MSPs Can Make More Money Selling Microsoft Azure
By Joseph Landes, Nerdio
MSPs faced with moving to the cloud often confront several concerns. At this point, they have seen the writing on the wall, know it is time to move their customer’s infrastructure to the cloud, but are worried about taking the next step. Change is hard: MSPs are comfortable in the on-premises world and well-trained in the business of buying a server and managing, monitoring, and securing it.
There are a number of challenges MSPs face when moving their business to Microsoft Azure, and one is certainly that MSPs feel the cloud is risky. While understanding cloud economics is a concern, it does not need to be a barrier to entry. In fact, there are tactics for optimizing Azure infrastructure costs to increase margins and make more money offering and reselling Azure.
The question MSPs should be asking is not just how to get into the business of offering cloud services hosted with Azure, but more importantly how they can make money with those services.
Now is the time to transition into the Infrastructure as a Service (IaaS) world, where MSPs can use a platform like Microsoft Azure to build a cloud-based business and grow their recurring revenue. The cloud is not the future but rather the here and now and offers MSPs the chance to create steady and strong recurring revenue once they do take the perceived “risk.”
To do this, MSPs should find ways to optimize the cost of purchasing Microsoft Azure. The most expensive way to purchase Microsoft Azure is what Microsoft refers to as Pay-As-You-Go. But if you leverage programs Microsoft has established for optimizing cost, an MSP can save up to 80 percent of the list price of Microsoft Azure while driving a significant increase in margins for their practice.
Tactic 1: Become A Cloud Solution Provider (CSP) Reseller
This is really step one for all MSPs. Becoming a CSP reseller involves going to a large cloud distributor — for example, Ingram Micro Cloud, Pax8, D&H Distributing, or Sherweb — and purchasing Microsoft Azure and Office 365 from them. This will at a minimum allow an MSP to save at least 10 percent off of the list price of Azure while also becoming eligible for various other Microsoft’s incentives.
Tactic 2: Leverage Azure Reservations
Compute in Azure stands out as the costliest element of a typical MSP’s IT environment. Using Azure Reservations is a great way to reduce this large consumption component. Reserved Instances (RIs) are reservations of a specific type of compute capacity (i.e., VM family/series) in a specific geographic location (i.e., Azure region) for a predefined period (12 or 36 months). RIs allow MSPs to reserve a block of compute ahead of time, ultimately saving from 20 percent to 57 percent relative to the pay-as-you-go price.
Tactic 3: Participate In Azure Hybrid Usage
Azure Hybrid Usage allows MSPs to pay for Windows Server via another licensing program and not through Azure. Essentially, it enables MSPs to get credit for Windows Server licenses purchased in the past and then bring those licenses to the cloud so they don’t need to be purchased again. This tactic allows for great cost savings only available in the Azure cloud.
Tactic 4: Auto-Scaling
Azure’s value proposition as a public cloud is its consumption billing model, much like the common structure for utilities, in which users pay only for what is consumed. An automation platform offers built-in auto-scaling capabilities. Auto-scaling informs the system when the customer is not using a desktop or the cloud server so that the servers and the desktop can be automatically ramped down and then turned back on again when needed. As a result, the MSP is not charged for resources that aren’t running during off times.
The opportunity for MSPs to move to the cloud is now. With several ways to reduce cost when moving to Microsoft Azure, MSPs can successfully transition into the IaaS world while boosting their monthly recurring revenue.
About The Author
Joseph Landes is the Chief Revenue Officer at Nerdio, where he focuses on helping MSPs build successful cloud practices in Microsoft Azure. Prior to joining Nerdio in 2018, Landes worked for Microsoft for 23 years where he held numerous senior leadership positions at the company’s corporate headquarters in Redmond as well as in Eastern Europe, India, and Brazil.