Gold rush for Managed Service providers
October 2018 by Yasser Zeineldin, CEO from eHosting DataFort
Cloud computing is the underlying platform for successful digital transformation and is both an opportunity and challenge for Managed Service providers, explains Yasser Zeineldin, CEO from eHosting DataFort, a provider of Managed Services, Cloud Infrastructure and Managed Hosting in the Gulf region.
The rush to the Cloud is adding a layer of challenge in an already overloaded and overcharged digital transformation environment. Major Public Cloud service providers like Microsoft, Google, AWS, release close to 50 new features every month, according to global consulting firm Gartner. An average enterprise may require only a handful of new cloud features every month, throwing a challenge to them on how to best select the few suited for their business.
On one hand, this pace of innovation is refreshing and allows the best of breed to come forward. On the other hand, the sheer pace of change and rate of transformation taking place up front, opens up the opportunity for Managed Service Providers to provide trusted advice and services around Cloud computing for their end-customers.
Across the region, small and medium enterprises are beginning to embrace various aspects of digital transformation, whether Cloud or mobile or data driven. However, there is no doubt that embracing Cloud Computing remains the basis for large scale and successful digital transformation. Cloud provides the underlying platform to successfully build new business models and enable a new generation of mobile ready customers to come on-board and receive new customer experiences.
So important is Cloud Computing and Cloud technologies for businesses, that the number of Managed Service Providers providing Cloud related services will triple globally by 2020, according to Gartner. Traditional IT services that have always been the backbone for financial sustainability of professional service providers, will be overshadowed by the growth of Cloud related services, that can be delivered by Managed Service Providers. This is a huge opportunity for Managed Service Providers to grow their wallet share in coming years.
However, like many reality checks, the emerging gold rush to the Cloud, where IT decision makers are opening up budgets to spend, also includes a priority list of what to do first and a number of questions. Managed Service Providers may be asked a variety of questions by their end-customers. How do we migrate our data to the Cloud; which applications should we use from the Cloud and which should remain on-premises; what is the timeline and decision matrix for any migration to the Cloud; which applications are best suited to be Cloud native and which ones need to follow a lift and shift approach; what will work best for me - Public or Private or Hybrid, amongst others.
For Managed Service Providers, being ready with answers and well tested services, is critical for the them to leverage the gold rush to the Cloud. Managed Service Providers need to be well trained and prepared for migration to the Cloud, have ready with them preplanning and consulting services and optimal pricing models. They need to be closely aligned with their end-customers and must be fully aware of the decisions being taken by them on what should be Cloud-ready, Cloud-only, and Cloud-first.
No single Managed Service Provider can provide the full range of Cloud Computing services for their small and medium enterprise customers. For this reason, Managed Service Providers also need to actively build their role as Cloud brokers, where they are well versed with what is available, how to onboard and how to offer. Onboarding of Cloud services already accounts for more than 15% of IT Cloud spending. By being part of this onboarding service as Cloud brokers, Managed Service Providers can continue to expand their role as trusted advisors for their end-customers in their Cloud transformation journey, right from the onset.
Another critical area for Managed Service Providers is to be well aware of the required business outcomes linked to various digital transformation journeys within their end customers. By being proactive of what is expected by business decision makers, and by building suitable competency as Cloud brokers, Managed Service Providers can stay ahead of end customer expectations and ahead of competition.
The gold rush to cloud will also draw in additional competition, growing by a factor of three times by 2020. Differentiation and suitability of offerings for end-customers, depending on their business size and vertical markets, will also help managed service providers ride out the next phase of shakeout and consolidation.