Cloud Computing vs. Managed Services

It’s not often that Channel Insider’s Larry Walsh and I get to go at it face to face, and even rarer that we engage in lively debate within a structured meeting rather than the hallway, over dinner or at a reception.  But recently we did.

We both were down at the HTG meetings, and he was presenting the Project Nimbus results to a packed room of my HTG colleagues. Larry and Channel Insider Editor Carolyn April were presenting the initial findings of the group, and we were discussing the definitions of cloud computing.

The definition the group came up with is this:

“Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three service models, and four deployment models”

The focus on cloud computing definitions always brings up managed services, because cloud computing can be a managed service. As the paper defines, “Cloud computing can be a managed service (network administration, security appliance monitoring and management, remote storage management), but not all managed services are cloud computing.”  The discussion revolved around the idea of a Venn diagram, where the circular overlap resulted in those cloud computing solutions that were also managed services.

What Larry and I chose to engage over was a subtlety to the discussion that I think was lacking. Note that the “managed service” that the group defined could be “network administration [or] security appliance monitoring and management [or] remote storage management.” I’ve always disliked this particular set of definitions on managed services. To me, managed services is an industry buzzword, used by many and meaning different things. Dan Wensley at Level Platforms delivers the definition I like best, and that is “recurring revenue from a defined service. ”

This definition rings true because regardless of whether there’s network administration or remote storage management, or if the service is delivered remotely or on-site, the definition is clear and correct.

Let’s compare the two definitions now. Cloud computing focuses on a technical solution. It’s a model – a technical one – of delivering technical access to configurable computing resources. Cloud computing, as defined by Project Nimbus, is a technical solution.

Managed services, however, is a contractual relationship.  A service is defined and delivered on a recurring revenue basis.  I purchase managed services from Paychex, our HR solution. They deliver a set service on a recurring basis. I also get managed services from the phone company, and I get managed services from my home security company.  I get managed services even from healthcare.

I’m stressing this distinction because when looking at managed services and cloud computing, it’s important to understand what you mean. Managed Services (and not the capitalization there) is often defined as the delivery of remote help desk and network administration services, but that is actually only one kind of managed service.

It’s useful to compare managed services and cloud computing. I believe the delivery of a cloud computing solution is actually best served as a managed service, although it’s not the only way to do it. I also think that MSPs are well positioned to deliver these cloud solutions.  

The key is to understand how the contractual relationship connects with the technological delivery.

Project Nimbus will be continuing – check it out.