By Brian Albright, Business Solutions Magazine
The shift to cloud-based solutions presents new competitive challenges to VARs and MSPs.
Managed security solutions, like almost every IT service or product, are migrating to the cloud. According to Luke Walling, VP of sales and operations for security solutions provider AVG Technologies, that means the competitive landscape is rapidly shifting as larger providers begin pushing solutions directly to clients. Of particular interest is the announcement by Michael Dell that his PC company’s future rested in IT services (including security, networking, and storage), and not in hardware. “That remark hit home with many of our partners and resonated with me,” Walling says.
Hosted/cloud-based solutions could be a challenge for MSPs that are suddenly finding themselves competing directly with their own vendor partners and scrambling to adjust to a new sales (and profit) model. “What seems most interesting right now is how traditional managed services can fit together with the shift of everything to the cloud,” Walling says. “How do you sell the cloud? How do service providers sell cloud solutions and remain profitable in this environment?”
The number one concern for customers is the security of data in the cloud via the hosted solutions vendors offer. “One of the biggest obstacles our partners have is convincing their client base that the cloud is secure; that’s the top concern we hear,” Walling says.
The other chief concern is the safety of the data, how it’s backed up, and what the protocol is if the provider goes out of business. The key thing to look for: physically secure data centers, openly published company information, and secure and redundant storage (along with healthy financials).
Competition Increases In Service Space
With more vendors selling traditional and cloud-based services directly, resellers and MSPs are increasingly competing with their own partners. “The cloud is kind of a gray area for the channel,” Walling says. “How do you make your margin, and how do you know your vendors aren’t going to take that business direct?”
Resellers and MSPs should seek assurances that when it comes to cloud-based customers, the relationship will be secure between the client and the channel partner, with little or no interaction directly with the vendor. “Competition is a concern, and we need to be up front in what we’re doing and give the partner the power to protect their customer,” Walling says.
According to Walling, a large percentage of customers will always rely on the service provider. “The channel is still going to have a place in the cloud, it just isn’t going to be as simplistic as it was in the past,” Walling says. “Many business owners are not going to deploy solutions, even if it’s easy to access in the cloud, on their own. They have better things to do, like run their own businesses.”
In terms of specific market opportunities for security services companies, Walling says clients are still looking to outsource antivirus and firewall solutions. “A firewall is something the channel has been successful in selling, managing, and delivering, as is antivirus technology,” he says.
Content filtering is an emerging opportunity. “We’re seeing interest in moving that function to the cloud,” Walling says. “Content filtering is something SMBs don’t want to do. They want to gain the productivity improvements, and they want the safety of knowing they aren’t liable for inappropriate browsing at work, but they don’t know how to get there.”
They don’t, however, want to maintain these systems on their own. “There is a channel opportunity on the services side to properly implement these solutions, make sure they can’t be bypassed, and make sure they are reporting on what’s happening inside the customer’s organization,” Walling says. “That’s something the average SMB isn’t capable of doing, and why would they want to spend time on that? That’s the not the business they’re in.”
The key will be wrapping services around these specific solutions to help cement the relationship with clients, particularly since it is becoming easier for clients to migrate their business to other providers or vendors. “The channel has to really step up and learn how to embrace the cloud, deliver services that customers want and need from the cloud, and do it more efficiently than ever before,” Walling says. “Particularly with the competition coming from major vendors, everyone is involved at some level. You have to find ways to stay competitive, and embracing the cloud now is definitely critical to doing that.”