SMB Cloud Hosting Trends Benefit MSPs

SMB Cloud Hosting Trends Benefit MSPs

SMBs are heavily investing in both cloud technology in general and hosted cloud services in particular, with MSPs poised to reap advantages in several ways. According to a new report from AMI Partners, US SMBs with fewer than 1,000 employees will invest $34 billion in cloud services (including IaaS, SaaS, web hosting, UC and remotely managed IT services) this year, with almost half that investment (46 percent) going toward hosting companies.

AMI Partners' research indicates that two areas where these firms see clear benefits and are aggressively moving to the cloud -- hosted infrastructure, such as servers and storage, and remote management of IT systems and related applications. SMBs have very limited, if any, internal staff dedicated to managing technology, so deploying these solutions in the cloud with the support of a trusted provider, rather than with existing internal support resources, is quickly becoming the norm.

However, SMBs are not simply signing up with the first hosted cloud service provider they find, nor are they willing to put up with second-rate service. According to the AMI study, nearly a third of SMBs said they would quickly switch their cloud service provider if desired service levels are not met.

MSP Option 1 – Partner with a Hosting Company

MSPs have a couple of options for responding to and taking advantage of the rapidly growing SMB need for hosted cloud services. One is to partner with a larger, established cloud services provider to help them scale their services for the SMB marketplace. AMI Partners says that for more advanced cloud deployment and migration needs, hosting companies that have in many cases already provided SMB clients with basic Web and email services are actively courting downstream channel partners such as MSPs and ISVs, who can provide additional value-added services to SMBs.

There is certainly nothing wrong with serving as an SMB channel partner to help a hosted cloud services provider ensure the specific needs of SMB clients are met. Many MSPs are very familiar with this type of relationship and may be able to easily expand existing partnerships to include providing assistance with delivering cloud services. But one other option is worth considering, as well.

MSP Option 2 – Compete with Hosting Companies

Nothing specifically stands in the way of MSPs with expertise in cloud service delivery and the SMB marketplace from directly competing with larger cloud services providers. What MSPs lack in size and in some cases price flexibility, they can make up for with factors including scalability, customer service, and a generally superior understanding of SMB business goals and objectives. The direct competition route in this area is best left to those MSPs that already have a high degree of experience providing cloud services to SMBs. And if you lack that experience, serving as an SMB channel partner for a year or two is a great way to develop it.
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