Many large and small enterprises rely on managed service providers (MSPs) to deploy and maintain the software solutions best suited to their business needs; to ensure that servers and other devices are always up-to-date, online, and secure; and to take responsibility for data storage, cloud backup, and cloud recovery.
The classic MSP model, however, has been disrupted by the advent of the public cloud. Instead of on-premises CRM, ERP, and other enterprise software solutions being deployed and maintained by MSPs, today enterprises can choose from a wide selection of robust as-a-service solutions with built-in IT capabilities. Similarly, public cloud vendors are eroding the MSP business model by providing end-to-end solutions for key IT functions such as data storage, backup, and recovery. The successful MSP, therefore, will be the one who adapts as quickly as possible to our new cloud-driven world, shifting its focus from providing infrastructure-based services to becoming the go-to resource for optimally integrating tools and data across multi-platform deployments.
How MSPs Can Capture Value in the Cloud
The cloud is a complex ecosystem that has created a whole new domain of IT expertise. This expertise can either be built entirely in-house by the enterprise itself, or it can be provided in whole or in part by a third party, such as an MSP that has acquired extensive cloud-related experience and know-how. The following are some examples of how MSPs capture value and thrive in the cloud:
- MSPs have a very important role to play in helping their customers plan and execute their cloud migration: Important decisions need to be made regarding the type of deployment (public? private? hybrid? multi?) and the smooth integration of what will most likely be a multi-platform deployment. MSPs are well-positioned to become trusted centers of excellence for successful cloud migrations.
- MSPs can provide specialized services: For example, with so many different applications and platforms, it is not unusual for enterprises to need complementary software tools to tie it all together. Experienced, cloud-focused MSP development teams can be a cost-effective solution for filling these gaps. Security event monitoring and management is another area in which MSPs can accumulate expertise and provide specialized services.
- MSPs can develop industry-specific cloud expertise: As more and more sectors embrace the cloud—from healthcare to retail, to banking—opportunities are being created for MSPs to develop and implement best cloud practices that take into account a sector’s unique regulatory, privacy, and other requirements.
- MSPs can stay on top of a highly dynamic field: Every day there are new applications and infrastructure offerings for the cloud, or new features being added to existing cloud solutions. MSPs provide a valuable service to their customers by staying abreast of novel developments and making sure that their customers are always using an optimal set of features, tools, and platforms.
MSP Business Models Are Also Changing
MSPs are also changing the way they do business. For example, there are MSPs who have adopted an “as-a-service” model. After migrating the customer’s existing IT systems to the cloud, the MSP takes full ownership of managing the cloud-based assets and sells the business function back to the customer as-a-service. Even if they continue with the more traditional pay-as-you-go MSP business model, there is a growing expectation from their customers that MSPs work more transparently. To achieve this, MSPs are themselves adopting next-generation cloud-based CRM and project management platforms that let them do their job in full view of the customer. The best MSPs welcome this transparency as an opportunity to showcase the value that they bring their customers day in and day out.
Tools for Cloud-based Next-Generation MSPs
Cloud players themselves are encouraging MSPs to accelerate their and their customers’ migration to the cloud by offering MSP programs. For example, AWS’ Managed Services Program “is designed for AWS Partner Network (APN) Consulting Partners who are skilled at cloud infrastructure and application migration and deliver value to customers by offering proactive monitoring, automation, and management of their customer’s environment.” The program provides technical and marketing support so that qualified MSPs can better deliver AWS cloud services as business solutions to AWS customers. Another example is N2WS’ Software Partner Program for MSPs and other IT service providers. N2WS provides enterprise-grade AWS backup and cloud recovery services. With its multi-tenant architecture and flexible deployment options, CPM allows MSPs to increase revenue streams by offering their customers a secure and reliable backup-as-a-service using a single CPM server. There are huge advantages in this pay-as-you-go model, and, in addition, detailed reporting is available on each AWS account.
Final Notes
Every paradigm shift leaves in its wake a trail of defunct companies that failed to adapt quickly enough to the new order. MSPs who learn to ride the wave of cloud computing will thrive as more and more of their customers migrate their IT assets to the cloud. Next-generation MSPs will flourish as they become essential enablers in the cloud revolution.
