How MSPs Paved the Way for Cloud Computing

How MSPs Paved the Way for Cloud Computing

I'm starting to believe the cloud computing market will face less resistance than the early managed services market faced. Why's that? And what will the cloud computing trend mean to MSPs? Here are some updated educated guesses.

First, let's look at some basic history. Generally speaking, I think small software companies -- mostly sub $50 million organizations -- deserve big-time credit for helping to spark and shape the managed services market. From PSA (professional services automation) providers to RMM (remote monitoring and management) specialists, the vendor community and the education community (MSPAlliance, MSP University, CompTIA, etc.) have worked to help transform thousands of resellers into MSPs.

No doubt, the managed services market continues to accelerate. From giants like Cisco Systems to upstarts like Sophos, many technology companies have overhauled their partner programs to embrace MSPs. Here at MSPmentor, our own traffic is up 54 percent in 2010 vs. 2009 (January to September, year over year), so interest in the market continues to grow. (Thanks so much for your readership.)

Managed Services vs. Cloud: Bottom Up vs. Top Down

But here's the twist. Initially, managed services was a bottom-up trend, where small vendors, small MSPs and targeted associations have worked tirelessly to build the market and educate end-customers. In stark contrast, cloud computing and cloud services are top-down trends.

Some reasons why:
  1. Consumerization of IT: Millions of consumers are familiar with Google Apps. Millions more understand, NetSuite and consumer email systems. CIOs have seen and heard the trend. And they are responding with public or private pilots or deployments.
  2. Virtualization of IT: Admittedly, virtualization and cloud computing are not the same. But they are close cousins. And customers that invest in virutalization are prime targets for a broader shift to the cloud.
  3. High-Tech Responds: The entire Microsoft Worldwide Partner Conference (WPC10) was organized this year to focus entirely on the cloud. Meanwhile, Cisco has adjusted its Worldwide Partner Organization (WPO) to focus on emerging opportunities like cloud computing.
Simply put: All of IT's giants have something to say about cloud computing. And a healthy number of CIOs are listening.

MSPs Will Be the Early Victors

As I've explained previously, MSPs will be among the first channel players to profit from the cloud. MSPs already understand recurring revenue models. They blazed the trail for off-site, predictable-cost IT services.

But in the early year of managed services, MSPs had to spend all of their time explaining the managed services model to end customers. Fast forward to the current cloud computing wave, and I suspect MSPs are meeting with customers who understand early cloud trends involving hosted Exchange, hosted SharePoint and more.

First Pain. Then Profits

Just be careful of the hype. Gartner says Cloud Computing recently reached the top of the hype cycle. What's next: The so-called trough of disillusionment, where cloud computing doesn't fulfill expectations for some customers. Over the next few months, we'll see more cloud computing horror stories surface. Microsoft's recent BPOS (Business Productivity Online Suite) outages represents one prime example. More outages are coming. Security breaches will surface, too.

But don't press the panic button. You've already spent hundreds -- or thousands -- of hours selling the managed services model to your customers. Thanks to all of your hard work -- and the loud noise from big vendors -- the cloud computing pitch will be even easier.

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