MSPs and Cloud Computing: How to Evolve for Success

By Pedro Pereira 1

A period of upheaval is on the near-horizon for MSPs, and it’s going to be especially hard on providers overly focused on technology. They must adapt by shifting their focus to delivering business solutions, and seek opportunities in cloud and virtual desktop services.

“I think there’s going to be a lot of casualties over the next three to five years in the MSP space, and primarily it’s because many MSPs today have been started by technologists,” Tommy Wald, president of TW Tech Ventures in Austin, Texas, said in a recent interview with MSPmentor.

While these MSP technologists have run their businesses well, the market is shifting and they must adapt to cloud-based models that require skills geared more to business than technology Wald said. “Many guys are going to get caught flat-footed. It’s hard to transition to that kind of consulting role.”

Wald is a mentor and consultant to IT service companies, advisor to vendors, and an angel investor in technology startups. If anyone knows and understands the managed services space, he certainly qualifies. Wald was a managed services pioneer as president and CEO of RIATA Technologies, a company he sold in 2010. Wald is also one of MSPmentor 250 Hall of Famers.

Cloud is a catalyst

In managed services, you can still function primarily as a technologist, concentrating on the remote delivery of monitoring and management services. But Wald points out that cloud solutions require a different skill set – one geared to helping clients with business workflow, integration and the federation of various systems and services.

The cloud, Wald said, is the catalyst in the coming transformation of the MSP. Providers have to figure out how to weave cloud services into their offerings, either by focusing on specific market verticals such as healthcare and banking or by specializing in a technology. For instance, a provider could build a practice around Office 365 migrations for SMB clients or launch an EMR (electronic medical records) hosting service for doctors, hospitals and clinics.

Hybrid cloud

These types of opportunities will allow MSPs to evolve and strengthen their value proposition to the client. “The ones that aren’t evolving are the ones you will see maybe starting to struggle a little bit,” Wald said. “The old MSP model is becoming more and more irrelevant.”

Like it or not, client networks are evolving into hybrid environments as businesses add cloud services one by one. Thankfully MSPs have some time to adjust because the move is gradual, but they shouldn’t wait too long.

Desktop as a service

Besides cloud services, Wald believes another sizable opportunity for MSPs is desktop as a service (DaaS). As broadband connections become more affordable and available, he believes they’ve created the tipping point for viable DaaS solutions that leverage virtualization and off-site data storage for computing.

DaaS replaces desktop computers – and even notebooks – with thin clients to facilitate the concept of “anytime, anywhere” access from any device to optimize mobility. Wald sees a role for MSPs as telco agents who collect a commission for the broadband service that supports DaaS.

While the impending managed services upheaval may seem frightening, it doesn’t have to be. The IT channel has a long, storied record of reinventing itself, forcing companies to adapt and embrace new ways of doing businesses.

MSPs that evolved from break/fix VARs already have experienced some of these cycles. They, better than anyone, should understand how critical it is to adapt to a new industry reality. The only alternative could come down to closing your doors.

Pedro Pereira is Massachusetts-based freelance writer with two decades of experience covering and analyzing the IT channel and technology. He can be reached at [email protected].