Can Small MSP Battle Big Cloud Services Providers?
Craig Guice quietly declared war in the cloud computing market yesterday. His managed services company, outsourceIT, merged with a cloud services provider (CSP) called GoBeyondIT. The resulting 70 person company is making a run at hosted desktops and VDI (virtual desktop integration) opportunities across SMB and enterprise accounts on the U.S. East Coast. It sort of makes me wonder: Can outsourceIT — at 70 people — really carve a niche for itself against emerging cloud computing companies?
This isn’t your typical MSP vs. cloud giant story. Guice’s team and his new partners at GoBeyondIT have thrown in a twist. In addition to running outsourceIT as a managed services provider, they will likely run GoBeyondIT as a cloud services provider that builds its own channel partner program for VARs and resellers.
At more than $15 million in annual revenues, outsourceIT is a sizable managed services provider. Most people don’t know it but I suspect the majority of MSPs generate $5 million or less in annual revenues.
Still, outsourceIT is relatively small compared to Rackspace, Savvis, Terremark and other cloud computing companies that see potential VDI opportunities ahead. Even Best Buy has a strong VDI play, having just acquired mindSHIFT — which generates roughly $100 million (perhaps more…) in annual revenues.
Digging In for the Long Haul
Nevertheless, I find myself rooting for Guice and small MSPs who are building up their businesses rather than selling out to larger rivals. It sounds like outsourceIT attracted a potential suitor several months ago. But when the deal didn’t come together, Guice decided to double down on the cloud services market rather than plan his personal exit.
The result: outsourceIT and GoBeyondIT are making a run at the cloud services market. And Guice is hinting that outsourceIT may buy two more companies. It’s going to be a heck of a journey…