MSPs Are Letting Cloud Opportunity Float By

Written by Joe Kozlowicz on Thursday, September 1st 2016 — Categories: Cloud Hosting

Do MSPs have their head in the sand when it comes to cloud?It’s time for MSPs to go all-in on cloud. A recent Techtarget survey found that over half of surveyed managed service providers were not offering any cloud services. No backup in the cloud, no managed cloud migrations, nothing. CompTIA discovered 44% only provide cloud services upon request.

Why are most MSPs holding out on cloud? One reason could be that reselling cloud isn’t always as profitable as providing consultation or hardware sales. But that reasoning won’t hold up as hardware sales continue to decline and more companies understand the value of cloud. Some surveys claim that 90% or more of companies are using or plan to use the cloud in some manner. But 32% also report that a lack of resources and expertise is stopping them from taking the plunge.

Managing cloud infrastructure and guiding customers in their cloud journey are both strong opportunities for MSPs. Those holding out on implementing cloud services risk missing out on the future paradigm.


What's the Hold Up?

The Techtarget survey and several others also point to a troubling fact: the MSPs that are offering cloud services aren’t generating much revenue from them. Both Autotask and Techtarget found that less than a quarter of revenue came from cloud services.

Most experts attribute this to a hesitant embrace of the cloud, if the cloud is being used at all. MSPs tend to describe themselves as consultants, jacks of all trades, ready to help with whatever your technology problem may be – but without offering concrete options and solutions. Instead of waiting for the cloud opportunities to come to them as more common businesses learn about the cloud, MSPs must start approaching their customers proactively and presenting the benefits.

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MSPs need to have a cloud platform ready to deliver the most commonly used and requested IT solutions, like file sharing, backup, collaboration, and e-mail. They must be experts in deploying and managing all aspects of this platform. SaaS and IaaS partnerships help solidify this strategy, with marketing and sales support often included.

A cloud provider partnership can also help with another major hurdle to providing cloud management: hardware and platform costs. One MSP who spoke to Techtarget reported difficulty making margins on their in-house data center, from which they were selling newly upgraded storage. Let an infrastructure hosting company make those investments. After all, one major cloud advantage is on-demand provisioning.

Ultimately, MSPs must begin to move away from single project contracts and the time consuming break/fix model. Monthly recurring contracts for cloud management can offer a reliable revenue source, which can in turn be reinvested into the MSP for future growth, new services, and more staff to provide better service.