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When you think of managed services in the channel, IBM isn’t exactly the first vendor that comes to mind. Yet, Big Blue is making a big play in the managed services arena by not only entering the game but changing the rules and upping the tempo.

IBM believes the next evolutionary step in managed services isn’t necessarily a move to cloud computing, but a blending of advanced technologies and applications as service delivery models. Rather than just having end users offload burdensome tasks to an MSP, IBM sees managed services becoming the agents that enable midmarket end users to compete on scale with their larger enterprise counterparts.

In practical terms, this means building and delivering business analytics, rapidly deployed infrastructure, development services and applications. As Andy Monshaw, general manager of IBM’s midmarket division, tells Channelnomics, managed services is shifting from a reactive break/fix model to an application-centric experience.

“They are looking for an application experience,” Monshaw says. “They are not self-integrators. Once you understand that, you start to ask how do you enhance the application experience, and that’s through managed services.”

IBM has been experimenting with managed services and discovered what many vendors before have: Solution providers with managed services practices are more productive, engaged with customers and profitable. Where it sees a difference is evolved managed services providers that provide specialization services around specific technologies and verticals. These providers – which IBM describes as “next-generation business partners” – have moved beyond hardware and software sales, and transactional break/fix services to deliver business-value-added offerings to their customers.

“The definition of an MSP doesn’t matter. There are huge MSPs that do nothing but host other company’s infrastructure. They do last generation hosting,” Monshaw says. “But there are a number of MSPs with specific application affiliations, such as security and health care. These are the ones that are most attracted to this model.”

The application-centric subset IBM is looking to tap into is relatively new in the managed services segment. Rather than delivering server and endpoint monitoring and break/fix services – or even active security and backup services – these MSPs are engaged in the designing, integration, delivery and ongoing administration of higher-level on-premise and hosted applications, such as customer relationship management (CRM) and business intelligence such as Netezza.

In the next-generation services model, IBM foresees MSPs spreading the cost of delivery and support of advanced sophisticated applications to multiple midmarket companies that otherwise couldn’t afford the acquisition and ongoing administration of conventional perpetual software licenses. This a concept being explored by many software and hardware companies with high-priced security, storage and business intelligence applications. In the quest to scale sales, they see managed services as a means of distributing costs and making their applications more affordable.

Monshaw says the company has identified 500 partners with the next-generation qualities it wants to recruit to its managed services initiative. It plans to provide these partners with an array of support options such as pre-sales technical support, training, marketing services, hosting infrastructure and integration expertise.

Complementing the IBM managed services initiative is its recently unveiled SmartCloud program, which gives partners the applications, resources and support to integrate and manage private and public cloud implementations. Monshaw doesn’t see conflict between the two programs, but rather an opportunity to blend experiences since many end users will want blended managed and cloud systems.

The role IBM plays in this next-generation of managed services is one of facilitation and support, not dominance. Monshaw says IBM is already working with a number of application vendors such as SugarCRM and SAP to develop and implement services for managed services partners.

“IBM is not in the business of delivering an application end-to-end to a client,” Monshaw says. “We’re in the business of partnering with MSPs.”

IBM is on to something here. Maintaining servers and infrastructure is a utility service. Even backup and many security services fall into an operational overhead category. By focusing on the business outcomes and user experience, IBM is correctly aimed at turning managed services from a task-reduction offering to a business and growth enabling function.

To date, few in the managed service segment have ventured far outside conventional monitoring and management roles. Cloud computing companies found that MSPs have the annuity model, but don’t easily grasp high-level applications, which stymie adoption. If IBM is successful at identifying and enabling these application-centric MSPs, it could truly be the vanguard for the next generation of channel services.

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Lawrence M. Walsh is CEO and president of The 2112 Group, a technology business advisory service that specializes in optimizing indirect channels and partner relationships. He’s also the executive director of the Channel Vanguard Council. He is the former publisher of Channel Insider and editor of VARBusiness Magazine. You can reach him at lmwalsh@the2112group.com.

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Larry Walsh: @lmwalsh2112 | Channelnomics: @channelnomics