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Are There Business Opportunities for MSPs in the Public Cloud Market?

There is space for IT service providers in the public cloud market. It’s up to you to take advantage of it.

In August, Gartner released its Magic Quadrant for Cloud Infrastructure as a Service. Gartner’s Lydia Leong summarized the results of the research as follows:

“Little by little, AWS has systematically addressed the barriers to “mainstream” enterprise adoption. While it’s still far from everything that it could be, and it has some specific and significant weaknesses, that steady improvement over the last couple of years has brought it to the “good enough” point. … 2013 has really been a tipping point. We still hear plenty of interest in competitors, but AWS is overwhelmingly the dominant vendor.”

These findings beg the question for many service providers of whether there are any business opportunities for them as public cloud providers. In other words, is it even worth it to invest the time, money and energy to become a public cloud provider, or should they focus on private cloud deployment and cloud integration for their customers? 

I take a different view of Gartner’s Magic Quadrant report. It points out two important market forces:

  1. Public cloud IaaS is catching on and becoming a trusted IT service
  2. The options from major vendors like AWS have significant weaknesses that local providers can exploit.

So let’s ask some important questions:

  • Are businesses interested in using MSPs for cloud services? 
TechTarget’s 2013 IT Priorities survey asked those looking to adopt cloud services whom they were considering as their providers. Fifty-five percent responded that they were looking to an MSP, compared to just 25 percent considering pure-play cloud providers.
  • How many businesses are really planning to adopt more cloud services? 
CompTIA’s recent survey indicates that 43 percent to 50 percent of all small-to-medium businesses will use some form of the cloud in the next year. This is a great opportunity for the MSP market.
  • Do MSPs have something to offer that AWS doesn’t? 
Absolutely. MSPs have intimate, hands-on knowledge of their customers. They can deal with the local issues of the “on ramp” to the cloud by providing immediate, in-person support. They can create tailored proposals that include exactly what a customer needs, without unwanted add-ons. They can perform migration and integration services directly. IT provider-based public clouds are limited, more closely resembling a community cloud than a huge service accessed by millions. Bottom line: They can OWN the last mile!
  • Can IT service providers afford to build out high-performance, reliable cloud infrastructures? 
The IT solution market is evolving. New solutions are making it easier and more affordable for smaller providers to provide desktops, servers, storage and BDR services through their own public cloud. For example, Zenith Infotech’s TigerCloud solution provides a multi-tenant converged infrastructure with business process management software at a very competitive price.

There is space for IT service providers in the public cloud market. It’s up to you to take advantage of it. The challenge is not in the market opportunity, but in the marketing approach.  Focus on your advantages compared to large, impersonal cloud providers to keeps your customers’ IT budgets in your hands and increase customer stickiness.

Richard Reiffer is Vice President of Cloud Services at Zenith Infotech and CEO of Global Cloud Consulting. Monthly guest blogs such as this one are part of Talkin' Cloud's annual platinum sponsorship.

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