Cloud Complexity Means Opportunity for MSPs

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Level Platforms CEO Peter Sandiford recently posted the latest edition of his blog series on Seven MSP Megatrends. Number two of the seven megatrends is SAAS and cloud computing changing the game.

Sandiford points out that all the major technology vendors have already gotten into the game with some kind of SAAS/Cloud offering, as well as newcomers such as Google and Amazon. He offers a view of the opportunities here for vendors and for managed service providers. And he lays out why this scenario will ultimately be a good one for MSPs.

It creates an ever growing web of complexity for businesses to manage as they use services from multiple vendors and cloud providers, and that’s where the MSPs come in – as integrators and trusted advisors who are able to turn this ever growing complexity into simple deliverables for end customers.

More industry observers are saying that this is a strong opportunity for MSPs who may be worrying about their place as the industry transforms into something new. No one is better positioned than these service providers to integrate the offerings of vendors who compete with each other. No one is better positioned to craft a best-of-breed offering for customers. So unless customers want to go all in with a single vendor, working with an MSP will be the way to go.

And at this point, while the revenues aren’t particularly high from any single customer for MSPs, revenues are recurring and margins are about 20 percent. Combine this business with the traditional reseller business and you have a transitional strategy that very well many just turn into a long term strategy. Because most experts agree that businesses aren’t likely to opt for a cloud-only IT infrastructure. Rather, a hybrid infrastructure, with some on-premise and some cloud-based systems is the most likely scenario for most companies.