Part One of a Four-Part Series offering guidance, hope and solutions for MSPs and VARs who are struggling to make money in the cloud.
One of the core pieces to building a cloud strategy for an MSP is the selection of services. There are hundreds of cloud-based services available, and deciding which to offer can be confusing—let alone selecting service providers. From my position as a solutions architect and partner at MG Technology Group, I am fortunate to work with MSPs across North America and have put together some useful information to help you through this process.
Boiling Down the Core Services
There are three core services that every MSP should have available in their cloud offering:
• E-mail is one of the easiest cloud services to sell, and will make sense (at some point) for 99% of customers and prospects. Through SBS, many small businesses have been using enterprise e-mail via Exchange for some time. The demise of SBS, aging hardware, licensing costs, increased complexity and maintenance costs all make moving Exchange to the cloud a sound business decision. There are also still an astounding number of businesses using POP3 or IMAP where Exchange will bring much-needed functionality to their organization.
Margins on e-mail continue to fall. We joke that it will eventually be free (and that may happen). However this is such a critical service, great ROI (return on investment) and helps to keep your customers “sticky”. There is also good margin in migration from on-premise to the cloud or cloud provider to cloud provider—more on this in another Cloud- Speak column later this year.
• Backup has always been a fundamental function of IT—some say it is the most important function. With the advances in bandwidth and other technology, MSPs have the ability to provide comprehensive backup locally and off-site. There are also many different options available, including the ability to do restores to cloud servers which, with careful planning, can be a significant part of a comprehensive disaster recovery plan. Margin on cloud backup has several different components depending on the service provider and solution you select. These may include software that is installed locally on protected machines, cloud storage, bandwidth usage, recovery “drills” (testing restore/failover), failover, additional cloud components to augment failover in the cloud, and more. It is well worth shopping around as you will find a great deal of variation in pricing and features.
• The third core service is document storage. Being able to store documents in the cloud means they are centrally available to the organization’s employees and can also be made available to contractors, vendors and customers. It reduces the need to e-mail files back and forth, provides a master copy of files (e.g. “one version of the truth”), can reduce or eliminate VPN usage and increase productivity by making files available to those who need them from wherever they are.
I strongly recommend looking at a collaboration platform or content management solution - more than just document storage. Content management solutions can provide advanced functions like version control, workflows for document routing/business process automation and multiple methods for interacting with documents and storage.
Collaboration platforms extend this functionality even further adding the ability to store information beyond documents (e.g. calendar items, tasks, project information) and to create solutions that include various features (even content) put together for specific business uses that need to be repeated. For example, solutions for a law firm might include case intake, jury trial or contract negotiations.
Where the Profits Are
The most profitable services we see are centered on moving applications into the cloud. These include ERP (Enterprise Resource Planning) or accounting software and cloud servers. From QuickBooks to Microsoft Dynamics, ERP solutions accounting software is in use at every organization. These applications are generally mission-critical for the organization and touched my multiple employees. The margins on using these as a cloud service tend to be much higher than the core services I listed earlier in this column.
Many organizations also have other line of business applications that can be moved to the cloud by working with a cloud provider who offers cloud servers. These allow many line-of-business applications to be moved to the cloud as easily as moving the solution from one server to another. The benefits can be reduced capital expenditures (no need to buy new hardware or OS licenses), high availability, enabling users secure access from anywhere (unlocking the application to mobile users) and even making the application available cross platform (e.g. a Windows application running on a Mac).
Join me in the Q2 issue in which I will use this column to discuss ways to sell and position cloud services to maximize margin and salability.
Grant Thompson is a founding partner of MG Technology Group, a leading cloud services company. As a solutions architect with a diverse technical and business background, Grant helped build MG Technology Group on the premise that businesses need solutions that fit their unique needs and IT professionals need a service provider they can trust.
