How Are MSPs Planning to Grow Their Business?

Managed Service Providers Look to the Cloud
Michelle DeFiore

There’s an explosion in businesses wanting to be “in the cloud.” The cloud has moved from being a business buzzword to being a powerful way to get infrastructure and applications on demand. With the public cloud space dominated by a few big players (Amazon Web Services, Microsoft Azure, and Google Cloud Services), smaller managed service providers (MSPs) might be wondering how they can compete.

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Structure Research reports that the global market for massive-scale public cloud services is growing at more than 61%. They project it to reach $122 billion in 2020, up from $19 billion in 2016. 451 Research estimates the managed service opportunity around public cloud IaaS services to exceed $43 billion in 2018, with a CAGR of 25%.

Opportunities for MSPs in the Public Cloud Space

MSPs can build and monetize managed cloud services in order to gain the following benefits:

  • Establish long-term, ‘sticky’ recurring revenue streams
  • Gain early market share in managed cloud services and establish a competitive
  • advantage

  • Strengthen relationships with mainstream cloud providers such as AWS and Microsoft
  • and benefit from their support and incentives

  • Build institutional knowledge of cloud technologies and services know-how

The managed public cloud opportunity is one that traditional MSPs and those transitioning from a hosting-centric business model cannot afford to ignore. By developing a position in this market, you can learn while participating in a major technology shift that will persist for a decade or more.

How to Become a Trusted Advisor with Key Customers

There are three best practices to make the most of this managed cloud opportunity.

First, develop an enterprise value proposition for a managed public cloud service. This value proposition centers around helping your clients get to the cloud sooner—accelerating the benefits of agility, flexibility, and potential cost saving. It is also means proving that you can mitigate the perceived risks of moving to the cloud.

Next, define a “three-tier” managed service model for customers. By having a gold, silver, and bronze service-tier model, you can offer varying levels of support based on client needs and have the opportunity to upsell services accordingly. If these tiers are created properly, your development, marketing, and sales processes will achieve greater success faster. Learn more about defining your new managed service here.

Third, eventually expanding revenue streams and optional add-ons. A variety of additional services are often added as MSPs build out their managed public cloud services portfolio. Examples include: cloud architecture design, cloud security review or consulting, cloud migration services, and cloud cost management.

One of the biggest takeaways is for MSPs to start seeing big cloud service providers as partners and collaborators rather than competitors. If you’re a managed service provider who wants to expand your offerings and grow your business, this guide is a great place to start.

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