The concept of a managed service provider (MSP) helping customers to save money on cloud services is a tricky one. If customers purchase cloud services through the MSP, it may seem that reducing the amount the customers spends on cloud would reduce the MSP’s revenue. And is the idea of “saving money” really an outcome customers seek from their service providers?
We’ve been grappling with some of these questions lately. We spent our first year on-boarding customers directly to the ParkMyCloud platform. Recently, we turned our attention to potential partnerships with MSPs and Cloud Consulting firms. When we talk with them, we ask: what are your clients’ key priorities? How do you seek to deliver additional value?
Cost reduction as an element of total value
In our various conversations with MSPs, we pay attention to how they prioritize helping their customers save money. We heard that although cost reduction for clients was seen as important, it was often framed as a way for customers to get more bang for the buck – not as a reduction in total spend. MSPs reported that their clients typically have annual budgets that MSPs can spend on their behalf across all cloud or IT services. Therefore, staying within budget across all services was the primary goal, but any dollar saved on cloud compute services could then be put to work in other areas of the business. This keeps the end user satisfied by giving them more value per dollar, and the MSPs satisfied by providing more, and stickier, services to their customers.
In addition to cost savings, MSPs want to deliver productivity gains to clients. This can be done by directly implementing solutions on clients’ behalf. Increasingly, however, MSPs prefer to put tools in place that their clients can then use to optimize their own cloud infrastructure. Although many small businesses don’t have the technical expertise necessary to migrate their technology infrastructure to the cloud, once they are up and running, they are often able to self-manage parts of their own infrastructure.
As one MSP recently said to us, “we could probably write custom scripts for our customer to turn things on and off, but that really doesn’t scale. To be honest, I think they would prefer controlling their own environment”.
We know from our own experience that a number of our clients use ParkMyCloud as their go-to tool for scheduling, managing and reporting on their EC2 usage.
The Key to MSP Success in the Cloud
As the role of the traditional MSP continues to evolve, the most successful providers increasingly seem to understand that :
- helping customers optimize their cloud spend is important; and
- providing customers with self-service tools to better self-manage their own cloud environments is key to sticky customers.
Although there will be many goals against which MSPs and cloud consultants are measured, it seems clear that reducing/optimizing cloud spend and empowering customers with the right tools to manage cloud are two side of the same coin and key for MSPs to succeed.
Managed Services Face Uncertainty Over Cloud. http://blogs.wsj.com/cio/2016/06/30/managed-services-face-uncertainty-over-cloud-report/