MSPs See New Opportunities in Cloud 2.0
The digitization of business and the accelerated pace of change in technology innovation is creating change on a massive scale in every industry. This means enormous opportunities for managed service providers whose primary sales proposition is hiding complexity for their customers and making it easier for them to consume technology.
Virtualization of this, software-defined-that, and just-about-anything-as-a-service cloud models may have disrupted the old hardware infrastructure channel, but for those forward-thinking MSPs that embraced the cloud, there’s a lot to be excited about.
1. The cloud has gone mainstream
The great migration to the cloud has industries of all types taking advantage of the cloud’s economies of scale, flexibility, and agility. The cloud computing market is expected to grow at a compound annual growth rate of 21%, according to a recent report by IDC, with spending on public cloud services and infrastructure projected to reach $266 billion by 2021.
This migration to the cloud represents a seismic shift in how IT services are purchased and delivered. IT budgets for on-premises hardware and software implementations, as well as for IT talent, remain flat or shrinking as “cloud first” policies become the norm–especially in small and midsized businesses. These trends will generate enormous opportunity for those MSPs that are prepared to take advantage of the change.
2. Cloud storage is ready for some serious disruption
First-generation cloud services were all about compute, and cloud compute performance far outstripped the performance of cloud storage. From a cost ROI perspective, there really hasn’t been a compelling reason to migrate on-premises data to the cloud in any meaningful way. The cost of on-premises storage and first-generation cloud storage is virtually the same. Our CEO, Dave Friend crunched the numbers in a recent post comparing AWS S3 costs with on-prem storage.
With the introduction of cloud storage 2.0 technologies like Wasabi hot storage, cloud storage performance has finally caught up with that of compute (Wasabi is 6x faster than Amazon S3). And that’s not even the big news. With the commodity pricing of Wasabi hot storage (1/5th the cost of S3), organizations with expensive and aging on-premises storage now have an incredibly low-cost alternative in the cloud. This alone will create incredible opportunities for MSPs in the storage, backup, and disaster recovery space to substantially grow their businesses. With an estimated 70% of all data still stored on premises, the second great migration to the cloud may be bigger than the first.
3. Multicloud and hybrid cloud management
MSPs are in a great position to provide cloud integration and management services, offering a management layer between the enterprise, the public cloud, and any assets running at the MSP. Many businesses will use a combination of multiple public clouds for different applications while optimizing their on-premises infrastructure for other mission-critical business. The MSPs that can help companies manage these complex, hybrid environments, control costs, and make recommendations for moving workloads to maximize performance and investment will be set up well for the future.
4. Industry-specific and compliant solutions
Most public cloud providers don’t focus on any one specific industry. This leaves a lucrative opening for MSPs, systems integrators, and independent software vendors (ISVs) to build cloud-based services that are more in tune with the unique processes and compliance requirements of specific industries such as healthcare, law enforcement, education, or media and entertainment. As industry and government regulations for data protection and privacy grow in number and complexity, so do the niche opportunities for MSPs.
5. Hot cloud storage means margins, margins, margins
MSPs that already combine their services with storage–either from their own data centers or through the public cloud– can realize tremendous cost savings by switching to cloud 2.0 storage solutions like Wasabi hot storage.
If you’ve stayed with me so far, you might be wondering why Wasabi even needs a sales force. At 1/5th the cost of Amazon S3 with 6x faster performance, the value proposition is compelling if not downright astounding. However, some MSPs I talk to have a hard time wrapping their mind around the fact that there is no special pricing. But if you think about it, when you’re 80 percent lower than the nearest competitor, it’s all special pricing.
When you bundle Wasabi hot storage with your solution, there is plenty of margin to go around. You can lower your pricing to gain share in a competitive market, increase your own profit margins, or both. See how one MSP did exactly that with their Cloudberry Lab Backup solution.
Contact us if you would like more information on how Wasabi can help your managed services business or would like to set up a free trial.