During a recent joint webinar, I was talking to Charles Weaver, MSPAlliance’s CEO, about MSPs and the cloud. He said something provocative:
MSPs don’t need to transition into the cloud. It’s not like when they had to transition from being value-added resellers. MSPs just need to be able to manage customers in cloud environments.
And for any MSPs sitting on the fence about whether or not to offer cloud services, this realization won’t come a moment too soon.
SMBs are Adopting Cloud Services
Cloud adoption is continuing to grow as companies see the benefits that clouds deliver as more important than the attendant risks.
Deloitte Consulting LLP’s recent study, Disruption in the Mid-Market: How Technology is Fueling Growth, reports that 64% of respondents were either building out or have achieved a mature cloud-computing resource. Only 2% are still ‘waiting’ on investigating cloud solutions, down from 14% two years ago.
Think that Deloitte’s mid-market companies are much larger than your client base? Then turn to Comptia’s 2015 Enabling SMBs with Technology. According to this report, SMBs are:
- 65% say they continue to work with firms they have a history with moving to the cloud.
- For companies with 10-249 employees, 23% use cloud services
- For companies with 250-499 employees, that percentage grows to 35%
- Looking for IT innovation. When asked what would make them select a new IT partner, 29% cite lack of innovative solutions from their existing partner, while an additional 16% specifically cite cloud expertise.
The message is clear – your client-base is increasingly using cloud-based services. Ignore the fast-paced evolution of this trend at your own risk.
How to Be an MSP in a CSP World
Don’t get stuck on the distinctions between an MSP and a Cloud Service Provider (CSP). To a large degree, the differences are marketing. Of course, every CSP isn’t an MSP, but an MSP can also be a CSP.
The problem is that it’s not always immediately intuitive how to sell cloud services at a profit.
However, the best position to take on the cloud isn’t standing on the sidelines and waiting for someone else to figure it out. You can’t afford to be the last MSP to get in the cloud services game.
Remember that ‘cloud’ is not a product by itself – it’s an object that needs to be managed like a server, firewall, switch, etc. If it can be managed, then MSPs still have a very relevant role to play in the current cloud era.
Top Cloud Offerings to Explore
What cloud offerings make sense for your clientele?
As always, talk to your customers about what their needs are – do your homework. During these conversations, however, don’t try to sell cloud. Just talk to them about their challenges and priorities, and then think about how cloud services could impact both your delivery model and their business need. A cloud service could become a new portion of an existing offering, or could be an entirely new service line.
Here’s a focused list that Charles presented in the joint webinar:
- Cloud Hosting
- Backup and Storage
- Bring Your Own Device (BYOD)
- Identity and Access Management (IAM)
- Document and File Management
Charles and I agreed that authenticating users and their access to data, apps, and things is the issue of our time. Every day, the media delivers stories that increase everyone’s awareness of how critical these issues are.
In a mobile world, where people are logging into company systems on the road and in airports, IAM is only going to grow in importance. While MSPs are starting to sell this service, it is still emerging, with a lot of growth ahead. IAM will eventually make the same shift from nice-to-have to must-have that Backup services did. Pay attention to this shift – it signals opportunities for MSPs in 2016 and beyond.
Dos and Don’ts
- DON’T aim to the least expensive MSP on the block. Whichever cloud services you select, make sure your offerings are not based purely on price. You might get business, but it won’t necessarily be good business.
- DO make sure your offering is distinctive. Keep in mind that if you’re doing the same exact thing that everyone else is doing, then you are limited on price. So, make sure you’re doing something different – adding additional value – that distinguishes your service from everyone else’s. Perhaps you include reporting, monitoring or proactive IT management embedded as part of a larger service package.
- DON’T just buy on price. Be sure to keep this philosophy in mind when you’re shopping for a cloud partner. In fact, selecting a cloud partner on price could be the biggest mistake you make.
- DO your homework. A full discussion on picking a cloud partner is a topic for another blog. However, make sure you carefully evaluate cloud partners along many dimensions – price, service levels, security, financial stability, process transparency, etc.
Cloud isn’t going anywhere, and MSPs can’t afford to ignore the various new cloud services proliferating in the business and technology world. To continue to grow your business, you have to evolve to meet market demands and requirements. The point is not to just jump into cloud – but to analyze the situation and then make a calculated risk for your business. But the biggest risk is doing nothing .
Take the time you need to do it right, but start your research and analysis today.