For years, the MSP community was there to take the operational IT headache away from their customers. As the sole providers of technology, they addressed the IT needs of their customers to everyone’s satisfaction, primarily on infrastructures built and managed in private data centres. Until the public cloud entered the scene.
Dan Verma, Dipesh Shah and Jurjen Uijttenboogaart, three senior cloud solutions experts at Insight, discuss the impact of public cloud on MSPs, which considerations they have and how they can find lucrative new ways forward in a changing world.
Dan Verma, UK Cloud Channel Sales Manager: “When the large hyperscale providers – Amazon, Google, Microsoft – introduced public cloud to the scene, MSPs were dubious about it. They saw the big vendors they had been working with for years sneaking in as giant competitors and did not see how public cloud ever benefit their business. The transformation to the cloud got off to a slow start.”
MSPs in prime position
Jurjen Uijttenboogaart, EMEA Cloud Transformation Specialist, continues: “Over the last two years, however, we have seen a major turnaround in cloud adoption, expedited by the huge demand for remote workplaces since the pandemic. MSPs increasingly see the public cloud as the only option that allows them to offer agility and scalability in the most cost-effective way. They now find themselves in a prime position to make a positive impact and actively reach out to customers with cloud offerings.”
From network-centric to service-centric
Dipesh Shah, Executive Account Manager - Cloud Channel Solutions, agrees, but also understands the dilemma MSPs face in this transition. “Meeting customers' current IT demands in the cloud requires considerable technical and economical expertise to equip and optimize the data centre with the right cloud solutions and develop new ways of working.” Dan Verma adds; “When substantial parts of the on-premise data centre are migrated to the cloud, service providers must evolve from a network-centric to a service-centric environment to stay relevant. This means understanding the sweet spots where they can achieve the most revenue and profitability in the future, from new customers and existing customers, without losing market share to competitors.”
Two models: business development or merger and acquisition
Two models seem to emerge in how MSPs want to stay relevant in the future. One is that companies adopt a business model that prepares them for the next phase of business development or growth. This prevails both in companies who want to get back on track by business optimization as well as in companies who are looking to transform and find new ways and technology to best serve their customers and achieve the most.
The other model is more commonly seen among smaller companies. Quite a few of them will decide it is time to sell their business and reap the benefits of the hard work in previous years. Their model is to boost their company to be the optimum and preferred choice for acquisition. “With three to four mergers per month, that is exactly what we see happening in the UK nowadays,” says Dan Verma.
Four focus areas for transformation
“The MSP market today is accepting public cloud,” says Dan Verma. “Companies are ready to set out on their journey and address the business issues on their path. But the question is: where do you begin? The approach we take with clients breaks down the journey to the cloud into four key areas around infrastructure optimization and sustainable value.” Dan Verma states; “First, we optimize the infrastructure and licenses to free up budget. Then we look at how to transform the data centre and software to support new agility. Next, we will address workforce and scalable collaboration tools to empower employees and increase productivity. Finally, we will tackle data analytics, helping companies use their data to accelerate the go-to-market, drive high revenue and improve profitability.”
Different levels of cloud readiness
Jurjen Uijttenboogaart is well aware that the right approach depends on where MSPs are in their journey. “I see companies adopting a ‘public cloud, unless…’ strategy, for example unless compliance requirements apply. At the other end of the spectrum are MSPs who are still exploring their future strategy and are looking for initial guidance. In this case, we will start with discovery workshops to discuss all questions related to the concept of public cloud, what benefits it can bring, what pain points it can remove in terms of uptime, storage, network connectivity. The ultimate goal is to understand what the service provider can solve for his customers and to align the business accordingly.”
“You also have to keep in mind the current situation of the company,” adds Dipesh Shah. “Service providers may still have investments in infrastructure and software that they want to realize. The team may be concerned about what happens to their jobs when workloads are offloaded to the cloud. It is important to acknowledge these concerns during brainstorm sessions, architecture workshops and building environments, so that people themselves can understand what the transformation looks like.”
Resources, expertise and platform
MSP businesses today are going through huge transformation changes. They are often not in
a position to hire or retrain their staff at such short notice to prepare for a transition to the cloud. “When we work with service providers, we make available all our technical resources, expertise and our managed service platform to help them create the offerings they are looking for without having to retrain or hire new staff. Once they have figured out if the new service is lucrative for the business, they can decide to either keep outsourcing or gradually take it back in-house and get their employees trained,” says Dan Verma.
Intermediary between vendor and business
One thing that sets MSPs apart from other companies is that service providers have the most tech-savvy individuals in their organization. They will only seek support in areas that they themselves are less familiar with. So how do you add value as a partner? Jurjen Uijttenboogaart: “In our experience, we are most valuable as a partner when we can act as an intermediary between the vendor community and the MSP and explain and relate the full vendor landscape and technology roadmap to their own business and IT strategies. Combining expert advice with hands-on support with the platform and resources to assist MSPs into their cloud journey, as Dan just said. From the very early pre-project explorations up to the actual transformation, optimization and management.”
Contact us to find out how we can support you in your cloud adoption journey.
Sales Manager / Client Director - Cloud Channel
Account Director - Cloud Channel
Cloud Transformation Specialist