The Doyle Report: Cloud Technology: Friend or Foe?
What is cloud computing? An app? A service? A platform?
These questions and more took center stage at the CompTIA Annual Membership Meeting (AMM) underway this week in Chicago. At the industry gathering of MSPs and other channel practitioners, industry representatives challenged fellow compatriots to step up their game and consider managed services and cloud computing services as complementary business models, not competitive.
Dan Wensley, president and channel chief at Passportal, says current industry talk on cloud computing reminds him of discussions that centered on managed services one decade ago. Then industry practitioners argued endlessly about business models and vendor strategies at the expense of customer wants and needs.
“Customers didn't want to buy managed services then and they don’t want to buy ‘cloud computing’ today. They only want a solution to a business problem. Instead of technology underpinnings, they only care about whether they pay for it with OpEx or CapEx funds,” says Wensley.
The distinction is tripping up too many MSPs today, say industry experts. Take John Rice, partner development manager at Intermedia and longtime CompTIA supporter. Rice contends that too many MSPs are selling cloud computing solutions as add-on, point solutions instead of core deliverables, he says. “These should be integrated offerings,” Rice says, “not resale complements that MSPs don’t actually manage.”
Rice, a CompTIA member for more than two decades, joined forces this week with Kirk Bohn, cloud services enablement leader at Arrow, to present findings of a recent study on cloud computing and MSPs. Their key takeaway: cloud computing is more of an opportunity than a threat if MSPs embrace technology and economic models properly.
“With the cloud, MSPs and other solution providers have an unprecedented opportunity to impact the businesses of not only their customers, but the customers of their customers downstream,” says Rice.
In addition to this, Rice and Bohn also shared some other findings from the study, including:
- 38 percent of end users are using cloud technology for non-critical applications
- 50,000 customers a month are signing up for Office 365
- Unified Communications (UC) and Hosted PBX (HPBX) are among the fastest growing cloud markets
As they presented their information, Rice and Bohn were challenged by some of their peers on their conclusions. One finding, in particular, upset some MSPs: cloud computing requires more customers than a typical transaction business. “You cannot survive in the cloud world with just 50-100 customers. The cloud business model requires you to sell to more entities,” says Rice and Bohn.
But some MSPs pushed back, saying that they do not have the resources nor the efficiencies to support more customers. Instead, they aimed to collect the same revenue per user from on-premise customers and they do cloud computing customers. To overcome these and other challenges, Bohn suggested the following:
- Get more efficient by using professional management tools and asking what things you could outsource to take cost out of your business
- Identify entry points into new cloud services such as HPBX, security and compliance
- Market more effectively
- Embrace applications development as a core strength
- Explore and expand new and emerging cloud ecosystems