Even if an enterprise is ready, there is buy-in from the executive leadership and LoBs, and the IT team is on board– moving a whole data center (or parts of it) to the cloud is a challenge. Being able to commit to this path and quickly adjust to the resulting changed environment isn’t as simple as making a decision; it requires strategic planning, investment and most importantly, commitment.
Enterprises such as GE and Capital One were early to recognize the Amazon cloud value, and they have managed to keep up with the pace of rebuilding their whole IT infrastructure. More enterprises have followed and will continue to. In order to support these enterprises on their cloud journey, traditional IT managed service providers need to realize the significant business opportunity that waits. If they do – by adapting their approach to accommodate cloud-focused IT systems rather than continue being integrators and resellers of physical infrastructure – they will surely benefit rather than be left behind.
Gartner reported earlier this month, however, that “through 2018, the cloud managed service market will remain relatively immature, and more than 75 percent of fully successful implementations will be delivered by highly skilled, forward-thinking, boutique managed service providers with a cloud-native, DevOps-centric service delivery approach.” Gartner’s statement is actually good news for traditional MSPs because they are describing a growth opportunity that most MSPs will not take advantage of. However, you can; if you haven’t already. If you’re an MSP already making the transition to cloud, this article will help you consider whether you’re optimizing the opportunity.
Data Center Consolidation and Modernization
Data center infrastructure is transforming. CIOs, therefore, would be wise to evaluate their organization’s current needs while staying on top of technology trends and their economic implications. CIOs already feel the impact of their costly, rigid worldwide data center (DC) infrastructures. They now want to build a flexible virtual infrastructure where automation and “software-defined” layers are important enablers for their second-generation DC.
To that end, your existing customers will likely reach out to you to ask for your help in developing and executing their cloud plan. However, modernizing their infrastructure will not happen in a day. Enterprises understand this reality and will appreciate your efforts to support them and do so with care for their strategic needs.
Start by learning their data center challenges. Is it a data center refresh? Or, is a lease expiring? Understand the value of the customer’s current data center(s) and the purpose of each specific resource stack so you can adequately plan for which can and should be migrated to the cloud. For each of your customers, you’ll also need to advise on where the data centers should be located (on-premises or off), and recommend which should be owned and which would be better outsourced. Don’t forget to consider business continuity and security.
At the start, you should support your customer by running pilots, but keep in mind that your customer will eventually want to see a significant amount of resources move to their clouds.
Their interests revolve around addressing immediate needs: optimizing costs and enabling efficient design. They want a software-defined data center and hyper-converged solutions that will, for example, support build-out of their modernized data centers (i.e., incremental addition of one rack at a time).
The Cloud Migration Project
Part of your out-of-the-box “data center modernization” plan for your customers will include their public cloud installation. Again, start by asking the right questions: Which applications do they want to start with? Why? In response, you should be able to recommend to them one of Gartner’s five cloud migration methods. Choosing the right method should be in line with the customer’s short-term and long-term business goals.
Avoid lengthy pilots and strive to demonstrate value in any migration you plan and implement. Even with a small pilot deployment, you should start with a blueprint design of the cloud environment. The blueprint should include all the building blocks, the network topology and services segmentation. The architecture and plan you provide should show the customer the actual values of the migration, such as reduction in infrastructure costs. However, exhibiting these can be tricky if you don’t leverage the scale of the public cloud and ensure the infrastructure footprint changes with demand (such downsizing resources with demand). You should be able to design your customers’ clouds by implementing both your own best practices and the cloud vendor’s (e.g., Amazon and Azure).
Scalable and Efficient Operations
When it comes to deployment and operations, the MSP must show not only expertise but also the ability to work at scale. With the public cloud, you will be able to leverage API-enabled automation, and you should, both when it comes to running your data center and managing your customers’.
In addition to the cost reduction value mentioned above, fast and efficient deployment is an important managed service you should provide and a value your customers will seek when engaging you to manage the migration for them. You should also be able to automate deployment and management both on-premises and on the public cloud utilizing, for example, AWS APIs and Infrastructure as a code (IAC), as well as template tools, such as Cloud Formation and Terraform.
More and more these days, enterprise leaders are pushing their IT and R&D teams to explore and adopt DevOps. They will want their MSP to have the same skills. In fact, the two tools mentioned above, as well as IAC, are offerings the MSP must use to demonstrate the use of DevOps tools and processes. For that matter, according to the above mentioned Gartner report, you might want to take the site reliability engineering (SRE) approach — designing an operations team that is responsible for creating and maintaining a highly scalable and robust cloud system.
Taking Full Advantage of the Broker Opportunity
As a key player in getting the enterprise into the cloud, the MSP is a type of cloud broker. This means that you need to be the “cloud hub” for your customers, consulting them on not only what needs to move, but to where it should be moved, considering uptime and compliance rules of the workload. You also need to consider the capabilities of each infrastructure option you have in your “services menu.”
To be a true hub, you should partner with all the major public cloud providers, especially AWS and Azure, educating your staff and consultants on how to use each, with the eventual goal of employing or contracting with formally certified cloud architects and experts. Acquiring the skills – and empowering your staff to do so– will put you ahead of your competition. Soon you will be the expert your enterprises are seeking, who they trust to help with the decision of which public cloud to use, or whether they need to keep the running steady workload on-premises under your umbrella. Also, make sure you have a solution to the compatibility issue between these totally different environments.
Once you have become your enterprise customer’s trusted advisor, leading migration and integration projects for them, you can move on to the next step — becoming a reseller and enjoying a constant additional stream of revenue.
In the reselling position, you will be able to negotiate volume discounts with even the major leading public cloud vendors. Some of the discounts will have to be transferred to your customers as your own added-value and some will be kept on your side, making your position even more important than the cloud expert. Your new function as a cloud financial organization will create both additional opportunities and challenges, though. You will be able to gain benefits from running cost optimization processes across your customers’ clouds through long term commitments, but you will need to commit and show your customers a cost efficient software-defined hybrid and cloud configuration.
Reinvent Your Business
Reviewing the above, you will notice an important pattern: you need to develop a strategy that will make you a dynamic, fast, and modern IT organization, similar to the type your customer’s IT team wants to be. But you need to be ahead of the game, as well on top of your own organization and infrastructure.
In summary, the three main considerations for you, the MSP, to reinvent your business and revenue strategy are:
- Infrastructure: Consolidated virtual software defined data center
- Management: Efficiency and automation are critical
- Business: Become a broker and a reseller
Change is never easy, but implementing these steps will create a robust MSP business that will last for decades to come.