The new program is basically a change in the pricing structure that moves software costs into a subscription-based OpEx model, which partners with an MSP practice can use to increase their profitability.
Indianapolis-based hyperconverged infrastructure vendor Scale Computing has addressed the needs of its managed service provider partners with a new MSP program within the context of their umbrella Scale Partner Community program introduced last year.
The new program isn’t a standalone structure, but is essentially a change in pricing optimized for partners selling on a managed services model.
“We have been working on this for quite some time,” said Dave Hallmen, Scale’s Chief Revenue Officer. “Over the last two and a half years we have increased our focus around being a 100 per cent channel-centric vendor, and with that in mind, we introduced the Scale Partner Community last year. It lacked an MSP alternative, however. We have been having discussions with partners with managed services practices, and the issues they had capitalizing their business, particularly cash flow ones around their Monthly Recurring Revenue model.”
Scale focuses on the SMB, midmarket, and distributed locations within enterprises, and many of their traditional solution provider partners have added MSP practices to their business. This is the target audience for the new program
“This is not about creating new products,” said Scott Mann Director, North American Channel, at Scale. “It’s a new pricing model for MSP customers around our HC3 Edge solution for distributed enterprises.”
“Because of the efficiency of our stack, local and regional partners have really embraced us,” Hallmen said. “Our partners are not the telcos and other national providers, although we have been embraced by some international ones for branch environments. Our lower resource requirement on the stack and our remote management capabilities has us in branches of large remote enterprises.”
“We also fit into a part of the market where our competitors just don’t fit, and that’s with smaller size customers,” Mann added. “We can run everything on the same resource where our competitors would just be able to put their OS.”
The program looks to boost partner profitability with a new flexible pricing model that reduces CapEx through a price per-node, per-month, OpEx subscription.
“We provide the MSP with the same appliance, but with this, the hardware and software costs have been broken out to make the software a monthly recurring cost,” Mann said. “It reduces their CapEx expenditure.”
“It provides them with a pay-as-you grow type of model,” Hallmen indicated. “They can buy more capacity as they need it, and don’t have to do it up front.”
Hallmen added that this change is consistent with Scale’s general value proposition of being able to lower costs to their partners, allowing them to be more profitable overall.
“We have had a competitive advantage in lowering the management costs in running the infrastructure,” he stated. “Most of our accounts have switched from VMware because we save them a significant amount of money. Now with this, we are reducing costs further. We are aligning our pricing to their business model and cash flow, while lowering their costs of service delivery.”