MSPmentor Blog

Considering the Cloud? Find Your Sweet Spot, CA Advises

Managed service providers considering a shift into cloud services are faced with a number of considerations: What should I offer? How much do I need to lay out in infrastructure costs? How can I get the word out? Each of those three questions demand answers that, if incorrect, could severely impact an MSP’s success.

In his conversations with MSPs contemplating the cloud, Michael Marks, senior advisor, Business Development at CA said answers tho those three questions have stymied even the most established MSPs. But deconstructing each element can make the process simpler for MSPs to enter the cloud space in a relevant, effective way.

Marks offers deeper details in this FastChat Video:

“When it comes to services, it’s really the four C’s -- customer base, competition, core competency and your current service offering,” Marks said. “We see a lot of MSPs starting off with infrastructure as a service, because it’s easy to do and high-growth, but you have to worry about competing with Amazon Web Services. Others are getting into software as a service because it’s the bulk of the cloud market, but again there are big players there like Microsoft and Google and” CA’s most successful MSP customers, he said, are taking SaaS “sweet spot” strategies, focusing on particular applications that are unique to the vertical markets within their core competency. Good examples, Marks noted, include geospatial software, gaming or web conferencing.

Financially, building out the necessary infrastructure to support a cloud services play can be challenging, if not bank-breaking. And, Marks said, a number of MSPs don’t take that into consideration when jumping in to the cloud. “[MSPs] need to consider both hard costs and opportunity costs. The hard costs are largely driven by your choice of cloud platform ... your data center power and space costs will largely be driven by your choice of hardware, and your operational and software costs are driven by the complexity of the underlying cloud platform.”

Opportunity costs, he said, depend largely on the time to market for both the initial service launch and in rolling out additional new services to your customer base. “The longer the implementation time, the higher those costs,” he said.

CA’s AppLogic cloud computing platform, however, addresses both the hard costs and the opportunity costs, Marks noted. Because it is was built to run on commodity, x86-based servers, it reduces the cost associated with many “big iron” cloud platforms. Plus, it was designed to get MSPs up and running within 90 days. “And we’ve seen some MSP customers reduce the time required to roll out additional services by up to 90 percent,” he said.

But what of marketing? “Cloud is new for everyone, so there is a learning curve in marketing and selling,” Marks said. “We say MSPs should expect help from their vendors in marketing and selling the services that are being launched on that cloud platform.”

That’s the approach CA is taking with its Cloud Market Acceleration Program for service providers, which Marks said covers everything from pricing, packaging and marketing to sales enablement, awareness and lead generation assets. “In addition, you’ve got to have a vehicle for selling your cloud service, whether it’s your existing customer portal or it’s a cloud store,” and CA is also covering that mark with its recently launched Cloud Commons marketplace, aimed at CA’s ecosystem of ISV developers, MSP customers and their customers to develop, market and sell AppLogic-based services.

CA’s comprehensive portfolio is gaining speed in the marketplace as more MSPs discover the opportunities offered by the cloud. “We are seeing a lot of success,” he said.

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