Cisco Converges Managed & Cloud Services: Are MSPs, CSPs Identical?

Cisco Systems(NASDAQ: CSCO) has merged its Managed Services Channel Program and its Cloud Provider and Cloud Services Reseller designations into a new program, the Cloud and Managed Services Program (CMSP). Smart move by Cisco, but I still see clear differences between the MSP (managed services provider) and CSP (cloud services provider) business models. Call them close cousins or step brothers. Here’s why.

Generally speaking, I think the vast majority of MSPs still get involved in (A) some sort of IT product reselling and/or (B) IT projects. Once the hardware and related applications are deployed (typically on premises), the MSP charges a monthly fee to proactively manage the deployed systems. Increasingly, I’m hearing from MSPs that focus on per-user monthly pricing rather than per-device pricing.

On the flip side, I think most CSPs avoid product reselling or do it only for very targeted opportunities. An example: Cloud Sherpas, a Top 100 Cloud Services Provider, focuses on Google Apps and Salesforce.com consulting engagements. But as part of that work, Cloud Sherpas also offers customers Google Chromebooks — cloud-based notebooks that run Chrome OS and Web-based apps.

The bigger story here: Can vendors like Cisco offer a single partner program that effectively supports MSPs and CSPs? I think the answer is yes. And obviously, Cisco has come to the same conclusion. Generally, speaking, MSP and CSP partner programs are all about monthly pricing models (OpEx) rather than one-time product payments (CapEx). So while MSPs and CSPs may deliver vastly different services, they consume technology in strikingly similar manners.

Of course I’m painting with broad strokes here. There are certainly IT service providers that blend managed and cloud services. And example would involve an MSP that manages on premises devices, while also extending cloud email, cloud storage and more out to those devices. But for the most part, I think small MSPs are plugging into third-party clouds, while a growing number of CSPs have built their own cloud services within (A) their own data centers or (B) on top of public clouds like Amazon Web Services, Rackspace Cloud and the like.

Are MSPs and CSPs identical twins? I prefer to think of them as close cousins or step brothers.