How not to get stuck in the cloud

Michelle DeFiore

Yesterday we sponsored a webinar about how to make money in the cloud with MSPAlliance CEO and co-founder Charles Weaver, featuring our CTO Antonio Piraino and two of our esteemed service provider customers: Ken Ziegler, president and COO at Logicworks, and Kevin Detsch, vice president of business development at ePlus.

MSPNews.com, which has published an article about the webcast here, summarized it nicely: “One of the most important elements for today’s service providers seeking to take their offerings to the next level, is to do away with traditional constraints and find new ways to introduce and manage their services, as well as monetize them.”

With that framework in mind, here are a few of the key points/takeaways:

    • The audience was polled at the beginning about whether or not they plan to offer cloud services in 2012: 51% said they already offer cloud services, 22% are planning to in 2012, 15% were not sure, and 11% said no.
    • Antonio said that many service providers have embarked on “Phase 1” of cloud computing with virtualization and some automation, and perhaps an infrastructure-as-a-service (IaaS) offering and one or two applications such as e-mail thrown in. The challenge is migrating to “Phase 2.” Many MSPs are stuck with legacy investments and cannot justify new ones due to the day-to-day challenges of maintaining their current offerings and service levels. Budget is always an issue, and another one is that MSPs just don’t know where to start.
    • There are new service opportunities that exist in the cloud, including disaster recovery, application-level services, monitoring, and analytics.
    • Antonio mentioned that too many service providers are holding on to basic up/down (fault monitoring) as their service/SLA offering instead of moving on to more granular performance monitoring and other managed services.
    • Once an MSP decides to create managed services, the sticking points are: How to manage differentiated service levels; Creating new pricing schemas (Hourly, monthly, committed, a la carte management?) and monetizing and managing new services.
    • According to Antonio, moving to the cloud means having the right processes and technologies to deliver on service level expectations: “Virtualization alone does not a cloud make.”
    • MSPs must make decisions about server, hypervisor, cloud stack, storage, app, and GUI, and then tackle security, reliability, cost, complexity, and culture. Another key issue is ensuring availability, performance, and control.
    • Good systems management is crucial: It adds visibility and predictability to your IT decision making; drives greater ROI for services; helps with cost allocation, simplification, culture change; and helps control decentralized assets.
    • Another important consideration is having access to “Operational Business Intelligence” to answer questions such as “What visibility will I have into my provider’s competency?” “I have a limited budget – where is it best spent?” “How do I calculate my capacity needs for next year?” “How do I decide where workloads should reside?” According to Ken Ziegler of Logicworks, MSPs must provide the real performance data and business intelligence customers need to defend their investment to their own internal business constituents.
    • The attendees were also polled about which pricing model is preferred by their customers. The results: Fixed: 25%; Resource consumption based: 50%; Don’t know: 25%; Other: 3% 
    • Ken said that pricing preferences depend on many factors, but that the majority of Logicworks customers prefer fixed pricing. However, the AWS model of hourly or pay as you go is becoming more popular. Indeed, he recited a quote he’d heard recently that customers stick with AWS precisely because they have the freedom to leave at any time.
    • All agreed that security is one issue customers are concerned about and voice regularly. Kevin Detsch of ePlus mentioned that security always comes up, especially as service providers evolve from managing infrastructure to hosting applications. Ken said that having a third-party security audit done goes a long way in ensuring customers they can trust you.
    • Antonio stated that when it comes to security and disaster recovery plans, you get what you pay for. “We in the industry need to educate buyers that there are different types of service providers.” All customers must take responsibility for their security/DR plans.
    • In the same vein, customers need to understand how their workloads reside within their service providers’ architectures and plan accordingly (hearkening back to last year’s AWS outage). According to Ken, MSPs need to help customers understand the best path to redundancy. It’s a matter of understanding your customers’ needs and helping them plan accordingly.
    • The final polling question asked what cloud management visibility do clients want? Application: 77%; Network: 63%; Storage: 51%; OS, hypervisor, or bare metal: 4%. Kevin said that their customers are increasingly asking for visibility into the application layer.

Thanks to Kevin and Ken for doing this webinar with us! The replay version will be available shortly at http://bit.ly/yw7vdE. Look for ScienceLogic at MSPWorld Feb. 1-3 in Miami (booth #1119). Antonio will be there to talk more about how not to get stuck in the cloud!

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