Why Managed IT Services Providers Shouldn’t Be Afraid Of The Cloud

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“Can MSPs beat the cloud?” asks the MSPAlliance. Service Providers shouldn’t be afraid of the cloud, yet that’s a question many MSPs are asking these days.

The rate at which businesses are moving parts of their IT infrastructure to the cloud is increasing day by day.

A report from 451 Research concludes that in 2017 cloud services will account for 34 percent of IT budgets, up from 28 percent just a year before.

What does that mean for MSPs that have built their business on providing services that cloud vendors now claim they can deliver more efficiently and at lower cost?

According to a 2016 survey by CompTIA, cloud computing “top[s] the list of things that keep MSPs awake at night.” The fear is that the reduced costs, increased flexibility and greater ease of use available with cloud-based products will encourage customers to conclude they don’t really need a MSP middle man when they can directly implement cloud solutions on their own.

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Why MSPs Can’t Ignore The Cloud

Stephen Orban, Head of Enterprise Strategy at AWS, notes that in a recent survey of MSPs by CompTIA, 44% of respondents admitted that they only support cloud services when their customers specifically ask them to do so. That “ignore the cloud and maybe it will go away” strategy is simply not a viable option. The fact is that cloud providers are already aggressively reaching out to customers over the heads of MSPs that don’t proactively offer cloud solutions.

“The biggest threat is the born-in-the-cloud guys. They’re more nimble, they’re not tied into any existing business models or margins,” says Rocco Seyboth, vice president of product and marketing at BitTitan Inc. “A lot of the products the born-in-the-cloud guys are trying to sell the customer directly conflict with the legacy MSP’s revenue streams.”

Rather than ignoring the cloud and continuing with business as usual, forward-looking MSPs will themselves become an integral part of the cloud eco-system.

 

How MSPs Can Respond To The Competitive Threat Of The Cloud

As more and more of their customers become intent on moving all or parts of their IT infrastructure to the cloud, the MSPs that survive and thrive will be the ones that embrace the cloud rather than avoiding it. They will see it not as a threat but as an opportunity to gain a competitive advantage by offering customers better solutions at lower costs than traditional approaches to IT can provide.

These enterprising MSPs recognize that they must demonstrate to customers the value-added they bring to the table. So, they develop in-depth knowledge of the cloud-based applications and services that could be most useful to their customers, positioning themselves to be able to integrate the offerings of several vendors or cloud providers into a unified solution that meets each customer’s specific needs.

“The successful MSPs of the future are going to be the ones who know how to integrate services, not just hardware and software. That’s the great challenge of cloud,” says former MSP senior executive Howard M. Cohen. “The big advantage of an MSP is that it’s part of their business to keep themselves current. What services are available, how they are best configured, how they are best combined with others.”

 

Where To Start

In essence, IT is all about data. Applications can’t work without it. So, rather than starting with the complex process of moving applications to the cloud, the best place to begin offering cloud solutions to customers is with data storage. By partnering with a good STaaS (Storage-as-a-Service) provider, MSPs can not only gain invaluable experience in developing and implementing cloud solutions, but can also offer customers storage options that combine superior performance, security, scalability, and reliability with substantially lower costs.

With the STaaS model, customers don’t purchase storage, but storage services. Zadara Storage, for example, works with MSPs to provide customers with comprehensive storage solutions encompassing Zadara-owned hardware and software, 24/7 monitoring and support, as well as real-time capacity scaling, remote backup, automatic transparent failover, and top-of-the-line data security and disaster recovery capabilities. Customers are not required to lay out capital funds to purchase their own storage equipment, but simply pay a monthly fee for only the amount of storage they actually use. This storage can be based either in the public cloud, via cloud providers such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform, in an on-premises private cloud, or in a hybrid combination of the two.

 

The Cloud Represents Great New Opportunities for MSPs

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The cloud is changing the managed IT services business, and in order to survive and grow, MSPs must change as well. But that fact need not be a source of fear. In fact, forward-looking MSPs will see it as an opportunity to grow their business. As Charles Weaver, CEO of the MSPAlliance says, “There’s far more demand for managed services than there are qualified MSPs to deliver them.”

If you’d like to learn more about how MSPs can provide superior cloud-based solutions for their customers, please download the Solving IT Challenges eBook.

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