Managed services are being touted as opportunities for the channel. What’s your opinion?
DD: Managed services are a solid opportunity in these kinds of times, but it’s not a panacea. There are trade-offs and risks. Having managed such a business, I know you need to be careful on the ‘mess for less’ kind of managed service, where everything is the same and they charge you less for it. You just need to be sensitive to how that’s being done and understand it better. Are there real models where someone’s mess can be provided for less? Absolutely, no question. Are there scale opportunities? Absolutely. But for new entrants, you have to have that savviness and understand how best to sell these.
Do you think the rise in managed services from the channel and their vendor partners, such as Cisco, will push down the value of services?
DD: I hope not. We saw that in the industry back in the mid- to late 1990s as the hardware and software components were split. If you weren’t watching properly, the go-to-market teams would giveaway all the software as they wanted to sell hardware, and it was the software that was supposed to present that annuity stream and change the dynamic in these major companies. I think the vendors have learned lessons from how that played out and hopefully they won’t allow others to create a marketplace that mitigates the value their services can provide.