By Dell Guest Blog

Managed services providers are beating a path to the cloud, and it’s easy to see why.

The U.S. small-and-medium business (SMB) market, a mainstay for many MSPs, spent $24 billion on cloud services in 2013, according to Parallels’ SMB Cloud Insights Report. Infrastructure-as-a-service, the largest portion of that market, is projected to see double-digit growth through 2017.

The market is vast, but MSPs face a choice: Do they build their own cloud capability or partner with a cloud services provider? The build option involves capital expense and ongoing operating costs. The partnering model, however, brings up issues of control, branding and service differentiation.

Randy Steinle, vice president of Onsupport Corp., an Austin, Texas-based MSP, believes his company has found a way to address both sets of concerns. Onsupport recently began working with Dell’s CloudRunner Service Provider Platform. CloudRunner provides a turnkey solution that lets MSPs offer their customers hosted business applications, end-user management, technical support and monthly service billing. The platform includes a marketplace of more than 600 applications, which MSPs can deliver to any securely managed device.

Cost Savings

Steinle said CloudRunner helps his company avoid the cost of rolling out and maintaining a new cloud service.

“We don’t have to go buy the servers and do the patching and updates on the infrastructure side,” he said. “We don’t have to put out the capital upfront.”

Steinle is well-acquainted with data center costs: Onsupport, in business for 22 years, provides hosting services as one of its core offerings. The company, for example, markets hosted virtual IT environments to its small-business customers. CloudRunner, however, will probably replace that traditional line of business, Steinle noted.

Customization Is Key

While CloudRunner affords Onsupport a lower-cost option for offering cloud services, it also gives the MSP more room to customize its services. Steinle said the Dell platform lets him create custom solutions for clients as well as custom pricing.

For example, customers won’t typically want to employ all of the 600-plus applications available through CloudRunner, Steinle noted. But Onsupport is able to package a subset of those applications–perhaps a bundle of 20 applications that most of the MSP’s SMB customers use.

“We will put that in a package that people can access,” Steinle said.

As for pricing, Onsupport has the flexibility to put its own price tag on a cloud services package or make a special offer–a 10 percent discount on new orders received in the next 90 days, for instance.

“CloudRunner gives us the control to be able to do that,” Steinle said.

In addition, Dell offers CloudRunner to MSPs as a white-label solution, so Onsupport can market the cloud service under its own brand. This enables Onsupport to sell CloudRunner solutions, while maintaining its company identity and not getting lost in the crowd of VARs.

“It gives us a ton of value and allows us to do something specific to Onsupport, without having to reinvent the wheel,” Steinle said.

In general, Steinle appreciates the ability to maintain 100 percent ownership of his customers, while driving higher recurring margin on popular productivity apps such as Office 365. Steinle said CloudRunner helps his company keep the cost of service delivery in check.

“It is almost impossible for us not to increase profit margin,” he said.

Customer Benefits

Onsupport’s customers stand to benefit from CloudRunner, as well. The cloud solution eliminates the headaches of day-to-day technology oversight, improves workplace mobility, and offers secure anytime access to applications from any device. Other customer advantages include low total cost of ownership, enterprise-class infrastructure and license aggregation from a single provider.

Steinle said some small businesses claim they can perform the same services internally that Onsupport and CloudRunner seek to provide. But in-house IT management takes those companies away from what they do best. In contrast, companies that leverage CloudRunner can focus on their core businesses. 

Guest blogs such as this one are published monthly and are part of MSPmentor’s annual platinum sponsorship.