Managed Service Providers (MSPs) play a crucial role in helping businesses to scale, globalise, innovate and thrive in today’s connected age. But the journey hasn’t always been so easy. MSPs have been forced to evolve from their co-location hosting roots to become international businesses capable of servicing customers’ global requirements as they journey into the cloud.
Hyperscale public cloud providers, such as Amazon Web Services and Microsoft Azure, have rewritten the cloud rule book, offering businesses endless capacity, huge geographic reach and seamless upgrades to their services. The knock-on effect is many businesses rely on MSPs as few have the skill sets to make the transition to the public cloud internally. Mo Aneese, Investment Director at Livingbridge, offers advise on how MSPs can become valued partners as they help with this move.
Choosing the service offering
Firstly, the decision to support businesses with the transition into the public cloud isn’t taken lightly. Most MSPs will need to upskill staff or make new hires to provide the service level required. Some MSPs that own their own data centres may also be reticent about investing too heavily in multiple public cloud services, as this can impact on the revenue they could be earning from their own private cloud infrastructures.
MSPs, therefore, need to decide if they want to make this investment across multiple cloud services or become a specialist in one. Specialisation normally allows for a better offering to customers, potential reciprocity of leads with the provider and reduces initial outlay in terms of costs, but clearly restricts the level of offering you can provide clients. For many MSPs it makes sense to evolve their offering over time as and when finances, staffing and customer demand allows.
Differentiating your cloud offering
Historically, an MSP’s main differentiator was owning infrastructure, but when competing on public cloud services this is obviously no longer the case.
Businesses typically move to the public cloud because of the efficiencies the environment provides: flexible access, ease of data crunching, and speed of development for applications and services. Therefore, MSPs need to ensure they are winning customers by listening to their needs and supporting their business outcomes, rather than competing on “me-too” services or focusing on cost.
MSPs should help their customers build a roadmap of where they want to be within the next two or three years, and work with them closely to ensure they are achieving their goals. This includes offering training, resource and support. MSPs can also look to offer a broad range of value added services to help differentiate themselves from other providers, such as hybrid cloud offerings, product and service development, and reporting and analytics.
Don’t build infrastructure if you can lease
Knowing where to play in this market without getting crushed is not straightforward, but unless you are doing it for a service specialisation, owning infrastructure can be a bit risky. Why build when you can lease it from a public cloud provider? The benefits are self-evident: lower cost per unit, a larger service stack, endless capacity, geographic reach and never having to think about whether you are operating on the latest and best hardware. This is not to say that infrastructure ownership is dead, but MSPs need to have a good strategic reason to own it, typically linked to specialist service deliveryand based on the demand they are seeing from their customers.
For most businesses, it is a question of when, not if, they will move a proportion of their business into the public cloud. MSPs need to ensure that they become trusted partners to their customers as they make this transition, offering the ongoing support to help them grow their business. If MSPs have a strong partnership with a public cloud provider, listen to their customers and have a customer centric service offering, they will be in a strong position to compete in the market for years to come.