By Satish Hemachandran, Cbeyond
In the dynamic IT marketplace, managed service providers (MSPs) must regularly re-jigger their business models in order to survive — and thrive. And for smart MSPs, there is plenty of thriving on the horizon. According to a recently published INSIGHT Research report, MSP services are expected to grow about 11 percent per year globally through 2017, a rate that far outpaces the anticipated overall IT growth rate. Not surprisingly, driving the expansion is an ongoing demand by businesses — especially SMBs — for outside experts to migrate them to new technologies and platforms in a manner that reduces (or even eliminates) IT capital expenses.
Who better than MSPs — the longtime supporters and advisers of SMBs — to lead them to the IT promised land?
With added opportunity, however, comes heightened competition, and MSPs that are slow to embrace cloud computing, mobile platforms and new pricing models (like per-user) run the risk of being irrelevant afterthoughts in a marketplace moving at broadband-like speed. Thus, the ability to offer wide-ranging services via robust and secure platforms is critical for MSPs, which in recent years have expanded their offerings to include managed voice, cloud hosting, integrated voice/data services, Technology-as-a-Service (TAAS), remote monitoring and management (RMM), security and storage, and business continuity among other sophisticated acronym-heavy solutions.
In fact, many MSPs have evolved beyond offering their own managed data centers to outsourcing that function via a variety of advanced cloud hosting service companies, which typically offer these types of cloud services: cloud applications, platforms and/or infrastructure. It is easy to understand why MSPs are doing so — according to a report from IDC, SMBs are expected to grow spending on cloud service by about 20 percent annually over the next five years.
Until recently, however, MSP cloud hosting choices fell primarily into the “all or nothing” categories. On the one hand, they could typically access a cloud provider for a fully-managed public cloud services platform, using standard browsers and technology resources available to a wide range of users. Conversely, they could pursue more of a self-service model, in which the company and MSP could self-administer and — provision most of the necessary services.
While each model has its strengths, they also come with weaknesses that make them less than optimal options for some SMBs and their MSP guides. For instance, a fully-managed public cloud services platform typically eliminates the ability for customization or the addition of value-added services. Also, self-service cloud services platforms can require additional administrative time and expenses that can in many cases offset their considerable benefits.
What has typically been lacking for most MSPs that serve SMBs is a more flexible cloud-based solutions platform, one that could enable varying degrees of scalability and customization based on the dynamic needs and requirements of a rapidly-changing, growth-oriented company.
Fortunately, cloud platforms are now available with flexible features that enable MSPs to be more nimble in the deployment of critical cloud services. These new foundational cloud platforms allow MSPs to cost-effectively migrate business customers to the cloud while preserving their unique, value added applications. They also enable MSPs serve companies with more complex and advanced cloud services requirements, including those with enterprise-class infrastructure.
These flexible platforms support advanced self-service capabilities such as virtual machine (VM) provisioning and management, while also allowing for customized proprietary applications as well as standard a la carte pay-as-you-go services to be layered in as needed. Whether fully managed or lightly managed, this environment allows for customization and scalability within a solid and standardized framework.
Often, vendors offering this level of flexibility do not offer it on the same platform that hosts their fully managed environments. This makes customization and migration from development to production much more difficult and expensive. The new breed of cloud environment uses a common platform for both production and development that can facilitate seamless integration and migration. At the same time, they allow customers to slide up or down the cloud services management scale almost literally at the push of a button. Having this level of flexibility makes an MSP that much more desirable of a partner for rapidly-evolving SMBs.
In addition to delivering a broad portfolio of cloud-based IT services to customers, MSPs can reap significant labor and cost efficiencies. These platforms can significantly reduce the investment in capital expenditures and the manpower required to create and manage a customized platform.
Today MSPs can embrace the cloud as an ally in driving customer value. Open, flexible, foundational cloud platforms that offer all of the benefits of cloud computing without the restrictions are opening up new opportunities for MSPs to do what they do best — know their customers and solve business problems with unique technology solutions.
Satish Hemachandran is Senior Director, Product Management at Cbeyond, a cloud and communications services provider primarily serving the SMB market. He manages the company’s cloud services portfolio, including TotalCloud Data Center and TotalCloud Foundation, which are platforms designed specifically for small- and mid-sized businesses.