By Dave Zwicker
It’s no wonder that many MSPs are wary of moving to the cloud; it's fraught with complexity and risk.
Consider this: When MSPs consolidate expensive, underutilized, on-premises servers into a highly efficient and cost-effective public cloud service with a usage-based fee structure, their dependable recurring revenue stream from remote server management goes down and could go away. The same scenario exists for remotely managed desktops migrating to a hosted virtual desktop service, etc.
Fortunately, if you are an MSP willing to adapt, there’s an opportunity to thrive in the new cloud-based IT economy. To succeed, you must plan your cloud business transformation around three Critical Success Factors.
Critical Success Factor 1: Build a Cloud Business Growth Plan
What is your cloud business model? Are you a broker or reseller of cloud services earning a commission on SaaS licenses and virtual resources? Or are you a hoster with your own virtual data center and hosted services? The most popular model for an MSP is to add business value to the cloud with customized solutions for specific market segments.
Choose your business model carefully and then create a financial model that allows you to set growth targets and project your revenue trajectory. Be sure your financial model includes the average customer contract value as well as all sources of one-time and recurring revenue along with the expected rate of customer acquisition. How big will your business be in three to five years? What level of investment is required to drive revenue? What blend of services is required to equal the value of an average deal?
Critical Success Factor 2: Create High-Value Solution Bundles
Your cloud-based solutions must offer compelling business value for the customer while generating a profitable revenue stream for your firm. Bundle high-value professional and managed services with commodity cloud services. Start by incorporating these high-demand cloud services into your portfolio:
- Unified communication and collaboration
- Mobility solutions (including BYOD)
- Hosted business applications (SaaS and VDI)
- Virtual IT infrastructure (IaaS and PaaS)
- Security and business continuity (backup and disaster recovery)
- Hybrid IT environments (public and private cloud)
Then add value by wrapping professional services around them. Some services are in the form of consulting projects while others are ongoing managed services that help customers maximize the value of the cloud. Examples include: