By Dan Timko, J2 Global and OffsiteDataSync
The market for infrastructure as a service (IaaS) is growing robustly as more organizations turn to cloud and managed services to meet their IT objectives. Rather than investing heavily in in-house technology and talent, businesses are instead partnering with experts who can enhance their performance, security, scalability and support. The managed service providers (MSPs) meeting this demand are in turn relying on cloud computing services to help them deliver what their clients need.
When considering potential providers, many MSPs automatically think of the giants who dominate the cloud computing field, but Amazon, Microsoft and Google don’t represent the entirety of IaaS — not by a long shot. In fact, smaller players account for just over a third of the market, according to the latest research from IDC.
There are a number of compelling reasons MSPs should look beyond the big three. To put it bluntly, you’re probably not that important to a major hyperscale cloud provider. The biggest have huge client lists, and an individual company can easily get lost in the crowd. Services like AWS, Google and Azure deal with the largest organizations in the world, and the revenue you generate for your cloud provider is probably minuscule by comparison. And like any business, your cloud provider knows which clients account for the bulk of their profits, and they’re going to focus their attention on them.
Smaller cloud providers offer significant advantages. Foremost, you’re more likely to be an important and valued customer, rather than just one more name on a long list. As a result, you can expect more attention and more personalized service, such as a dedicated support resource assigned to your account. That’s critical. Research continues to underscore the importance of people, the relationships they forge with customers and the support they provide to success with cloud.
Say you need help figuring out solutions for your clients and working out deals. A smaller cloud provider has dedicated solutions engineers who will answer your call. They offer a closer feedback loop for product offerings and are likely to be more willing to be flexible in creating services. They recognize an MSP’s need to add value for their customers and to build and maintain trust. You’re not likely to get that level of responsiveness with one of the biggest providers, which is likely to operate on a self-service model, where getting in touch with a live human being is difficult, if not impossible.
Because you’ll be largely on your own with the hyperscale provider, that means you’ll need a highly skilled engineering staff. But it’s nearly impossible for MSPs to retain staffers with that level of skill for very long. Say you have a few engineers who are real go-getters. They’ll learn all about Amazon or Azure and take the certification tests on their own time. But once they get experience actually working with customers, they’ll be snapped up the next day by some giant enterprise willing to double their salary.
That’s something most MSPs simply can’t compete with. They can’t afford to pay the salaries to people who are experts on Amazon or Azure without building significant practices around those systems. Why even bother when you have players in more traditional technologies with a wider skillset?
MSPs are focused overwhelmingly on SMBs. That’s a market smaller cloud providers can relate to, so they can provide a great deal of assistance. They know how to work with SMBs, and they’re looking to form a relationship. Most of what the hyperscalers are putting out is not targeted toward this market segment. So even when a hyperscaler puts out something they present as “hybrid,” it’s actually aimed at larger entities. Their businesses depend on massive scale, not individualized service, and that won’t be changing any time soon.
The independent cloud provider’s role is that of trusted advisor. They’re not competing with the hyperscalers. They’re in the conference room with the owner of the MSP, talking about their challenges and how to overcome them. MSPs are in a great position to survive in a cloudy world, because they are in the best position to help customers navigate through the changing landscape and determine which cloud is the best fit for them. There’s so much value an MSP can add, and a smaller cloud service can help maximize that potential.
About The Author
Dan Timko is Chief Strategy Officer at J2 Global and OffsiteDataSync.