Cloudy with a chance of Managed Service Providers (MSPs)

In today’s global economy, the demand for increased mobility, cost-effectiveness, agility and on-demand availability of IT solutions has become more apparent. To better serve their customers, enterprises are actively seeking more efficient ways to scale their compute resources. Over the last few years, cloud computing has climbed the priority list when it comes to meeting such demands. Setting money aside in the budget for cloud computing has become a staple for every company. The adoption of the cloud is visibly changing the way IT solutions are procured, financed, managed and sold. The only way stakeholders from both sides of the table can reap the full benefits of this new reality is to re-align their operations. The rapid pace of cloud adoption within the enterprise has forced managed service providers (MSPs) to reassert the value they add to their clients.

MSPs would have had an easier time addressing the issues surrounding the cloud a few years ago, especially when their customers were still asking what cloud computing is. The landscape has since changed, meaning enterprises are now serious about moving into the cloud, and they are pushing to make it happen. The key to understanding the impact that cloud computing has on managed services providers lies in understanding the difference between the two.

What exactly is the difference between CSPs and MSPs?

Briefly, a managed service provider typically oversees a client’s IT end-user systems and/or infrastructure on a proactive basis and under a subscription model. On the other side, a cloud service provider can be described as a technology company that installs and delivers cloud services to their end clients in the form of on-demand services like SaaS (software-as-a-service), PaaS (platform-as-a-service), or IaaS (infrastructure-as-a-service).
An MSP will either be involved in some IT product reselling or IT projects. Once the hardware and any other related applications have been deployed on premise, the MSP charges a flat monthly fee to manage the deployed systems. The concept of managed service providers is believed to have stemmed from application service providers (ASPs), which provided companies with remote application hosting services. The emergence of ASPs eventually paved the way for IT companies that offered remote support for IT infrastructure. The services provided traditionally focused on the remote management and monitoring of servers and networks.

In a bid to differentiate themselves from other service providers, MSPs have now developed offerings more geared towards specialized niches. Managed security services providers, for example, offer services like remote firewall administration and other security-as-a-service offerings. MSPs can also be found in several different types of vertical markets. Industries such as health care, legal, and financial services are some of the markets that have shown an increased demand for managed service providers over the past two decades.

It is important to note that while most current managed service provider offerings are delivered in a hybrid cloud model, the term managed service provider cannot be used to mean that cloud services are being provided exclusively.

Does an MSP make sense in today’s business strategy?

If you are moving to the cloud, do you need an MSP? That is a question several IT pros face. The epigrammatic answer to that question is that an MSP can complement your cloud strategy in more ways than one. Having a partner that can help them generate more revenue is detrimental to any business. They are not only seeking ways to utilize technology more efficiently, but also more strategically. A business needs support to make its processes more agile so it can keep up with the changing pace of today’s business environment.

Managed service providers avow that the key to increasing margins with cloud services lie in delivering additional value. An MSP can resell a cloud product for MSRP (manufacturer suggested retail price) or more, but in the long run, there has to be some value addition associated with it, otherwise, what’s the point? The way MSPs deliver value is different for cloud-based services compared to traditional managed services. It is no longer a question of getting something to work; the challenge now becomes utilizing this new resource in a way that adds value to the end-client. CSPs typically roll out new features quickly, and some clients cannot keep up. A managed services provider can strategically position themselves to deliver value around services via change management, which is inclusive of training, adoption, and evangelization.

MSPs can act as an appurtenance, not just an alternative, to cloud computing by providing cloud connection or cloud integration services that allow IT to deploy assets in an amalgamation of cloud services and managed services. The MSP would, therefore, occupy the ‘management layer’ between the cloud and the enterprise.


Author: Gabriel Lando