Webinars - Featured Articles
Evolving Your Managed Service Business to a Cloud Hosting Model
Managed service providers (MSPs) are constantly trying to come up with new and innovative offerings and differentiators to avoid getting stuck in the cloud. TMC (News - Alert) recently held a webinar discussing some of the challenges service providers face and how to meet them head on to make the most of the promise of cloud computing.
According to an audience poll, more than half of webinar participants said they were already delivering cloud services in 2012. Around 22 percent said they were planning to introduce services this year, and another 14 percent were not sure, while 11 percent were not planning to offer services. Presenter Antonio Piraino, CTO of ScienceLogic (News - Alert), said that while many MSPs are telling the market they're offering cloud services, they're actually still transitioning to the cloud model and facing challenges each day.
“This is really an evolution not a revolution,” said Kevin Detsch, vice president of business development at ePlus. He added that there are a number of considerations like risk and compliance issues, in addition to actual applications, that managed service providers must take into consideration to evolve to hosting cloud services.
“Managed services can be put into the category of infrastructure as a service,” said Ken Ziegler, president and COO of Logicworks (News - Alert). “Most IT service providers are getting there….it's a technology capability.”
The main focus, according to Piraino, should be the target audience. He said that most providers have been planning for and have found the budget for virtualization of their data centers, and that's an important first step. The next step is automation, everything from automated billing to front-end provisioning. But becoming fully automated is pretty difficult to achieve, it's basically the holy grail for those making the transition to the cloud.
Piraino said that service providers need to start thinking about the next phase of their cloud strategies, and how to make money and differentiate themselves in the marketplace are the major challenges as well as opportunities of this important phase. There is also a hindrance toward moving into the cloud, it represents a cultural change and a paradigm shift for service providers and their customers. But he added that those challenges can be overcome.
“It doesn't need to be that risky,” said Piraino. “There's a lot more tweaking that can be done. This can actually help you achieve new business services.” Disaster recovery is just one of the services that may be culled from existing systems already in place. Analytics may also be used more efficiently and data can be reused and manipulated much more effectively to service providers' advantage.
The pricing structure is another big sticking point for MSPs and their customers. Piraino said ScienceLogic is moving toward a per device per month billing model and that is gaining traction. He added that the market as a whole is moving toward a subscription economy. Webinar participants polled said that 46 percent of their customers prefer a resource/consumption pricing model while 25 percent prefer a fixed price and an additional 25 percent are unsure of what they want.
“We're already starting to see the next generation of the pricing model evolve,” said Detsch. He added that business process improvement is driving business efficiency as well as a shared risk/shared rewards model.
Ziegler added that it ultimately depends on the customer, with traditional enterprises more reluctant to move toward a usage/consumption model. “The fear of variable consumption is that all of a sudden the costs get out of control,” he said, specifically with larger companies. “The appeal of not having a commitment seems to be very relevant with the younger companies.”
Infrastructure is another major component in moving to a cloud services model, with a trend toward flexible IT infrastructure that is sold on a granular basis. “Good systems management technology is really pivotal as your next step in this evolution,” said Piraino. With this comes an emphasis on operational business intelligence, with a trend toward looking at data from web services, from a transactional perspective, to better serve your customers. He added that looking at those analytics can help services providers in improving their internal IT infrastructures as well.
There are eight main cloud management system characteristics that service providers should be providing and focusing on. Simplicity, monetize-able offerings, affordability, resiliency, flexibility and scalability, automation, security and service and support. According to Piraino, once those services have been layered on to offerings, the next challenge is the proliferation of tools to actually manage the services.
“The existing tools in the market have not really kept up with these new technologies,” added Piraino. Webinar participants said their customers are most interested in management visibility at the application layer, at 77 percent. That is followed by 63 percent who want visibility at the network layer, and 50 percent who are interested in storage.
As for what is up next in cloud trends, there are a number of factors that service providers need to focus on to successfully transition. These include stronger security, better service delivery, more reliability, greater productivity, high margin services, a shift to service brokerage, automation and orchestration, solid monitoring and management (including better visibility and control), and big data and operational business intelligence.
For more information on making the transition to the cloud, register to listen to the webinar and view the slides.
ScienceLogic is a Gold Sponsor of MSPWorld, collocated with TMC’s ITEXPO East 2012, taking place Jan. 31-Feb. 3 2012, in Miami, FL. ITEXPO (News - Alert) is the world’s premier IP communications event. Visit ScienceLogic in booth # 1119. For more information on ITEXPO registration, click here.
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Edited by Jennifer Russell