Cloud continues to grow at a staggering rate, according to the latest research from Canalys. The analyst released research at the beginning of February highlighting that cloud infrastructure spend hit $23 billion in Q42018, with total cloud outlay reaching $88 billion on 2018, up from $55 billion in 2017.
Canalys also said that the role of channel partners in cloud services is growing in importance "as a direct results of these trends".
Changing market dynamics over the last 12 months have seen more businesses opt for multi-cloud and hybrid-IT environments, claims principal Canalys analyst Matthew Ball, in order to use the strengths of different cloud service providers and deployment models dependent on application and data requirements, compliance, cost and performance".
With all this opportunity, not to mention shifting market forces, the cloud market is as ripe as ever for MSPs. However, the opportunity has given rise to some fundamental question about what type of cloud customers need and where cloud's future is headed.
Channel partners we have spoken to offer significantly differing views on which cloud option is the best for end users. We take a look at the five key options available to MSPs and offer insight into what each can bring to your offering.
It makes sense to start with public cloud, as for many it's the future (or indeed, the present). According to Javed Sikander, CTO and VP at Redmond, WA-based master MSP NetEnrich, public cloud is the "new normal". He goes so far as to say that "in every enterprise out there, if a CIO or CTO doesn't have a public cloud strategy, he or she will get fired in the next six months to one year".
His views are echoed by other MSPs. Raj Goel, CTO of New York City-based MSP Brainlink International, told us in January that "Amazon and Azure are the evolution of the MSP business". Meanwhile, Albany, NY MSP Complete Network Solutions told us that public cloud vendors are "a known quantity" and, therefore, the obvious way forward for MSPs.
"You know what you're going to get, you know they're going to be around in five years, you know they're going to continue to mature and invest in their public cloud offering and get more competitive year over year as well," CEO Jeremy Wanamaker said.
There are some risks with the public cloud, however. A key one being the prospect of being locked into a contract with one provider, meaning the risk of painful price rises that you can't avoid, as well as services being dictated by the provider, rather than you and your customer.
Sikander notes, "I don't want to put all my eggs in one Amazon basket or one Azure basket. Being locked in like that could be really, really risky, because the cloud provider can control the whole strategy."
Private vendor-hosted cloud
While the move to public cloud continues at an exponential rate, there are those MSPs who continue to build out private cloud solutions for their clients because, simply, that's what their client wants. Often customers in highly regulated sectors such as the financial sector or the healthcare sector don't want sensitive data residing in a public cloud.
There are also clients who are yet to embrace the cloud, making it a difficult sell for MSPs, especially if they're trying to sell a public cloud. In this instance a private cloud might be perceived as a much better option.
"[Many of our customers] just don't trust the cloud, even though we can talk to them all day long about how it's more secure, and how it beats the compliance standards and all this stuff," Charles Henson, managing partner at TN-based MSP Nashville Computer, told CPI in January.
A private cloud may be a good first step for a nervous customer. However, for many MSPs, it's no longer the most effective solution to offer customers.
"In my experience, private cloud tends to be more expensive. It also tends to be with smaller companies," Wanamaker told us. He also noted that there's been considerable activity in the private cloud M& space, which he says has led to both the MSP and its customers "getting burned".
"You sign a long-term deal with a private cloud provider who then gets acquired by a new company and then you have a whole series of negotiations, customer service may drop and so on."
In terms of security, at first glance, a private cloud may seem more secure. In reality, however, the public cloud vendors have seriously deep pockets, meaning they can afford the best security money can buy. The idea that private clouds is more secure, therefore, may be somewhat misleading.
Private MSP-hosted cloud
This is perhaps the cloud strategy that offers up the fieriest opinion from everyone we spoke to. Those that have built their own datacenters in order to host their customers' private clouds swear by it. Meanwhile, others think it's impractical and unsustainable.
Speaking to us in January, CEO and owner of MO-based MSP Computer St. Louis Seth Russell told us that the MSP doesn't rely on vendors' clouds and prefers not to have conversations with clients about them.
"We like to control everything ourselves, for a lot of reasons," he said. Of note, "a couple of bad experiences" with vendors' clouds led the MSP to build its own datacenter (two, in fact), which Russell said allows for complete control over the customer experience.
"…we like to control the client experience and be able to set expectations fully internally. And when there's an issue, we come up with the solution versus having to rely on someone else to get it right. So it's done well from a client experience standpoint, and from an internal capability standpoint," he said.
However, Sikander is not convinced. He argues that MSPs that don't embrace public cloud are at risk of becoming out of touch.
"A lot of MSPS are still trying to stay true to their model, which is that ‘we keep buying hardware, we keep refreshing hardware, let me keep my running my small datacenter and serve my customers and this will go on for as long as possible and I'll continue to survive'. These are MSPs who are not adapting to the big change happening, which is that public cloud is the new normal that's where compute is moving. That's where storage and network and compute and workloads are moving," he said.
It's a compelling argument and raises the question of whether MSPs operating their own datacenter can survive long term (or at least whether their datacenter can survive long term). Russell thinks so. Of note, his first datacenter - opened in 2012 - has been so successful that he opened a second in 2016. So there is clearly a market for MSP-hosted private cloud. The question worth considering for MSPs is, will it continue? And if so, for how long?
The hybrid cloud does exactly what you think it does - it offers a mixture of on-prem and cloud environments.
How popular is it with customers? It depends very much on the type of customer and also their vertical. The highly regulated industries will likely want to keep some of their data in their on-premise, but may well want to utilize cloud for less-sensitive data. A hybrid cloud makes sense if that data needs to serve as a whole. Likewise, customers with legacy workloads or workloads that have to be kept in isolation for any reason will find hybrid cloud appealing.
It can also work for customers who want to dip their toe in the water of public cloud but don't feel confident about going all in straight away.
According to Sikander, it's a popular choice at the moment. "Everybody is in that model right now," he told us. However, he also argues that it is "overhyped". Why? Because it's a simpler offering than it's made out to be.
"I think it's overhyped… The end-user customer comes up with a very clear strategy of wanting certain workloads to move into public cloud and others to remain in the datacenter and needing a tool that helps manage all of this from one place, but that's it, they're not thinking of anything beyond that; so that's hybrid cloud."
Still, the master MSP expects hybrid to "continue to live on", because certain workloads will always need to be run locally, and this has to work in sync with the move to public cloud.
The solution to not placing all your eggs in one cloud basket is found, it seems, in multi-cloud. This hugely popular buzzword is actually turning out to be way more than that. It is, in fact, the potential answer to a number of MSP questions when it comes to the cloud.
Goel told us that Brainlink is seeing more and more need and greater demand for multi-cloud solutions. And Sikander notes, again, that working with a single public cloud provider could be "really, really risky" in terms of lock-in on pricing and strategy, so multi-cloud is an obvious way to manage that risk.
Firms may also prefer to work with multi-cloud if they have different departments working on different types of projects and services, or simply departments that prefer different cloud platforms for their own reasons.
There is an obvious risk here. A lack of cohesion in cloud usage may present itself. Further, such a direction may encourage the adoption of shadow IT, and therefore a lack of control over cloud usage.
According to Sikander: "Sometimes these workloads are completely isolated. For example, the marketing department is building a new website and they want to build that in Google Cloud. The procurement department uses a procurement system that they run on Azure. So there's no connection, which is fine, except that the big problem is now, from a CIO point of view, you've got skills that are across all these clouds. If you don't have a design strategy for going to multi-cloud and then have teams just going on their own, you open up the risk of shadow IT."
He described this as the cost of managing a multi-cloud environment and suggests that MSPs looking to switch customers to multi-cloud might want to consider doing it one vendor at a time (while being mindful of the level of commitment being made), rather than going all in with multiple clouds.
"I believe in adopting change one variable at a time, and three clouds means three variables, so you just go with one first, get your solutions working and then you can explore other things later. It's a big change for you to move from a datacenter into public cloud, don't do that across three different clouds to start with. Pick one and go with it."
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