Cloud: Your Business Evolution Strategy

In Cloud by Shelly KramerLeave a Comment

If you’re an MSP for whom “cloud” has become a dirty word—raise your hand. Following your metamorphosis from channel companies into MSPs you might have wanted to resist the rush toward cloud services, and the reselling efforts that cloud adoption would entail. But in reality, that could be a dangerous path—especially if your customers perceive you to just be an outsourced IT service provider and not an evolved agent of change and improvement.

There’s that word again. Evolved. In today’s rapidly changing tech world, every business needs to be constantly changing, adapting, and evolving, and managed service providers are no different. In fact, MSPs need to go a step further and embrace the fact their real value proposition isn’t just being a source of IT services; it’s about being on the leading edge of technology, understanding how that’s changing business and business operations today, and helping their customers change, adapt, and evolve as well. And embracing the cloud and the myriad benefits cloud technology affords businesses will allow them to do just that.

MSPs: Cloud Integration Really Isn’t that Hard

With many MSPs already recognizing the advantages of adding cloud services to complement their current service offerings, there are inherent dangers for those who resist this change. While some may have concerns about stepping into new technologies that might be considered as low margin business, even as a defensive measure, adopting cloud makes sense.

In fact according to CEO of MSP Alliance, Charles Weaver it may not be as difficult for many MSPs as they imagine. Consider what he says about the cloud challenge for MSPs, most of whom as he points out are well used to managing IT assets that are outside of their own facilities.

“One of the biggest fallacies out there in the IT channel is this notion that MSPs need to change their business strategy to adapt to cloud computing. This idea, however, that MSPs need to change their business model in order to adapt to cloud computing assumes that cloud is somehow different from managed services. It is not! Cloud computing is a delivery vehicle for managed services. It’s a conduit for delivering the services, not a unique business model that has somehow eluded MSPs for all these years.”

So what types of MSPs are getting involved with cloud technologies? Over at CloudTech Rhonda Sherwood suggests that three common profiles are emerging.

The Conventional. The Conventional type are the MSPs that trust another provider for their cloud needs, usually a big player like Amazon or Google. This method of offering a well-known name is something of a lower risk strategy, but makes it harder to differentiate from all the other providers offering exactly the same packages to customers.

The Risk Taker. The Risk Takers like to have more control and complete ownership of the cloud infrastructure, updates, and maintenance. More control comes with higher costs though, so being a risk taker won’t be for everyone. Initial investments will be higher, ROI slower, and competition more fierce.

The Trailblazer. The Trailblazing MSP looks to find the best of both worlds. By using a white-label provider, they look to be able to offer high-level infrastructure without the high level investment that deploying their own cloud service would involve. This method offers scalability, together with the flexibility to cater to the customer’s specific requirements.

Choosing the Right Cloud Services

But whichever “personality type” fits, knowing what type of cloud services to get involved with is a common question for MSPs. Weaver has some suggestions that make a lot of sense:

  • Reselling third party services may not offer the highest margins, but non-core services can help cement relationships with clients who are looking for inexpensive alternatives.
  • Infrastructure as a Service (IaaS), while again not of high value in itself, can make good sense as part of an overall MSP strategy, and can be a gateway to higher value solutions.
  • Weaver describes back up as the “bread and butter” offering for most MSPs. Effective cloud back-up solutions can be offered either from the MSP’s own storage capacity or by reselling from another cloud provider.
  • MSPs can provide third party cloud solutions in areas, such as user management, migration, back up, and compliance monitoring to add value to their core business.
  • The SMB and mid-market space can provide lucrative opportunities for an MSP to build, deploy, and manage private cloud solutions. This can be via third parties to avoid investment in high cost infrastructure or, for the more committed, as a self-built platform.

For an MSP, cloud computing shouldn’t be considered as a potential threat to their core business model. In reality, the advance of cloud technology has done much to promote the value of those who already offer managed services. Smart MSPs will build on that, and accept the challenge of integrating cloud into their own business strategy. There are many options available to allow MSPs to slowly incorporate cloud services into their offerings, without jumping in at the deep end as full on cloud providers. Those who get it right are more likely to be able to build relationships, attract and retain clients, and continue to evolve organically as cloud technology continues to develop.

If you’re involved in the provision of managed services, I’d love to hear your thoughts. Do you think cloud technology is a threat to MSPs or a vital component in the evolution of the industry? What has your experience been when it comes to the integration of cloud into managed services? Have you added it to your offerings?

This post was brought to you by IBM for MSPs and opinions are my own. To read more on this topic, visit IBM’s PivotPoint. Dedicated to providing valuable insight from industry thought leaders, PivotPoint offers expertise to help you develop, differentiate and scale your business.

Additional Resources on this Topic:

MSPs and Hybrid Storage Solutions: Make Hybrid Storage a Businesses Best Friend
As Adoption Grows, Companies Want MSPs to Manage Public Cloud: Report
The Top 10 Opportunities for MSP’s to Grow Cloud Revenue in 2015

photo credit: Skypark via photopin (license)

Shelly Kramer is a Principal Analyst and Founding Partner at Futurum Research. A serial entrepreneur with a technology centric focus, she has worked alongside some of the world’s largest brands to embrace disruption and spur innovation, understand and address the realities of the connected customer, and help navigate the process of digital transformation. She brings 20 years' experience as a brand strategist to her work at Futurum, and has deep experience helping global companies with marketing challenges, GTM strategies, messaging development, and driving strategy and digital transformation for B2B brands across multiple verticals. Shelly's coverage areas include Collaboration/CX/SaaS, platforms, ESG, and Cybersecurity, as well as topics and trends related to the Future of Work, the transformation of the workplace and how people and technology are driving that transformation. A transplanted New Yorker, she has learned to love life in the Midwest, and has firsthand experience that some of the most innovative minds and most successful companies in the world also happen to live in “flyover country.”

Leave a Comment