Solution Provider Embraces Blade Servers to Support Business Growth
by Joe Panettieri
To the survivors go the spoils. More than three years after the dot-com implosion, one of Hewlett-Packard’s customers continues to thrive as a managed service provider (MSP).
Indeed, hundreds of midsize customers across 16 countries and four continents rely on CenterBeam Inc. for IT outsourcing and managed services. Unlike many MSPs, CenterBeam survived the Internet implosion because the company focused on specific customer pain points rather than hyping hosted applications.
For instance, CenterBeam’s desktop management service automatically updates customers’ PCs with the latest anti-virus definitions. The service also tests and deploys critical operating system and software patches without disrupting customers’ day-to-day business operations. And if disaster strikes, customers need not worry: All customer PCs are backed up daily—making individual file or complete system restores possible.
“Many businesses simply don’t have the time to run around tracking and installing the latest software patches,” noted Ed Golod, president of Revenue Accelerators, a sales consulting firm that serves integrators and technology firms in New York. “CenterBeam addresses those issues and lets you focus on your core business.”
The HP Connection
Based in San Jose, Calif., CenterBeam relies on HP hardware and software to keep its data centers humming along. To wit, CenterBeam’s IT infrastructure includes more than 80 ProLiant servers running Microsoft Corp.’s Exchange Server and Active Directory. The company also uses HP OpenView and Insight Manager to maintain, troubleshoot and fine-tune the systems remotely.
Over the next few months, CenterBeam will continue to build out its data centers with HP’s latest blade servers. “We’re deploying those as fast as we can because of their small footprint and scalability,” said Subhash Tantry, chief technology officer at CenterBeam. “We’re on backorder for more systems right now.”
CenterBeam isn’t alone. HP, despite fierce competition from Dell Inc. and IBM Corp., continues to lead the blade server marketplace for several reasons. HP announced in April that it was the first company to sell more than 100,000 blade servers. According to market research firm Gartner Inc., HP is the number one provider of blade servers worldwide. HP’s momentum is particularly impressive in Europe, the Middle East and Africa (EMEA), where the company increased first-quarter market share from 42 percent to 64 percent year over year and grew revenue for blades 536 percent.
CenterBeam and other HP solutions providers are strong proponents of blade servers. WhiteCross Systems, for instance, a leading business and customer intelligence solutions provider, consolidated more than 1,000 proprietary UNIX servers onto roughly 300 HP ProLiant BL20p blades running Red Hat Linux.
Reliability Breeds Loyalty
Despite recent changes in HP’s executive offices, CenterBeam remains loyal to the IT giant because of HP’s proven technology. “It comes down to reliability,” said Tantry. “And our experience shows that HP’s systems are reliable.”
Such reliability bodes well for CenterBeam’s customer satisfaction ratings. For 2004, 91 percent of CenterBeam clients were very satisfied, with 6 percent satisfied, leaving only 3 percent of CenterBeam customers dissatisfied with the company’s services, according Quality Resource Associates (QRA), a quality management research firm in San Jose.
Eager CenterBeam clients include ChartOne, a leading provider of on-demand medical record solutions. The company manages access to more than 1 million charts per year for more than 1,300 health care customers nationwide and approximately 20 percent of hospitals in the U.S. “It’s tough to impress us, but CenterBeam has shown us superior expertise and a ‘can do’ attitude we very rarely see,” said Henry Svendblad, ChartOne’s vice president of information technology and systems.
ChartOne, in late 2004, relocated its entire corporate operation from California to Texas and Massachusetts; CenterBeam played a key role in managing the transition. “I don’t think we would have managed to do this successfully without them,” recalled Svendblad.
Always at Your Service
In addition to managing corporate desktops, CenterBeam also focuses on managed server and infrastructure services. On the server management front, the company specializes in fault management, performance management, anti-virus protection, critical OS and software updates, asset tracking, Active Directory management and software distribution capabilities. A related network management service oversees the fault management, configuration management and performance management of corporate network devices such as switches and routers.
As a privately held firm, CenterBeam doesn’t discuss revenue or profits. But the company has a healthy list of deep-pocketed investors, including Microsoft, Intel Corp., Merrill Lynch and venture capital firm Apax Partners.
Still, the MSP market is littered with failed ventures. In the early 1990s, AT&T attempted to promote an outsourcing service to manage Lotus Notes environments. And from 1998 to 2000, companies such as Exodus Communications grew exponentially as the dot-com companies opted to outsource their servers at a frantic pace. Yet Exodus ultimately grew too fast and didn’t focus on cost controls or near-term profitability. When the MSP market went from fire hot to ice cold in 2002, Cable & Wireless snapped up Exodus for pennies on the dollar. “Everyone wanted to be an application service provider or managed service provider in 1999,” recalled Golod. “But when the implosion came, few ASPs and MSPs survived.”
So how did CenterBeam weather the storm? For starters, the company successfully positioned itself as an outsourcing expert rather than a provider of commodity hosted applications. Second, CenterBeam listened to its business instincts rather than market noise. For instance, the company continues to use HP servers—despite the fact that Dell was an early investor in CenterBeam. Third, CenterBeam has continued to focus on employee satisfaction as aggressively as customer satisfaction. Roughly 92 percent of CenterBeam employees are satisfied with the company, up from 85 percent in 2003, according to Catalyst Consulting Group of Boston.
Looking ahead, CenterBeam remains positioned in the sweet spot of the managed services market. CenterBeam’s outsourcing services will likely attract more and more interest from customers that are struggling to patch and safeguard their desktops, servers and mobile devices. That bodes well for CenterBeam and sets the stage for more HP blade servers to march into CenterBeam’s data centers.
