The MSP Private Cloud Opportunity

By Pedro Pereira 1

More than 70 percent of companies have implemented private cloud solutions, and 71 percent of them report easier application management as a result, according to new research from Aberdeen Group. Private clouds also have reduced IT complexity for 46 percent of business and accelerated application deployment for 45 percent of them.

Yet, Aberdeen finds, some companies remain skeptical of private clouds, fearing increased costs and complexity. But those businesses, Aberdeen warns in its July 2015 report, “A Simple Path to Private Cloud,” are bound to continue paying too much for application deployment and administration. And that limits their ability to innovate and leverage future technology advances.

Aberdeen posits that fears over complexity and cost are misplaced. Businesses instead should endeavor to assess and understand their critical application needs, and work with a cloud services provider to fulfill those needs.

“Rather than going it alone when deploying enterprise applications, leading organizations turn to cloud and service providers to simplify the use and implementation of those critical cloud-based systems.” Aberdeen found through its research that top-performing businesses “are 60 percent more likely to leverage third-party private cloud providers to run their business-critical applications.”

Clearly, this presents an opportunity for MSPs that already have a cloud services practice or are considering launching one.

Because it is their job to closely monitor their customers’ IT environments, MSPs are more familiar with customers’ IT needs than anyone—even the customers themselves in many cases. As such, they are perfectly positioned to work with businesses to assess whether a private cloud would work for them.

Address Customer Fears

MSPs should address customer fears by explaining how private clouds help reduce resource usage and rein in virtual server sprawl. Unplanned virtual server expansion is a problem that mirrors the physical server sprawl that virtualization aimed to solve. As IT needs expand, business groups fire up new virtual server instances, and if that happens enough times, IT eventually starts to lose track of all those virtual servers.

Interestingly, much of the fear regarding private cloud deployments has carried over from the days of server virtualization, when businesses were reluctant to move critical systems such as ERP, CRM and core databases to a virtual environment, said Jim Rapoza, senior research analyst and editorial director, Information Technology, at Aberdeen.

“Businesses think that they won’t be as reliable or perform as well (in a private cloud), or they think that if something bad does happen, they’ll get more blame for putting the app on a private cloud than they would if it was on a traditional server infrastructure,” Rapoza said.

“But all research and testing has shown that private cloud and virtualization can perform just as well, if not better, than traditional bare iron implementations—and they are more reliable and resistant to downtime.”

Monetize Services

MSPs that invest in private clouds, Rapoza said, stand to improve their ability to monetize services and resources. “Just as big public cloud providers can track and charge for all cloud resources used, a private cloud makes it possible to understand how applications and services are used and properly charge for these resources,” he said.

Of course, not every MSP today is ready to invest in delivering private cloud solutions. A merger or a partnership with a private cloud provider may be in order if you lack the capital to make the investment.

Regardless of how or if you choose to address the private cloud opportunity, one thing is certain: MSPs cannot sit out the cloud. Looking into the future, Rapoza predicts businesses will either move 100 percent of their IT to the cloud or leverage some form of hybrid or private cloud environment. Whichever way they go, those businesses will need service providers to help manage their cloud investments.

Pedro Pereira is Massachusetts-based freelance writer with two decades of experience covering and analyzing the IT channel and technology. He can be reached at [email protected].