MSPs Must Prepare in Case AWS Managed Services Targets SMBs

MSPAlliance’s Charles Weaver advised solution providers to beware of over-reliance on white labeling, and to explore opportunities in private and hybrid cloud.

Aldrin Brown, Editor-in-Chief

December 19, 2016

2 Min Read
MSPs Must Prepare in Case AWS Managed Services Targets SMBs

The entry of Amazon into managed services is a logical business development that could evolve into a play for managing the IT infrastructure of not just large enterprises, but organizations of all sizes.

Those were among the thoughts of Charles Weaver, CEO of MSPAlliance, a coalition of technology services providers.

Last week’s launch of AWS Managed Services, aimed at enterprise-grade users of AWS public cloud, might represent the first in a series of falling dominos that could ultimately lead to eroding public cloud revenue for MSPs.

Charles Weaver, CEO of MSPAlliance

“This changes things,” Weaver said. “What I think every MSP has to ask themselves is, what if Amazon continues to expand this managed services program down into midmarket; small and medium businesses?”

Amazon’s move into managed services – and the potential that its key public cloud competitors, like Microsoft, Google and IBM could soon follow – is not completely unexpected, Weaver said.

“Not only am I not surprised, I expected it,” he said. “This is the behavior of the vast majority of hardware and software vendors throughout the channel for the last 10, maybe 15 years.”

“They have been steadily moving into managed services, literally offering managed services, and telling partners ‘you don’t have to do this, just resell ours,’” Weaver explained. “(MSPs) are resellers again.”

He cautioned that his comments are not intended as anti-vendor or anti-channel, and that he doesn’t discourage vendors from making sound business decision, just because they might be disruptive to MSPs.

“I don’t mind them doing it,” Weaver said, adding that tech services providers just need to understand the implications of their partnerships. “I think that gets to the mentality that (some) vendors have that managed services providers don’t really add value.”

He offered two thoughts on how MSPs should respond to the new potential threat.

First, recognize the vulnerability of a practice that disproportionately relies on white labeling or reselling the offerings of other vendors.

“My advice to MSPs is if they look at giving up – through a strategic relationship – a part of their managed services to another third party…it begs every MSP who partners with that company to ask, what is my risk?” Weaver said. “They (could) be partnering with a direct competitor.”

Additionally, MSPs should look to opportunities in private and hybrid cloud, marketing against the growing trend of public cloud cyberattacks.

“Public cloud is under assault globally,” Weaver said, citing recently publicized attacks against Yahoo!, and U.S. nuclear installations. “I think it’s undeniable that private or hybrid (cloud) computing is making a big comeback, or at least is presenting itself as a very compelling alternative to public cloud.” 

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About the Author(s)

Aldrin Brown

Editor-in-Chief, Penton

Veteran journalist Aldrin Brown comes to Penton Technology from Empire Digital Strategies, a business-to-business consulting firm that he founded that provides e-commerce, content and social media solutions to businesses, nonprofits and other organizations seeking to create or grow their digital presence.

Previously, Brown served as the Desert Bureau Chief for City News Service in Southern California and Regional Editor for Patch, AOL's network of local news sites. At Patch, he managed a staff of journalists and more than 30 hyper-local and business news and information websites throughout California. In addition to his work in technology and business, Brown was the city editor for The Sun, a daily newspaper based in San Bernardino, CA; the college sports editor at The Tennessean, Nashville, TN; and an investigative reporter at the Orange County Register, Santa Ana, CA.


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