MSPs and IaaS: What will you do in 2015?


There’s no denying it: the cloud industry has reached maturity. And businesses are lining up to make a move to the cloud. According to Gartner, organizations will store 36% of their content in the cloud by 2016, a big jump from the meagre 7% they stored in 2011.

Managed service providers (MSPs) who want to tap into this growing market will have to decide how to approach the cloud. They’ll have to assess their customers’ needs, what kind of offering they can deliver and what kind of strategy will ensure their success. What kind of MSP are you? Here are three common profiles.

The Risk-Taker

This type of MSP likes to be in control. To make sure he has complete ownership of the infrastructure, he won’t go with any public cloud provider. He’ll build his own cloud. The biggest benefit? 100% control. Guaranteed. From the infrastructure’s components to updates and maintenance, everything will be in the hands of the service provider.

But at what cost?

If you’re thinking about deploying your own cloud, consider these facts:

  • The initial investment is high.
  • It’ll take about three years before you see a Return on Investment (ROI).
  • Competition in the market is fierce and your cloud cost won’t be able to match what the big providers are offering.

You should also account for time spent on maintenance and updates. MSPs who take this route should also know that it can’t be sustained forever.

The Conventional

Next is the conventional MSP. Unlike the risk-taker, this guy will trust another provider for his cloud needs. And that provider will be a big brand that everyone knows: Amazon, Google, Microsoft…

This route has some benefits. The MSP will be able to build his own bundle to resell. He’ll also find it easier to convince customers to move to the cloud. After all, who doesn’t know Amazon or Microsoft? The risk? Almost non-existent.

What’s the catch? Well, competition in this market is brutal. There are a lot of other players out there reselling the same cloud. Your customers can get cloud offerings from almost anyone, and probably at a lower cost!

Can you make a lot of money? If you want to sell, you’ll have to go cheap. Or, you’ll have to develop a value proposition that will be unique in your market.

The Trailblazer

Last but not least, we have the trailblazer. This type of MSP will be looking for a white-label provider to get the best of both worlds.

Relying on a white-label provider will help the MSP build his credibility. He can offer an enterprise-grade infrastructure without investing a lot of money to deploy his own cloud. And he can benefit from the latest hardware updates and maintenance and still be in control of server usage. Scalability will never be an issue. Adding or removing servers can be done quickly, ensuring that you pay only for what you use.

The best part of this model? You can sell it as your cloud to your customers. It gives you all the flexibility you need to tailor your offer and sell services that cater to your customers’ specific needs. The end result? A boost in your credibility.

The only thing you’re not getting from this model is a hands-on approach to the hardware. But since you can choose and configure your servers, this shouldn’t be a deal breaker for someone who wants to increase profits in the IaaS market.

What’s your strategy for 2015?

The post MSPs and IaaS: What to Do in 2015? appeared first on SherWeb.

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22 Jan 2015, 4:49 p.m.

IMHO - The blush is off the rose in IaaS. The 'bigs' are dropping prices almost weekly for the hosting part...and I predict Data Allocations will be the next to drop in price/increase in volume. Softlayer/IBM seems to be leading in this particular the moment.

What MSPs can look at is Over The Top services to host on whatever preferred IaaS. Even better is a PaaS offering that is flexible enough to host publicly, privately, and everything in between. Being able to brand and sub-brand this in advance of market saturation enables ongoing direct and indirect revenues while staying out of the commodity bloodbath.