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Managed Service Provider Business Forecast: Partly Cloudy

Managed Service Provider Business Forecast: Partly Cloudy

The IT forecast for coming years calls for a thick cloud cover, and that’s a good thing as long as we’re not talking about the economy. IT solution providers understand that cloud computing must lower the total cost of ownership of technology while allowing clients to forego big, upfront investments on hardware and software if it is to grab hold. Do you see the cloud as a threat or an opportunity? Is the cloud value proposition getting through to clients? You would hate to have the answer be, “yes they get it” as they leave your client base and move to a competitor. Will that competitor be Microsoft or Google or will it be the mid-market players that see a huge market potential in front of them? Here's where I see IT solutions providers heading next.

We’ve already seen the major industry players responding to this market opportunity because it is both a threat and an opportunity to their existing markets. Microsoft is investing massively to move to a Cloud Computing model because of the volume of licenses they stand to lose. They are actually cannibalizing themselves before someone else does. The speed at which this will brought to market is accelerating and we’re in for a seismic shift. We know how the large players are responding. It’s not a question of whether you will respond but more likely HOW MUST YOU RESPOND to remain relevant.

Rise of Hybrid Clouds

As was the case with managed services, IT solution providers need to learn how to sell the benefits of cloud computing. But there are many flavors of Cloud Computing and no one-size-fits-all solution. Can you shape your clients “cloud expectations” so that they are aligned with what you have to offer? Do you have a well-rounded offering that is flexible and scalable so that you can truly provide utility computing? There is no cookie-cutter approach so it’s important that you audit your client’s business before making promises of what you can and can’t do. You also need to allay client fears and win their trust by making a compelling business case around the improvements in availability, scalability, security and cost-effectiveness that your cloud computing solution can deliver. That’s why it’s important to offer “hybrid” clouds.

Though the cloud is gaining popularity, many business owners remain skeptical of the approach. They don’t want to give up control over IT assets and they are concerned about security. Business owners also worry about letting solution providers manage their data and whether the data will be easily accessible and recoverable after downtime situations. But we see this changing. You must be poised to seize the opportunities as they arise.

Sorting Through Your Options

With that in mind, solution providers must become adept at selling the following cloud benefits:

Cost-effectiveness: Show clients how paying a monthly fee of hundreds or thousands of dollars is preferable to large upfront investments in on-premise software and hardware. Point out that updated or new technology that a business would have to put off or forgo altogether for budgetary reasons is now within reach, and at a lower cost.

Pay as you go: A dirty little secret of IT is that organizations tend to buy far more processing power than they need. Server utilization is as low as 10 percent, according to some IT analysts. Ideally, with cloud services, you use and pay for only the computing power you need, when you need it. Businesses can increase per-user subscriptions to accommodate growing computing requirements. On the flip side, a business can turn off a service or reduce the subscription according to the number of users.

Security: Contrary to what clients might believe security in a cloud is at least as good or better than keeping your data local. With the right solution, you can deliver patches and updates much more quickly and simultaneously to multiple machines that reside on that Cloud infrastructure. And because you only have to do the work once, as opposed to numerous times in different locations, the chance for error is reduced considerably. Manual processes are virtually eliminated and costs are reduced.

Availability: One of the issues businesses face is the availability of their mission-critical applications. If an on-premise application fails, it may take hours or days for a technician to get it back up. That problem is addressed much more effectively if the Cloud infrastructure has fault tolerance and redundancy built in. Additionally, cloud-based applications should be monitored and managed remotely to guarantee business continuity and high availability.

Access to data: After a catastrophic event, it is imperative that businesses get up and running again and recover their data. Through the cloud, the recovery process is greatly reduced, allowing businesses to resume operations far more quickly than if they had to rely on tape or disk backups that can take many hours to restore data. Disks and tapes also can get lost, and there have been plenty of cases in which the data wasn’t recoverable when needed because it had become corrupted unbeknownst to the business.

Our Approach

Zenith Infotech has launched a cloud-based service. SmartStyle Computing is a private cloud solution, which replaces conventional hardware and infrastructure with virtual desktops, servers and networking for an affordable monthly fee. SmartStyle enables service providers to deliver IT as a Service (ITaaS) by shrinking the delivery stack into a single, highly available, scalable solution. VARs can get started – starting with a small cloud solution for one or two servers to ease clients into the idea and then growing the cloud (and the VAR’s imprint) as the client’s needs increase.

Low cost of entry, state of the art technology, scalable, fault tolerant and redundant are at the heart of this offering, and as such, it gives solution providers a powerful solution in persuading their clients to embrace the cloud. Any seismic shift resets the technology clock. SmartStyle will give a startup technology provider or a well established VAR the ability to ride the Cloud wave by delivering exceptional value.

Next Steps

Care to share some thoughts? The comment area below is wide open for your perspectives. Want to learn more about Zenith? Please visit SmartStyle Computing web page or email [email protected] for more information.

Zenith Infotech’s Maurice SaluanMaurice Saluan is VP-Channel Management for Zenith Infotech as well as seasoned sales veteran in the managed service arena. Guest blog entries such as this one are contributed on a monthly basis as part of MSPmentor's 2010 Platinum sponsorship. Find all of Saluan’s blog entries here.


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