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Tuesday, September 20, 2011

Practical Steps to Jump Starting Cloud-Based Services

I recently attended MSPWorld in Austin, Texas, and participated on a panel that discussed how to jump start cloud-based services. Members of my panel, Rob Bissett, VP Product Management, 6fusion; Brian Hierholzer, President and CEO, Artisan Infrastructure; Brian Hierholzer, founder and chief executive officer of Artisan Infrastructure; and Bud Walder, Enterprise Marketing Director, Dialogic Corporation, answered four good questions related to cloud services.

Many MSPs were born from a time of break/fix. In the last 10 years, many MSP moved into managed services to increase customer “stickiness” and enhanced margin. Today, the cloud offers a new opportunity/challenge for the MSPs and is going to be very disruptive to the traditional IT market. How do you see the MSPs evolving in the next few years ?

The consensus from members of the panel was that the cloud is just the next generation of managed services. If the VAR/SI partners in the audience have been providing managed services, the cloud represents an evolution of managed services. The MSPs can “roll their own” cloud offering but there complexities in the software infrastructure. The MSPs can take advantage of cloud providers that allow for a private labeling of their infrastructure and stick to the applications they know based on their current expertise. Although the margins maybe be a bit lower, the MSPs do not have to manage the infrastructure, which will free up the MSPs to focus on requirements of their customers.

With the emergence of Microsoft “cloud” going to direct to the SMB market and with Google and other major telcos serving the SMB market, how can the MSP’s build a brand identity in the cloud market ?

The advantage the MSPs have is localized knowledge and long-term customer relationships. In addition, the offerings from the large cloud providers will be generic in nature; this provides an opportunity for the local MSP to customize its offering based on customers' requirements. There was also consensus that Microsoft will have to eventually provide a cloud channel program.

What is the recommendation of the panel when an MSP is building a business to decide if it should offer a cloud offering for the SMB market?

The key points an MSP should consider is 1) knowledge of the potential service offering; 2) knowledge of what the market is willing to pay for a particular offering; 3) is its force multiplier based on current “on the bench” knowledge within a MSP; 4) clear understanding of the potential SLAs it will be offering and the potential impact to its business if an SLA is missed; and 5) application road map on what will be the first offering and what are the subsequent offerings to its customer base.

How can cloud providers overcome concerns about security and privacy when talking to customers about moving to the cloud?

MSPs are in an excellent position to “demystify” the cloud for their customers. With localized market knowledge and their trusted adviser status with their clients, the MSPs have access to specific knowledge of various vertical markets. Through a collaborative sales approach, the MSPs can work through specific security and compliance issues with and for their clients. This is a big advantage when SMBs are considering moving into cloud-based applications and they have a true partner to qualify their opportunity/risk profile when moving to the cloud.

Marshall Bartoszek

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