3 CSP Survival Tips for the Everything-as-a-Service Age

Mariah West

By Mariah West, Director of Global Marketing, Zerto

Bain & Company expects SaaS subscriptions to grow 18 percent by 2020, and since SaaS handily beats IaaS and PaaS for cloud spend, that’s a significant number. Investments in PaaS are expected to increase by 56 percent in 2019, according to KPMG. And Gartner predicts the IaaS market will reach $72.4 billion worldwide by 2020.

Goldman Sachs just released a survey of CIOs that indicates 18 percent of workloads are now running in the public cloud; that number should increase to 34 percent in three years.

Given this level of cloud momentum, many MSPs are finding themselves at a major fork in the road. Do they transition their businesses to a CSP model or do they partner with or acquire a CSP?

Fortunately, the choices aren’t quite so extreme.

The skills that made you successful should enable you to remain competitive. Cloud is complex. Confusions around lock-in, data governance, unplanned downtime, privacy and security, plus a plethora of provider choices, will keep partner expertise in demand. Last year, RightScale’s State of the Cloud Survey reported that a business using the cloud would access at least six different clouds from multiple vendors and run a blend of private and public clouds. The future is likely multicloud, and you certainly have customers in desperate need of direction.

Partners are by nature customer-first consultants who build technology solutions to support business operations. While you might deliver a SaaS-based product or a cloud service, this doesn’t make you a cloud provider.

CSPs generally have data centers that host, run or replicate data and applications. Probably the most pronounced difference between a typical partner and a CSP is that one is in the business of hosting applications, maintaining servers and storage, and provisioning out services to clients. The other is not. And that’s OK.

Customers are asking how to get to cloud. Equip yourself to answer these questions. How?

• Add value where there’s concern. Security, compliance, business continuity and uptime are examples of cloud concerns that you can ease by offering leadership and expertise on multiple cloud platforms. When partnering with CSPs that offer specialized services, carefully evaluate the stability of their offerings, the flexibility of their contracts, the location of their data centers and their reseller programs. See if it’s possible to white label their offerings; that might also include the ability to build a custom portal for the customer under your brand. For customers who are used to managing their own infrastructures, this can make a huge difference in their cloud comfort level.
• If you’re agile, managed and public cloud is not the enemy. Customers can pull out a corporate card and try new technologies without ever consulting you. Get over it. Many times I’ve heard MSPs cite this or that cloud provider as a competitor. With that mindset, they’re out of luck when their customers dip their toes in cloud and you have neither insights nor competitive options.
• Agile partners help their customers experiment with cloud. An adviser who knows the pros and cons of a major public cloud service versus a regional managed cloud service provider can help protect a customer from over- or under-committing.
• Embrace the subscription license. Finally, what might be the most challenging area is the way you sell and manage accounts. Partners with VAR backgrounds often focus on one-time sales. They operate like hunters who bag their big game and then return home until the next hunt. But selling in the CSP space is more like farming. You must learn to work with short- and long-term subscription licenses, where crops yield financial rewards throughout the term.

The subscription license approach requires sales reps to communicate a different value proposition to customers who may be looking to transition from a capex to an opex model. By keeping these three steps in mind, MSPs can grab a sizeable piece of the CSP market without restructuring.

Mariah West is director of global partner marketing at Zerto.