August 03, 2015. Technical Cloud Author: James Hankins

Managed Service Providers shouldn’t view public cloud as competition

Instead they should realise the opportunity public cloud providers offer them.

In my last blog I talked about using direct connections to access public clouds, instead of going via the public internet. I mentioned how I am seeing MSPs (Managed Service Providers) utilising public cloud providers like VMware Vcloud Air and IBM SoftLayer to improve and or complement their current offering. For me, there are 5 scenarios where MSPs can benefit from these types of public clouds. These are:

 

Improving their global footprint

By utilising a public cloud provider’s data centre locations, an MSP can offer its services to a global audience without having to invest in building new data centres of their own. For me this is a huge benefit for MSPs as not only does it save them the upfront investment, but it can also open up new revenue streams.

 

Responsiveness

If an MSP partners with a public cloud provider they have a huge pool of resources they can dip into almost instantly. This means that when they are acquiring new customers they no longer need to think about what capacity they have left in their data centres, along with how long it will take to expand that capacity. MSPs can win new business and deploy it in the public cloud instantly, while in the background expanding their data centre capacity to pull this workload back down. So, not only have I seen this help MSPs win business but also to monetise that business a lot quicker too.

 

Contingency cost saving

Most MSPs I talk to seem to reserve about 10-20% capacity in their data centres for; spikes in usage, when they bring on new customers, maintenance, in case of an outage etc. However, by utilising the public cloud MSPs can now run their data centres at 100% and use the public cloud when they need extra capacity. When the need is there and they are using the public cloud regularly month on month, that would be the time I would suggest they expand their own data centre to pull these workloads back in-house. This means they are investing in infrastructure that is already sold and they move to a model were they only buy kit as and when they need it, which ultimately results in them paying for only what they use.

 

Test and development cost saving

It is well known that developers want all the resource in the world but half the time they don’t actually use it. Some researchers even suggest that test and dev environments can equate for up to 60% of a business’s resources.  By moving test and dev to the cloud, developers have an infinite amount of resource at their fingertips but the business only pays for what they actually use.

 

Disaster recovery

All MSPs have a disaster recovery solution in place, usually it consists of them building in resilience between their own data centres. But what if their environment goes down? By utilising public cloud for their DR solution, MSPs can reduce their risk and ensure a better service to their end user. This also in turn will reduce the MSP’s infrastructure costs as they will no longer need resources sitting there idly waiting for a disaster, instead these resources can be utilised for new customers.

 

So in summary, I believe that across the above scenarios there are 3 main benefits to MSP’s for partnering with a public cloud provider; revenue generation, risk reduction and cost saving. This is highlighted in the table below.

 

  Revenue generation Risk reduction Cost saving
Global footprint Yes Yes Yes
Responsiveness Yes    
Contingency cost saving     Yes
Test and dev     Yes
Disaster recovery   Yes Yes

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