It's only natural for IT support companies to be wary of cloud technology as it replaces aspects of their hard earned livelihood. But the reality is there's plenty of money to be made by smart companies who choose to embrace and ride the wave.
Not too long ago, we wrote about the return of the IT guy which discussed making the most of the cloud trend. Just recently, Robin Robins has added more to the debate in an excellent piece on IT Channel Insight which outlines where the money is to be made in the IT support industry.
(image credit: 401 (K) 2012)
An incredible, history-making moment happened in the IT industry recently. Microsoft released the beta version of Office 365, marking the beginning of the end for managed services providers who make their living off reselling, installing and supporting expensive servers and workstations for small businesses.
In my community of MSPs, there are a lot of mixed feelings about this. Some see this cloud revolution as a huge opportunity to position themselves as a “cloud integrator” and to develop a new strategy for making a lot of money helping clients move to a cloud-based platform. In fact, many are making more profit selling these solutions over the traditional MSP services.
Others who are resisting this revolution are largely in denial. They tell themselves that the change won’t happen that quickly, that Office 365 isn’t all it’s cracked up to be, that cloud computing won’t work for everyone, and so on. While there is some truth in that and, yes, there will be a period of hybrid networks, there’s no doubt in my mind that the writing is on the wall for any IT company that makes its living installing and supporting “traditional” networks.
Here’s why: businesses want solutions, not technology. Infrastructure, hardware, servers, connectivity and mainstream applications are not strategic investments for the average small business; they just want to acquire them as cheaply as possible. And now that they can avoid many of these costs altogether with cloud computing, it’s becoming a no-brainer.
Think about it: if one of your clients could get rid of their server, software, workstations and ALL the complexity and costs involved in keeping everything running – and could outsource this to the cloud, significantly cutting their costs –why wouldn’t they?
[pullquote]Connectivity is exploding and almost every software company I know is moving to a SaaS model.[/pullquote]
Yes, I know that some businesses are concerned about connectivity and security, and not all line of business applications will run in the cloud. But seriously folks, connectivity is exploding and almost every software company I know is moving to a SaaS model. It’s only a matter of time before this becomes the way all businesses operate – and if your business is dependent upon making money installing and supporting the traditional network, the value you bring is diminished significantly.
So what should you be doing NOW to transition your MSP business? For starters, you should be investing a lot of time into understanding wide-area networking, cloud architecture, security and technology. A good exercise would be to move your company’s network to the cloud to get some first-hand experience.
I also think you need to start asking yourself, “When the MSP model of clients paying us $100 per workstation and $500 per server to support their network goes away, where will we provide value and get paid?”
