MSPs Must Embrace The Cloud To Grow Their Businesses In 2022
By Christina Walker, Blancco
Lurching into the third year of a global pandemic, businesses continue to adapt – and in many cases – thrive against all odds. And even though MSPs experienced many of the same challenges as their customers, those same MSPs have continued to serve as invaluable partners. They have helped scores of businesses navigate the many complexities brought on by COVID-19, including balancing the need to keep operations running efficiently with requirements to ensure the health and safety of employees and customers.
One area in which MSPs excelled in 2020 and 2021 was in helping enterprise customers transition their workforces out of corporate offices. In fact, the mass move to work-from-home scenarios was a key factor in the acceleration of cloud migration projects. MSPs with the right expertise were able to step up to support their customers’ digital transformation goals and, as a result, reaped both reputational and financial rewards.
Now that businesses are slowly returning to a pre-pandemic cadence, those organizations that put digital transformation plans on hold are beginning to prioritize these projects. One reason is that even the most reluctant enterprise leaders more clearly recognize the important role cloud applications and infrastructure play in a business’s success. Those same leaders also have seen a massive expansion of cloud platforms. All major cloud providers, including Microsoft, Google, and AWS, experienced substantial growth in Q4 of 2021. Amazon’s AWS business, for example, generated nearly $18 billion in revenue in the quarter, a 39.5% year-over-year increase.
This renewed push for digital transformation is great news for MSPs. The service providers able to provide the infrastructure, proprietary software, and data asset life cycle management services that their clients in finance, healthcare, and other highly regulated industries need for a 360-degree comprehensive approach to digital transformation will be in high demand this year and well into the future. With the right skills, expertise, and partners, MSPs will be well-positioned to leverage the growing cloud market opportunity as they help enterprises plan and execute large-scale cloud migration projects.
No doubt expanding skillsets will be required for MSPs to successfully compete in the coming years. Forrester Research reports that while 64% of technology spending currently flows through the channel or indirect sales, by the end of the decade this number will drop to 33%. IT spending is projected to grow to $7 trillion by the end of the decade, although the channel’s share of revenue stagnating at approximately $2.2 trillion. with traditional channel partners facing stiff competition from marketplaces and direct sales.
Strategies For Growth
Organizations that haven’t jumped on the cloud bandwagon quite yet will do so once they assess the costs involved in maintaining traditional on-prem software and services as compared to what they’ll save by adopting cloud applications and infrastructure. Businesses are tired of the long-term software renewal contracts they’re locked into as well as the constant maintenance and management traditional applications require.
As MSPs look ahead and consider how they can build more service-centric businesses in 2022, they should consider these three strategies to grow their businesses and create new revenue streams:
- Regional Focus: MSPs should consider increasing visibility in their regions by building a reputation as a trusted partner capable of assisting local businesses, including those in highly regulated industries, such as finance, healthcare, and local government, to meet compliance mandates, achieve sustainability goals and provide data asset life cycle management. By building relationships locally, MSPs will establish themselves as an invaluable business partner.
- Partner Up: With Forrester predicting that 90% of IT sales will be partner-assisted before, during, and after the sale, small to midsized MSPs that lack expertise in cloud technologies, as well as other critical services such as cybersecurity and data management, will find that it often makes sense to partner with channel-friendly vendors. Vendors that can supplement the MSP’s skillsets will allow the service providers to expand their offerings and take on bigger, more expansive projects.
- Holistic Service Offerings: As companies look to outsource security infrastructure rather than manage it themselves, they will look for help navigating the growing threat landscape and protecting IT assets and customer and corporate data from breaches and theft. By combining security offerings with data management services, MSPs can provide a holistic data management package that helps companies manage the entire data asset life cycle, including providing erasure-as-a-service to securely erase devices at end-of-life and then prepare them for reuse, resale, or recycle.
There are many opportunities for MSPs to grow their businesses in 2022 if they can seize on the growing trend toward cloud adoption and digital transformation. The service providers that make the transition to a more service-centric business will not only future proof their company, but also will be in a better position to help enterprise customers, both regionally and nationally, creating a reputation as a trusted business partner and building long-term working relationships in the process.
About The Author
Christina Walker is Global Director of Channel Sales & Programs for Blancco.