Is your MSP ready to make cloud computing a profitable part of your business? That’s the question Jim Lippie has been asking managed service providers for the last year. It was almost a year ago that Lippie launched consulting firm Clarity Channel Advisors with a mission of helping MSPs transition to a profitable cloud-first strategy.
So we wanted to catch up with Lippie and ask him about the state of the cloud and how MSPs are dealing with the shift.
But first a little background. As many of our readers know, Lippie is a veteran of this space having built Thrive Networks and selling it to Staples, and then serving as an executive at Independence IT. Lippie is also a longtime friend of MSPmentor, Talkin’ Cloud and The VAR Guy and has been one of our Idea Xchange Xperts, sharing his thoughts on what he calls the Channel Eclipse and other disruptions in our IT services market. Basically, he really is an expert on managed services and the cloud.
In the year since it launched, Clarity Channel Advisors has developed a thriving consulting practice to help MSPs profit from the cloud, developed a an Advisory Group with 48 members, and launched a tool called the Cloud Clarity Score that has been used over 5,000 times by MSPs from around the world. The company is about to launch another new tool that will allow MSPs to deliver business analytics-as-a-service to customers, further pushing MSP services up the value chain with clients.
MSPs and the state of the cloud
So what does Lippie think about the state of MSPs and the cloud today? We started out by asking him what he thought was the biggest mistake made by MSPs in their approach to the cloud.
“They think of it as the enemy. They don’t embrace it,” Lippie told me. “When they think of the cloud, they think Office 365, Google Apps, File Sync and Share.”
These software-as-a-service (SaaS) offerings are hosted and branded by vendors and resold by MSPs, but will never be big money makers for MSPs. Yet MSPs must offer these services or risk their customers going elsewhere to buy them. So what’s the way to profitable cloud-first services?
The real opportunity
Lippie says MSPs need to also host and bundle third-party apps as part of their portfolio of services offered to customers.
“Ultimately, they need to define what their cloud strategy is. It can’t just be selling Google Apps or Office 365,” he told me. “They have to focus on hosting their clients’ third-party business applications. Not every one of their clients will be a candidate for this, but most of them will be.”
Such applications include those designed for specific vertical markets, for instance the software that law firms use to account for hours and run their businesses. There’s an application specific to catering businesses, Lippie said. And CRM programs are also great fits for this kind of hosted offering.
So how close are MSPs to adopting this model?
Lippie told me he believes that MSPs are still in the beginning stages. He is currently working with about 60 MSPs who are on board with this strategy. And he said he believes that about 35 percent of MSPs in the U.S. market are actively thinking about what they should be doing in this area and how they can be hosting third party applications.
IaaS, DaaS making it easier
What makes this possible today is that MSPs no longer have to invest in the equipment and infrastructure needed for their own data centers and their own clouds. There are many providers out there already that MSPs can build services on top of, including desktop-as-a-service provider companies such as Independence IT and infrastructure-as-a-service providers such as Amazon Web Services (AWS). MSPs can pay as they go and charge their customers as they go.
So what about Lippie’s analytics-as-a-service offering? This is one of the new services that Lippie believes will add to the value that MSPs can offer their customers.
MSPmentor will have more coverage of this announcement in the weeks ahead. This blogger is pretty sure that you can expect an announcement by the end of September, and we’ll be covering it here at MSPmentor, so stay tuned.