Businessman walking on the money stairs with sky sunlight cloudscapeThe cloud is here to stay. Enterprises both small and large are moving to cloud-based services en masse. This migration to the public cloud has created additional revenue pressures on Managed Service Providers (MSPs) as they look for new ways to add value on top of commoditized infrastructure. To add this value, MSPs must differentiate their offerings by providing additional services, including the assessment, design, automation and optimization of their clients’ applications and services.

Consuming IT infrastructure as software has never been easier. The hosted Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) marketplace has become crowded and confusing, with many new entrants and services during the last few years, offering a dizzying array of new choices for customers. For the past several years, large cloud service providers (CSPs) with deep pockets have sought market share, leading to head-to-head price wars over IaaS services, such as disk, compute and storage. The cost savings promised by these CSPs, the need for rapid innovation and the agile development movement have all greatly accelerated the transition of applications into the cloud.

Large systems integrators (SIs) are also getting into the game, approaching the problem from a different angle. They are leveraging their relationships with large enterprise customers to both advise them on how to transition their infrastructures to the cloud services, as well as offer those cloud services where needed.

Increasingly, MSPs will need to steer clear of the undifferentiated and commoditized services that are being offered by the larger CSPs, and work toward building the customer relationships enjoyed by SIs. Nevertheless, the opportunity for MSPs is definitely there, if they develop compelling and innovative services relevant to their customers and strike while the iron is hot.

As an MSP, how do you create a new and unique offering in 2015?

One way that MSPs can add value is by bridging the cloud gap and providing a seamless experience, regardless of the underlying infrastructure – public, private, and/or hybrid cloud. For example, allowing customers to use the same “click” flows to provision new services, no matter which underlying cloud platform is being used.

MSPs can also add value by finding a balance between strong governance and user self-service. Customer applications need to be highly available, secure and governed by strong policies – end users need the autonomy to provision and access their applications at will. If MSPs can create environments with guardrails (i.e. security, cost visibility, actionable reporting), where users can flourish, then customers will beat a path to their doors.

Successful new services are best developed when they take into account client needs and requirements. The #1 item on the IDC Predictions 2015 is hybrid cloud adoption. Enterprises are quickly adopting hybrid cloud solutions, which are widely recognized as a major source of growth to come in 2015 and beyond.

MSPs know private cloud (e.g. VMware, OpenStack). Now, MSPs need to extend their management to the public cloud (e.g. AWS, Azure, Google). Centralizing the administration of a multi-cloud environment helps drive down internal costs and provides the platform for future revenue growth.

Here are five things to demonstrate today to differentiate your offering:

    • Discovery and centralization of all cloud services your customers are currently using (public and private).
    • A self-service user portal with access to multiple public, private and hybrid cloud services.
    • The capability to provision cloud and non-cloud services from a centralized marketplace, including your in-house solutions.
    • Cost allocation and chargeback from heterogeneous cloud environments back to projects, groups and users.
    • Actionable reporting and alerts to help your customers control costs and optimize their spend.