Article | February 2, 2016

6 Ways Cloud Is Changing Managed Services

Christine Kern

By Christine Kern, contributing writer

Cloud Is Changing Managed Services

CompTIA Research and Market Intelligence provides technology, channel, and workforce insights. In its research report How The Cloud Is Changing MSPs, CompTIA, the IT industry trade association, reveals that the cloud is, in some respects, making it harder and, in other respects, making it easier for managed services providers (MSPs), which must adjust their business models to keep abreast of the transitions.

CompTIA presented six ways that cloud is impacting MSPs:

  1. The Cloud is leveling the playing field. The CompTIA 4th Annual Trends in Managed Services study found more end-user businesses are using managed services contracts to cover their cloud computing needs. Cloud is enabling lower-end providers to challenge traditional IT outsourcing providers like IBM Global Services or Accenture and compete on delivery of SaaS-based services like email and cloud-based storage.
  2. More MSPs are selling cloud-based services. CompTIA found that almost half (45 percent) of organizations rely on some outsourcing of cloud-based services, and many of these could be included in an MSP contract. Among MSP users, 52 percent reported working with an outside firm for cloud-based initiatives in the past 12 months. And while 60 percent of those using MSPs reported that cloud-based applications and infrastructure were part of their package of services, only 9 percent of respondents said they have no plans to deploy such apps.
  3. MSP engagements are wide, but not deep. CompTIA found that while many end users are engaging MSPs for specific IT management functions, the depth of MSP engagements is actually quite shallow. This means that there are actually more market opportunities available for MSPs to scale up additional service delivery to existing clients by demonstrating their worth.
  4. It isn’t just about the money anymore. Cost savings may have been the initial draw for organizations to gravitate towards MSPs, but it seems that it is no longer the main incentive. Today, customers are searching for benefits beyond budget reductions, and the cloud has made it easier to sell MSP businesses. The main driver today is how MSPs can specifically meet a particular IT shop’s needs.
  5. Cloud services have changed the MSPs table stakes. According to CompTIA, “Cloud services have rewritten the rules for how managed services are purchased and deployed.” A new customer mindset now exists that extends into managing information and delivering business benefit from data that can navigate between on-premises cloud-based servers, and social networks. MSPs need to adapt to this new mindset in order to be successful in today’s marketplace.
  6. Despite cloud, an MSPs physical location is critical. While it might seem counterintuitive, physical contact with MSPs is identified as a crucial factor for CIOs. CompTIA says that MSPs need to “sharpen their listening skills to craft additional long-term strategic plans for their customers.” It will be face-to-face meetings that will win — and maintain – business relationships. And CIOs reported that they preferred dealing with MSPs that were either within driving distance or had a strong regional preference.

Understanding the customer mindset is a crucial ingredient in any successful managed services practice, and the Cloud has altered that mindset. MSPs must be cognizant of the shifts and respond accordingly in order to be successful in today’s evolving marketplace.

CompTIA’s research How the Cloud Is Changing MSPs is available to CompTIA registered users. Additional content is available to CompTIA Premier Members. This guide is just one of the many technology and market intelligence resources available at CompTIA’s website’s “Insights & Tools.” CompTIA is dedicated to advancing industry growth through educational programs, market research, networking events, professional certifications, and public policy advocacy.