Just as the IT channel was getting comfortable a half-dozen years ago with managed services, another new service model was vying for recognition – the cloud. Many MSPs have since added cloud-based services, but some still struggle with how to go about it.
If you ask Michael Corey why, the founder and president of Dedham, Massachusetts-based MSP Ntirety will tell you one of the main obstacles is self-imposed: IT service providers fear cloud-based services will cannibalize parts of their businesses. They’ve made money delivering services in a certain way for so long that the idea of replacing it with a cloud model scares them.
Had Corey taken the same tack eight years ago when faced with the opportunity to embrace database virtualization, Ntirety might not have achieved the same success. Ntirety, now part of cloud services provider Hosting, built its reputation on providing recurring managed database monitoring for companies worldwide.
“As a company, eight years ago we adopted this ability to virtualize Oracle databases. It made perfect sense to me, and we’ve never looked back,” Corey says. “It’s not the strongest who survive, but those who have the most ability to adapt to change.”
And if that means cannibalizing part of the business, so be it, Corey argues. After all, whatever you are cannibalizing is bound to become a commodity that brings in less and less profit.
Adapt or Lose
The ability to adapt to change has always helped define success in the IT channel. Being unable or refusing to adapt only makes it easier for your competitors to poach your customers. Corey warns that customers intent on leveraging channel opportunities will seek out other providers if their current MSP can’t help them. “If you don’t do it, someone else will,” he says.
Customers looking for cloud services, he says, typically fall into three categories – those who have a real understanding of the cloud, those who don’t know what it means or does, and those who believe they need the cloud but don’t understand it.
Service providers, therefore, need to be in a position to educate customers on what the cloud is and how it can support their business needs and goals. Of course, providers can’t do this effectively if they themselves lack a good understanding of the cloud or even want to offer the services.
Provide Business Continuity
Cloud services, Corey says, generate good ROI. But if that isn’t enough to convince providers to offer cloud services, Corey says to think about hurricane Katrina and super storm Sandy, both of which left unimaginable destruction in their wake.
Business decision makers who don’t see these storms as a reason to embrace the cloud are fooling themselves, he says. The cloud allows you to geographically disperse data at affordable rates. So if a catastrophe wipes out your business site, you can still access your data to ensure business continuity. “If you don’t understand that, I don’t know what’s wrong with you,” Corey says.
From a provider’s perspective, this is a compelling case to make to customers looking for peace of mind in the event of a disaster.
Do Your Homework
While adopting cloud models makes sense for MSPs, Corey recommends some due diligence before jumping in. Providers need to determine what services make sense for them and identify the right vendor partners.
That’s good advice, and should come as no surprise. Any time you adopt a new model, it’s wise to assess your capabilities to determine what you can handle in-house and what functions can be managed by your vendor partners. Check that your partners are financially stable, deliver reliable technology and can support you.
So choose your partners wisely, but don’t ignore the cloud opportunity. Even if it causes a little pain now, it will be worth it in the wrong run.
Pedro Pereira is Massachusetts-based freelance writer with two decades of experience covering and analyzing the IT channel and technology. He can be reached at [email protected].