In the span of a decade, the Cloud has gone from being an abstract concept to the engine that powers cutting-edge enterprises and innovative developers. The funny thing about exponential growth is that it tends to sneak up on you; Moore’s Law predicts that computing power will double every two years, and thus far that’s held true. This means that the cost of supercomputing has steadily fallen to where what was once unthinkable to even the largest organizations is now available to everybody.
Cloud computing and its economies of scale are nearly as vital a utility to modern society as electricity. The growth of the Cloud is forcing MSPs not just to take notice but take action. Forward-thinking providers are already reselling Cloud services to their customers (and seeing an impressive ROI). But many MSPs are apprehensive: they feel the Cloud looming over them, but they’re still not sure what it means for the future of their business.
Welcome Change and Welcome New Customers
This apprehension towards the risk of adopting the Cloud is perfectly understandable, as history reminds us that truly revolutionary new technologies are usually feared and criticized before they become a part of everyday life. An MSP who has done well for years delivering products and services a certain way is appropriately wary of any changes to the model that has worked for them for so long. But in this case, the facts are clear:
- By 2018, the global market for Cloud technology is expected to reach $79.1 billion
- In the next five years, Cloud computing will increase by 44%, while on-premises solutions will only grow 9%
- 82% of companies say moving to the Cloud has saved them money
Cloud technologies, platforms, and services are emerging at a breakneck pace. This constant change can be confusing for business decision makers who want to move forward, but need guidance from someone who knows the Cloud inside and out. Customers typically fall somewhere on a spectrum ranging from those who have no idea what Cloud is or what it can offer, to those who possess a deep understanding of Cloud and their specific needs, but need management and support.
This is great news for MSPs: the inevitability of Cloud brings with it a whole host of new opportunities for gaining customers by reselling Cloud services.
“Small Players” Have a Big Job Ahead
Many organizations want turn-key IT solutions built on a consumption model that free them to grow, innovate, and compete without the burdens of building and managing their IT in-house. MSPs are perfectly positioned to step in, meet emerging IT needs, and act as a liaison between client and Cloud. Cloud providers like Amazon and Google are giant, monolithic institutions who cannot hope to offer the personal touch and dedication to customer service that the smaller, more agile MSPs can.
So-called “smaller players” have the advantage of being more personal and responsive to customers than hyperscalers. MSPs who can leverage raw hyperscale resources to deliver, manage, and support affordable Cloud infrastructures and services will find tremendous, long-term value in reselling Cloud services.
3 Ways MSPs Benefit from Reselling Cloud Services
By seizing the Cloud opportunities available and marketing those Cloud services, MSPs can benefit from reselling Cloud services by lowering their operating costs, expanding their business through offering new services, and gaining a recurring revenue stream.
1. The Cloud Empowers MSPs to Offer New Services
The number of new services offered by Cloud providers is staggering. The sky’s the limit when you can leverage unlimited storage, bandwidth, and processing power into any number of new services for your customers. IaaS provides a significant opportunity for MSPs as they can broker third-party IaaS resources and provide value-added managed services on top of them.
The key to reselling Cloud services is to think like a time-and-resource strapped business owner or hungry startup, and design services that will make their jobs easier:
- Resell Cloud products and wrap your own specialty services around them
- Upsell existing Cloud customers on critical security, database, and disaster recovery services
- Manage Cloud migrations and legacy application virtualization
- Facilitate short-term development projects on hyperscale Cloud platforms
The specific services you decide to focus on and excel at should be determined by your unique customer needs and business goals.
2. MSPs Can Lower Their Operating Costs with the Cloud
Bottom line: hardware is expensive. Not only the initial purchase, but upkeep, maintenance, and obsolescence are very real concerns for those whose business growth potential is limited only by physical resources. How wonderful then that Cloud services like IaaS and PaaS can help make those concerns evaporate into thin air! And for MSPs with centralized hardware that could be damaged by natural disasters or interrupted by utility outages, moving infrastructure to the Cloud is a no-brainer.
It’s win-win. While you help clients lower their IT expenses, your business gets to do the same.
3. The Cloud Offers MSPs an Additional Recurring Revenue Stream
As you know, managed services provide a recurring revenue stream that one-time sales simply cannot. Rather than working on a project-to-project basis to upgrade and maintain clients’ on-premises IT environments, by reselling Cloud services you can remotely manage their Cloud-based systems at a predictable, monthly rate.
Each new day brings with it new advances in Cloud computing. What this means for MSPs is that the number and diversity of services they can offer customers will continue to increase. By staying vigilant and ahead of the curve, MSPs can bundle products and services together in novel ways and only bill the customer for exactly what they need. This is a boon for the customer, who will come to depend on the MSP, not only for their current IT management but also for future Cloud integrations.
Pivot or Perish
If customers can’t get the Cloud infrastructure, resources, and services they want from you, they’ll eventually get it from someone else. This is the stark reality; pivot your skill sets, expertise, and offerings to the Cloud, or watch business die off. MSPs who seize on even one of the many new Cloud opportunities will secure a place in a market set to double in size over the next five years. The question is not only how your company will leverage the Cloud, but also how it will reach customers with a compelling message of business innovation. If you’re ready to reshape your business and help customers reshape theirs, talk to Five Pilots today. We’ll help you get your message in front of businesses that are eager for Cloud, and looking for help.