examples:

• The other shoe falls for former Computer Associates executive
• Memo to JetBlue: Change your WiFi strategy

Rule 3: Be an asset

Cali says your sites and communications need to “Add value. If you want to build an online community, it can’t be about you. It has to be about your community.”

Agreed. Generally speaking, I don’t blog about a topic unless I have a strong opinion or insider’s view on that topic. Straight news is dead.

Rule 4: Make friends, not fans

Cali advises: “Don’t speak at community. Speak with community. Ask questions and answer questions. Loyal audiences will tell other people about your sites.”

Rule 5: Show appreciation

Thank readers over and over again.

Rule 6: Take Breaks

Cali admitted she breaks rule 6 all the time. So do I.

Rule 7: Always be upgrading

Cali says “Never let yourself you get stale. Show your community you’re vying for their attention.”

Living Up to Rule 7

On June 11, we asked readers what they’d like to see next from MSPmentor. In July, you’ll see what’s next from MSPmentor. And I think you’ll be pleased… because the forthcoming site enhancements reflect your requests.

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First, the news:

Marriott International is announcing it will offer telepresence technology in its hotels worldwide, using AT&T’s fully-managed AT&T Telepresence Solution. Cisco TelePresence(TM) technology will enable Marriott to offer customers the widest array of meeting options, whether in-person, virtual or both.

There’s a simple message here for MSPs: You need to master video. Fast. As your customers begin to spot TelePresence services in major hotels, they will begin to ask you about lower-cost video services for their own businesses.

At first, TelePresence was cost-prohibitive for many MSPs and their customers. A typical TelePresence video conferencing room could cost $300,000 or more to deploy, plus ongoing monthly service management fees. Gradually, Cisco Systems, Hewlett-Packard, LifeSize Communications and other companies have introduced lower-cost TelePresence options.

Now, major service providers and hotels are jumping into the action, offering TelePresence services to hotel guests for a flat hourly fee.

According to a press release:

Initially, Marriott plans to locate telepresence meeting suites in 25 global gateway cities, including New York, San Francisco, Washington, Hong Kong, Shanghai, Frankfurt and London, in its Marriott Hotels & Resorts(R), JW Marriott Hotels & Resorts(R) and Renaissance Hotels & Resorts(R) brands. The first telepresence meeting suites are expected to go live at the end of October.

Of course, TelePresence and high-definition video have multiple applications. Many MSPs are starting to offer managed video as a service (MVaaS), which allows retailers, government offices and school campuses to closely monitor their properties.

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First the news:

• SAP has named SunGard a hosting partner in the US
• Oracle announced a SaaS partner strategy for ISVs (Channel Chief Judson Althoff describes Oracle’s SaaS strategy in this podcast)
• And NetSuite, the pure-play SaaS company, announced plans to push deeper into SAP’s home market of Germany

The ERP SaaS moves won’t end there. It’s safe to expect Microsoft to make major SaaS announcements during the Microsoft Worldwide Partner Conference 2009 (here’s all of our WPC09 coverage) in New Orleans (July 13-15).

SunGard and SAP

So, where can managed service providers play in the SaaS ERP market? Consider the situation at SunGard.

Earlier this week, SAP named SunGard a certified hosting provider after assessing the company’s infrastructure, procedures and technical staff. SunGard said it provides the following managed application services for SAP: infrastructure design, deployment and migration, management, administration, monitoring, reporting and ongoing support.

SunGard had been offering SAP services prior to certification. The company formalized its managed SAP services offering in January 2007, according to Janel Ryan, product manager at SunGard Availability Services. SunGard acquired a company a few years ago that extends its experience in managing SAP environments dating back to 1998.

Ryan said SunGard has seen, and continues to experience, a steady demand for managed SAP services. The partnership with SAP, she added, will “increase the demand for new implementations.”

SunGard cultivates partnerships with both traditional software vendors and  software-as-a-service providers. The company’s offerings include managed Microsoft SQL and Oracle databases, managed Oracle E-Business Suite services, and managed Citrix services.

HarrisData, meanwhile, repackages SunGard’s managed services as part of its SaaS offerings. The company uses SunGard’s hosting, network, managed security, and storage services to support three of its applications.

SAP Wakes Up to SaaS

SAP, for its part, has been expanding its roster of hosting allies. In the past year or so, SAP has entered hosting alliances with Computer Sciences Corp, Savvis, and Secure-24.

Hosting represents a growth segment for SAP. Pierre Audoin Consultants in a May report noted a decline in SAP’s license business in Q1, but noted that SAP outsourcing, hosting and application management “could benefit from the gloomy economic situation.”

But Pierre Audoin Consultants also stated that hosting and application management are subject to pricing pressure, noting that those areas have become commodity services for the most part. The consulting firm noted that differentiation “will only be possible on a price or innovative price-and-billing-model basis.”

Oracle, NetSuite Make Moves

Meanwhile, Oracle is finally formalizing some SaaS software licensing programs — which should allow SaaS-focused ISVs to “pay as they go” for Oracle software. This podcast with Oracle’s Althoff explains the strategy a bit more.

NetSuite also caught our attention this week. The company’s OneWorld suite has earned financial certification in Germany. That’s not “big news” for North American MSPs. But there’s a deeper story here.

NetSuite’s move into Germany — home of SAP — symbolizes SaaS ERP’s continued global expansion. MSPs can either ignore the trend, or try to figure out a way to cash in.

Contributing blogger John Moore covers Master MSPs, Web hosts and emerging opportunities. Additional reporting by Joe Panettieri. Follow MSPmentor via RSS; Facebook; Identi.ca; and Twitter. And sign up for our Enewsletter; Webcasts and Resource Center.