Cloud Computing Will Kill Managed Service Providers: True or False?

Gordon Tan, President, Sales, Adventus Singapore

Gordon Tan, President, Sales, Adventus Singapore

Years of evangelism have finally bore fruit:Cloud computing has seen an exponential adoption rate many an enterprise, who have migrated part of or even their entire IT infrastructure to the big Cloud. This is no surprise, as tech big boys Google, Amazon and Microsoft, among others, continue to invest top marketing dollar to propagate the value of the Cloud, and yet set affordable prices such that the Cloud looks like the only financially viable option for any organisation.

With cloud computing soon to conquer the mainstream market, the big question arises: Will it kill the businesses of Managed Service Providers (MSPs), which many organisations currently outsource their management of end-to-end hardware and software support on contractual basis?

"Emergence of the Cloud and its booming adoption rate can open up new business ventures for MSPs"

While it will certainly disrupt such services, I don’t believe the looming Cloud will completely enshroud MSPs. Why?

To put things to perspective, let’s return to the drawing board: What does Managed Service Provider mean, exactly?

According to Gartner, “A managed service provider (MSP) delivers network, application, system and e-management services across a network to multiple enterprises, using a “pay as you go” pricing model. A “pure play” MSP focuses on management services as its core offering.”

By this definition, the traditional offering of an MSP to recommend hardware and software, as well as the services to implement both, will definitively be blown away from the Cloud. Thanks to the abundance of Infrastructure as a Service (IaaS) choices, the need to buy new servers and storage hardware is severely diminished. They can easily engage an IaaS provider to rent usage access at a fraction of the acquisition cost.

However, these IaaS providers face one challenge: They require the IT skills required to migrate data from traditional hardware to the Cloud, and also the ongoing capacity performance measurement to cater for necessary business growth. This is an opportunity for MSPs, who can help plug the gap by assisting migration and ongoing management of Cloud resources.

The situation too applies to Software as a Service (SaaS) providers: Though organisations can readily sign up for software application on the Cloud via SaaS providers, the integration and management of these applications will still be a challenge for users, what with ongoing database amendments, such as the addition and deletion of employees’ login or email accounts. To assist with these matters is not far off the role MSPs currently actively perform: implementation and ongoing management.

Therefore, contrary to the belief that MSPs will be eliminated by cloud computing, the emergence of the Cloud and its booming adoption rate can open up new business ventures for MSPs. It is only up to these service providers to redefine their business model from one that pushes hardware / software application sales and maintenance, to one that plays a complementary role alongside the Cloud, in integration and management.

Most importantly, an MSP should always take the strategic role of partnering the CIO in any organisation to complement its IT strategy, developing a clear set of control policies, performance management and continuous IT improvement to support the ongoing business growth of the organisation.

Though many predict grey skies for MSPs, there remains a silver lining in the Cloud: Should an MSP stay ahead of the game by morphing their business to incorporate, facilitate and supplement cloud computing, survival will be ensured, and MSPs will continue to play a vital role.