The Future of Cloud Based Applications

It has been generally accepted knowledge that managing applications is one of the most lucrative areas for managed service providers. Since the early 2000s, MSPs who manage applications enjoy very intimate relationships with their customers and also enjoy very lucrative margins.

With this as a starting point, today's news from Oracle that approximately 80% of applications will be headed to the cloud by 2025. This comes from Oracle co-CEO Mark Hurd. Now, this statement makes perfect sense when you are justifying a massive investment, as Oracle is making, in building out data centers to fulfill demand for cloud computing.

Additional evidence of the growth of managed applications is a new research report from MarkestandMarkets, estimating this market to be worth $2.02 billion in 2017 and expected to reach $5.54 billion by 2022, representing a Compound Annual Growth Rate (CAGR) of 22.4%.

Future of Cloud Applications

Let's assume that Mr. Hurd is correct and the majority of applications will be running in the cloud by 2025 (by the way, I think he's probably right about that prediction), there are still some unanswered questions we must address.

  1. Who will help migrate all the legacy premise based applications into the cloud?
  2. Who will manage the applications once they are residing in the cloud?

I think MSPs have a legitimate role to play in addressing both questions.

Migrating Legacy Applications to the Cloud

There are MSPs out there who have application development experience and can handle cloud application migration projects. While I wouldn't say these MSPs are common, they do exist.

Cloud application adoption clearly depends on customers (and application vendors) making the investment in pushing certain applications to the cloud. Just ask vendors like Intuit and they will likely tell you it is not as easy as it looks. However, once the investment has been made, it often provides many benefits.

The point is MSPs can play a role in migrating these applications to run in the cloud. The migration, however, is only half the battle and not the end goal. The end goal of any cloud application migration should be the ongoing management.

Managing Cloud Applications

Smart MSPs involve themselves in short term projects in order to gain long term managed services relationships. The same is true for applications. Regardless of how an application gets to the cloud, someone will need to manage that application.

Now, if you were a fly on the wall of some of these public cloud companies, you would likely hear them say that they would like to be the ones to manage cloud applications, especially if it is in their cloud. Recent moves by Amazon to being offering managed services to their enterprise customers supports this premise.

MSPs, therefore, need to be aware of these trends and stake their claim in the ground as it relates to managing cloud applications. If they don't, someone else most definitely will.

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