An incredible, history-making moment happened in the IT industry recently. Microsoft released the beta version of Office 365, marking the beginning of the end for managed services providers who make their living off reselling, installing and supporting expensive servers and workstations for small businesses.
In my community of MSPs, there are a lot of mixed feelings about this. Some see this cloud revolution as a huge opportunity to position themselves as a “cloud integrator” and to develop a new strategy for making a lot of money helping clients move to a cloud-based platform. In fact, many are making more profit selling these solutions over the traditional MSP services.
Others who are resisting this revolution are largely in denial. They tell themselves that the change won’t happen that quickly, that Office 365 isn’t all it’s cracked up to be, that cloud computing won’t work for everyone, and so on. While there is some truth in that and, yes, there will be a period of hybrid networks, there’s no doubt in my mind that the writing is on the wall for any IT company that makes its living installing and supporting “traditional” networks.
Here’s why: businesses want solutions, not technology. Infrastructure, hardware, servers, connectivity and mainstream applications are not strategic investments for the average small business; they just want to acquire them as cheaply as possible. And now that they can avoid many of these costs altogether with cloud computing, it’s becoming a no-brainer. Think about it: if one of your clients could get rid of their server, software, workstations and ALL the complexity and costs involved in keeping everything running – and could outsource this to the cloud, significantly cutting their costs –why wouldn’t they?
Yes, I know that some businesses are concerned about connectivity and security, and not all line of business applications will run in the cloud. But seriously folks, connectivity is exploding and almost every software company I know is moving to a SaaS model. It’s only a matter of time before this becomes the way all businesses operate – and if your business is dependent upon making money installing and supporting the traditional network, the value you bring is diminished significantly.
So what should you be doing NOW to transition your MSP business? For starters, you should be investing a lot of time into understanding wide-area networking, cloud architecture, security and technology. A good exercise would be to move your company’s network to the cloud to get some first-hand experience.
I also think you need to start asking yourself, “When the MSP model of clients paying us $100 per workstation and $500 per server to support their network goes away, where will we provide value and get paid?” Good question – one you ought to spend some serious time thinking about.
For a short period of time, there will be value in helping clients choose the right cloud platform, integrating all the cloud apps they are using and providing help desk support (hence the term cloud integrator). I predict we’ll see a lot of MSPs become more niche focused as their role becomes one of a business consultant who understands the business outcomes, challenges and needs for a particular niche, and can recommend the right mix of strategy and technology to drive those outcomes and solve their problems.
And the sooner you start making that switch and communicating to your clients about it, the better your chances are of actually making some real money over the next 3-5 years.
