Can MSPs Become Cloud Services Providers?

November 16, 2011

3 Min Read
Can MSPs Become Cloud Services Providers?

By samdizzy


It’s a new chapter in an old story. First, some resellers became VARs. Then some VARs became managed services providers (MSPs). Now, a group of consulting firms and software companies (players like ChannelCloud, Level Cloud, PointClickWork and OS33) are striving to help MSPs become cloud services providers (CSPs) and cloud integrators. The trend was front-and-center at IT Nation, a conference hosted by ConnectWise last week in  Orlando, Fla.

But is the MSP-to-CSP transformation real? Admittedly, thousands of VARs and MSPs are trying to figure out if they should:

  • (A) build their own home-grown cloud services,

  • (B) partner up to reseller third-party cloud services

  • (C) or perhaps do both A and B.

Generally speaking, I think MSPs are in reasonably good position to succeed as CSPs because the underlying business model — recurring revenues with associated sales compensation plans — are quite similar to one another. But I doubt all MSPs will take on the “CSP” moniker. Instead, many MSPs seem to be adding cloud services to their broader portfolio of services.

Still, the cloud industry can be overwhelming. Nearly every software company now pitches a cloud strategy to channel partners. I’m particular interested in the upstart players because they have no legacy to protect. Instead, some upstarts are building platforms from scratch that are designed for the cloud from Day One.


OS33, which makes a Webtop platform, is a particularly interesting company. Some MSPs are leveraging OS33 directly, as a means to provision SaaS applications and VDI (virtual desktop infrastructure) for customers. In other cases, MSPs are partnering up to gain access to OS33’s software. For instance, I believe both Level Cloud and PointClickWork have been building out their cloud offerings for MSPs, leveraging OS33 as the underlying platform.

I saw an OS33 demo about a month ago at the company’s headquarters in Brooklyn, N.Y. All of the SaaS applications, including complete Widows desktop suites, appeared to be running locally but the software was actually running in a Texas data center. Impressive — though I realize demos are designed to be impressive.


Meanwhile, ChannelCloud continued to generate a buzz at IT Nation. CEO Kent Ericson is a familiar name in MSP circles. The ChannelCloud team has previously built Pointivity, a successful MSP. For more than a year now, ChannelCloud has been calling on MSPs to become cloud integrators. Ericson and I played email and phone tag last week but didn’t connect.

I’m still hoping to catch up with the ChannelCloud team. I’m very curious to learn how many MSPs they’ve onboarded so far, especially since ChannelCloud seemed to be so far ahead of the cloud curve when the company first started briefing me about a year or two ago.

Beyond the Basics

Yes, fast-moving MSPs have already partnered up to offer cloud storage, cloud security and other widely available services to end-customers. But when we cover OS33 and ChannelCloud, the conversation shifts quite a bit to more sophisticated cloud tasks like end-user provisioning for all major SaaS applications.

This story, it seems, has just started.

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