Possible impact of Dell's acquisition of Silverback

Having slept on this for a night, it seems as this acquisition can be nothing but bad news for Silverback’s MSP partners. Let’s imagine the possible scenarios for a minute and see where this could be going.

First, we need to understand that Silverback’s current revenues do not move the needle for Dell. If Dell are going to get serious about managed services, then they will need to turn this into a business that generates hundreds or thousands of times the revenues of today. How can they do that?

Are they interested in the MSP partner that is currently giving Silverback say $5,000 a month? Hmm, if they are going to remain interested in that type of partner, then they are going to have to scale to thousands or tens of thousands of them. Do I expect that to happen from a company that has traditionally been the “anti-channel”? Absolutely not. Even with the best intentions, it will take Dell forever to be able to understand and build an internal organization capable of supporting that and repair their reputation with the channel.

So, what’s the alternative? The alternative is that Dell uses Silverback through its direct to customer approach and in fact starts to “pre-load” Silverback on to all of the servers etc that Dell sells. “Have a few months of free monitoring and then pay us $50 a month to continue…”. Seems that this is a much more likely scenario, Dell knows how to scale a massive direct organization

Dell deals in commodities and likely they will try and commoditize the delivery of remote Managed Services. This is horrible news for many MSPs, particularly those using lower end platforms such as Silverback, N-Able, Level Platforms or Kaseya.

MSPs need to avoid commoditization and in order to do so need to move up the stack and offer more value added services to their customers. Beyond basic up/down monitoring but more application monitoring and Service Level Monitoring. The good ones have already figured this out.

The rest…..well, good luck in competing for commodity business against Dell.

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