By Javed Sikander, NetEnrich
Traditional managed service providers are witnessing a stark transformation in their bread-and-butter business of hosting and managing enterprise data centers. Every year, the percentage of IT infrastructure and apps in the public cloud grows. It’s only a matter of time before cloud-based infrastructure will surpass on-premises infrastructure in terms of both spending and footprint. MSPs which aren’t moving aggressively toward the cloud now will be in a tough position for survival in a couple of years.
Based on what we’ve witnessed by working with many of the top MSPs around the country, many of these companies are starting to move to the cloud. They are developing their own sandboxes for learning and becoming partners of the major public cloud providers. Yet the window is closing to move beyond this experimental position to developing a fully formed, holistic cloud strategy.
Competition in the cloud is coming from new sources all the time. The largest IT distributors and resellers are now offering cloud design, migration and management services. Mid-tier MSPs without deep pockets are especially at risk of viability if they can’t soon position themselves as full-service cloud partners.
Now here’s the good news: Established MSPs have the advantage of long-term client relationships and marketplace credibility to extend their extensive IT experience to the cloud. Since most large companies are maintaining a hybrid environment for the foreseeable future, the ability to blend traditional infrastructure and services with modern, cloud-based environments is extremely valuable. MSPs are perhaps best positioned to help customers create a unified IT environment as they move projects to the cloud.
The MSP Cloud Business Roadmap
There are many pathways to becoming a cloud partner, but the following tenets apply to any situation.
- Add value. Public cloud providers make it pretty simple for someone with no cloud infrastructure knowledge, nor even IT knowledge, to buy storage and launch a server. MSPs should drive conversations with customers, explaining the benefits, challenges and vast decisions they need to make when moving assets into the public cloud. This includes security, performance, monitoring and workload management. The greenfield application opportunity is an entirely new focus, requiring DevOps and Agile expertise and tools. The landscape is changing all the time, and even large clients need partners who can help guide them on a day-to-day basis.
- Drive the business conversation. MSPs which can approach the cloud story with a business-focused methodology, not the traditional mindset of keeping servers up and running, have an edge. MSPs should cultivate the art of mapping business goals to cloud strategy, considering how the cloud can support customer experience, product innovation and marketplace differentiation.
- Package the services. Develop a portfolio of ready-to-go cloud services that your firm can deliver to customers. These services should be transparent with well-defined pricing and outcomes. Migration, application re-factoring, monitoring and security and architecture modernization are a few of the core areas where customers need help. In areas where your company lacks expertise, work with partners which can deliver these on your behalf as white-labeled services to your customers.
- Look ahead. MSPs should work hard to debunk the perception that they are behind the times. Thinking back to the industry transition from hosted Exchange Server to Office 365, MSPs were not ahead of the game. A fair number of MSPs lost business and revenue as a result. By staying ahead of cloud trends and embracing a calculated risk mindset, customers will look to their MSP partners as trusted and knowledgeable advisors.
Cloud transformation is the MSP industry’s business to lose. They’ve got the customers, they’ve got the market, and they have earned CIO trust over many years. Fortunately, many MSPs are being proactive and taking steps to transition their business. It won’t be a surprise, however, if at least 10 percent of the top 500 MSPs shut down or get acquired in the next couple of years because they didn’t move fast enough.
MSP executives can start by having serious conversations with their customers today about their cloud journey. Don’t wait for customers to tell you what they need; be the partner to push them into the future now.
About The Author
Javed Sikander is CTO of NetEnrich.