By Brian Albright, Business Solutions Magazine
Hybrid cloud solutions will help resellers hold on to storage business.
The emergence of cloud storage and backup offerings has met with a mixed response in the channel because of some of the integration and compensation challenges that the cloud presents. Hybrid cloud storage (combining off-site public and private cloud services) can provide new opportunities for VARs and MSPs (managed services providers) and could potentially restructure the way storage is bought and sold in the future.
“The entire shift to the cloud, both in data storage and application hosting, presents great opportunities to rethink the way we store data and allocate computing resources, but it also presents a potential danger in shifting control of those resources and the related hardware sales to a few giant public cloud entities,” says Matt Jorgensen, director of marketing and product management at Equus Computing Solutions. “A hybrid cloud approach is critical to allow MSPs to continue to participate in the computing resource landscape by placing hybrid cloud hardware on-premises with the customer and in their own hosting sites.”
Justin Moore, CEO of Axcient, warns VARs and MSPs to watch out for the pitfalls of moving customers to the cloud. “Cloud-based data storage is really just a commodity, not a service. It provides the illusion of protecting a business but misses the point of preventing downtime. This is why I often say ‘Backup is dead.’ Backup alone doesn’t address the real needs of businesses operating in a 24/7 world.” Moore’s advice to overcome this potential pitfall is for VARs and MSPs to focus on their customers’ RTO (recovery time objective), which addresses the cost of downtime. “That downtime gap most often affects a business’ mission-critical systems, and it costs even the smallest businesses an average of $12,500 per day,” Moore says. “This, plus the added cost of lost customer satisfaction, makes downtime unacceptable.”
As storage costs continue to drop and storage options become more widely available, MSPs can host their own private clouds and offer more personal service to their customers, along with secure, partitioned storage offerings that allow enterprise customers to trust that their data is protected from other customers’ data. “Once these services are in place and begin to be widely accepted, storage purchases may shift,” says Peter Howard, vice president of worldwide channel strategy and sales at NetApp. “The shift would move storage purchases from the end user to the MSP, which could have a huge, long-term impact on both reseller sales and product/services mix. Many of NetApp’s top resellers have shifted their business models from being primarily product-focused to a mix of product and professional services. They are becoming services-led, positioning themselves as trusted advisors to their customers, both at building private clouds as well as delivering advisory services on when, why, and how to migrate workloads to MSPs.”
Don’t Discount On-Premise Components
Before evaluating hybrid cloud offerings, however, resellers have to take a look at how they transition their clients to cloud-based storage solutions. According to Curt James, VP of marketing and business development at StorageCraft Technology, moving customers directly to the cloud may very well be a mistake.
“It’s a risky proposition to take everything you have and move it to the cloud, and it’s not viewed as a best practice,” James says. “We have found that those who have done so are now looking for ways to go back on-premise. Our recommendation is to first have a local backup and then back up to an off-site location, such as a cloud location. Imagine a scenario where a user has up to 2 TB in the cloud and the cloud goes down. Additionally, resellers will be best served by selling a solution, not components and gigs of cloud storage. Channel partners will be wise to focus on offering business continuity services, disaster recovery as a service, and service level agreement choices that meet the needs of their unique customers.”
Jorgensen adds that another common mistake VARs and MSPs make is assuming that customers don’t want on-premises hardware. “More often businesses like the off-premises advantages of cloud computing, either in an MSP’s local data center or a larger public cloud,” he says. “But the MSPs often miss the opportunity to continue to sell on-premises hardware solutions to pair with both these private and public clouds off-site. This hybrid approach offers value to the end customer in greater peace of mind and control over critical data and applications and allows the MSP to continue to offer hardware solutions and services to its customers.”
According to Axcient’s Moore, using multiple-point solutions to achieve customers’ goals is another losing proposition. “While 59% of companies use four or more solutions to try to achieve total protection, this is an expensive, complex, and error-prone method that doesn’t scale,” says Moore. “Managing multiple-point solutions also makes it very difficult for the VAR or MSP to be profitable. With a unified platform, on the other hand, clients have continuous access to data, applications, and systems through any server failure, power outage, or natural disaster like Hurricane Sandy.”
Another potential pitfall for resellers to watch out for: having inadequate executive sponsorship among the client’s leadership team and being tempted to take on opportunities that are not part of the reseller’s core service offerings. “If MSPs make a habit of deviating from their core products, the line starts to become a mishmash of custom solutions,” Howard says. “The best way to manage this urge is to have a sound deviation approval and documentation process. This allows MSPs to take down deals that make economic sense and pass on deals that don’t.”
Know Your Limits With The Cloud
In addition, MSPs may face challenges in complying with different governance and security models (depending on the client) and will likely need a cloud SLA (service level agreement) monitoring tool. Resellers may also have a difficult time building a cloud solution on their own, depending on their size, ability, and experience.
“If a reseller is adept at setting up on-site and off-site (backup and data recovery) solutions, then an external cloud backup solution may not be necessary,” James says. “But, if a reseller is looking to offer secure off-site replication functionality in a turnkey fashion, using a vendor with a cloud solution may provide a good fit. Understanding exactly what cloud services the vendor brings to the reseller will equip the reseller to offer SLAs that meet customers’ cost, security, and performance requirements.”
Compensation can be another internal hurdle. It may be difficult to motivate the sales team to sell a hybrid solution if it includes public cloud services, because the compensation model isn’t clear. “A bundled approach (where the sales team sells a traditional end user solution with additional subscription options for public cloud) can be a very effective way to address this issue,” Howard says.
On the customer front, network bandwidth and security concerns almost always come up when discussing cloud storage (both traditional and hybrid). MSPs can add value by educating customers about hybrid cloud approaches and the benefits available by using them.
“In theory, data held in public clouds is always available and can be accessed from anywhere, but it can also be costly and highly dependent on wide bandwidth to get large amounts of data up and back from the cloud when needed,” Jorgensen says. “Combining backup in a local private cloud scheme allows for quicker data recovery in the event of a data-loss incident and is an opportunity for MSPs to offer additional value beyond just offloading data and computing to a public cloud.”