At the last MSPWorld conference several people said that managed services and cloud computing are purely issues of economics. For the customer, getting hardware out of their premise is only a small part of the story. The other issue is getting their IT spend off of the balance sheet and turned into an operational expense.
For the service provider, this same economic model of turning capital expense into operational expense is also becoming a reality. While the customer may have a variety of reasons for accomplishing this the MSP has a primary motivation: survival!
Survival for managed services firms are tied to growth (another dominant theme from MSPWorld). MSPs need capital and other resources to grow. Typical areas of MSP growth include:
Adding staff Technical capacity Hardware/software Facilities expansion Rapid adoption of new technology (ie, innovation)
There are others we could add to this list but these are quite common and can be found amongst MSPs of different sizes and across the globe. The problem is that MSPs today are facing a period of forced innovation and growth or irrelevance. The forced innovation I'm speaking of is cloud computing.
At this point, many MSPs reading this may say that they are already delivering cloud services to their customers. However, this statement may be true for reselling other providers' cloud offerings (like backup, email/productivity, etc.) but we still have a way to go before the vast majority of MSPs begin to deliver their own cloud based services. The only thing standing in the way of this reality is money.
While money can't buy you everything, it can do a lot when it comes to building a cloud offering. This is where the economics comes in and becomes important. MSPs need to preserve cash flow, but at the same time figure out a growth strategy that allows them to accumulate the materials needed for cloud computing independence (or private cloud computing).
How will MSPs Fund Their Growth? Strangely enough, the saving grace for MSPs may be found in the very community that was perhaps the most resistant to managed services early on. I'm referring to the distributors.
In the early days of managed services distributors felt very threatened by the movement that (in their minds) spelled the end of hardware and software being sold through the VAR. Today, we are now seeing nearly all the global distributors carving out a significant role for themselves as economic saviors by bringing MSPs (and their customers) greatly needed resources to enable solid, scalable, and secure private cloud foundations. Even for the smallest MSPs there is a role for them to play in delivering their own cloud services (not just reselling cloud).
These distributors are not just offering traditional leasing, but instead are developing and maturing their financing models so as to offer MSPs "pay as you go" capabilities for a great variety of products and services.
Once these economic models become prevalent enough amongst the MSP community then we will see a growth of cloud and managed services spending unlike anything we have ever witnessed in the past.
Attend our webcast on how distributors are helping fund MSPs in their growth plans https://www.brighttalk.com/webcast/8963/86667
