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Rightsizing the Cloud Service Provider

One of the issues that solution providers have with investing in the cloud is all the money needed upfront to create a cloud computing service. The amount of capital required effectively puts building cloud computing platforms out of reach for many solution providers, which results in them reselling services built by somebody else. The trouble […]

Written By

Michael Vizard

May 21, 2012

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One of the issues that solution providers have with investing in the cloud is all the money needed upfront to create a cloud computing service. The amount of capital required effectively puts building cloud computing platforms out of reach for many solution providers, which results in them reselling services built by somebody else. The trouble with that approach is that not only is it less profitable, it tends to have a negative effect on the equity of a solution provider that is essentially acting as an agent on behalf of someone else.

The good news is that as cloud computing evolves solution providers are about to be able to have it both ways thanks mainly to the advent of “cloudbursting.” As a technology the “cloudbursting” concept is relatively simple. Instead of building out IT infrastructure to meet peak application workloads, a solution provider can opt to build as much IT infrastructure as they see fit. They can then dynamically invoke additional cloud computing capacity on demand as needed from vendors such as IBM.

According to Mike McClurg, IBM vice president of midmarket sales, IBM is anxious to work with solution providers to develop business models that maximize profitability in the age of the cloud for the channel. The best way to achieve that, says McClurg, is to make some judicious capital investments up front, while relying on partners such as IBM to handle spikes in application processing requirements. Of course, McClurg, says this all works a lot more smoothly when the cloud service provider has standardized on IBM hardware and software, but strictly speaking “cloudbursting” doesn’t necessarily require a common set of IT infrastructure between the solution provider and the provider of the additional capacity. But things tend to work a lot smoother if both parties are working with the same technologies, says McClurg.

McClurg says IBM sees this capability as a new class of managed services that will be significantly more profitable for its partners than managed desktop computing services, which have become a lot less profitable to provide. That doesn’t mean that cloud computing services won’t one day be subject to the same laws of diminishing returns, but for the moment they do rank among the most profitable services that solution providers can deliver.

Interest in “cloudbursting” in particular is expected to rise because just like solution providers, customers are trying to minimize the amount of capital that needs to be invested in IT infrastructure. Many of them are trying to rightsize their IT infrastructure investments with an eye towards invoking third-party compute capacity in the cloud. They may not care as much about where that capacity comes from as much as the fact that there is somebody there to manage it on their behalf. Obviously, that creates an opportunity for solution providers.

“Cloudbursting” is a nascent cloud computing technology that may not be ready for prime time just yet. But it clearly will become a major factor in how cloud computing resources are delivered in the years ahead, which means solution providers should start planning today how to leverage “cloudbursting” to their best advantage tomorrow.

Michael Vizard

Michael Vizard is a seasoned IT journalist, with nearly 30 years of experience writing and editing about enterprise IT issues. He is a writer for publications including Programmableweb, IT Business Edge, CIOinsight, Channel Insider and UBM Tech. He formerly was editorial director for Ziff-Davis Enterprise, where he launched the company’s custom content division, and has also served as editor in chief for CRN and InfoWorld. He also has held editorial positions at PC Week, Computerworld and Digital Review.

Rightsizing the Cloud Service Provider

Michael Vizard

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