In the March 2017 cover story of ITPV, we spoke about the new opportunities and challenges for channel partners with the ever increasing adoption of cloud based computing. In this issue we take a closer look at a related topic for channel partners – managed services.
Managed services today is vastly different from how we understood the term a decade ago. We spoke to some of our readers who are managed service providers (MSP), and they all agreed on the statement that today, it is not about just managing services, but what else you can do alongside – the value add, is what defines the role of an MSP.
‘Internal IT’ and IT maintained and managed by an MSP on behalf of the customer, is increasingly moving to cloud, amongst businesses of all size and across domains. It is only natural that the ones who were earlier managing such IT infrastructure and services become managers of the new cloud services. One can even say that traditional MSPs have been forced to manage cloud services for their customers. There’s simply lesser and lesser of internal IT or customer-side data center components to be serviced.
It’s MCSP now
A somewhat recent term, ‘Managed Cloud Services Provider’ (MCSP) aptly describes this new role for MSPs. However, one wonders whether or not the two terms will mean anything different from each other in the near future, when cloud becomes even more ubiquitous.
According to a study by CompTIA (The computing Technology Industry Association), over half the companies surveyed in the US employed an MSP for managing their cloud-based services within the last year. The same survey shows this number is expected to grow. The numbers for India are expected to be similar, since the cost and agility benefits are similar across geographies. The lowering bandwidth cost in India also contributes to greater acceptance of moving to cloud.
Role of a service provider
A cloud service too needs to be managed – best practices for security and disaster recovery implemented, compute and data requirements adequately chosen balancing between performance and cost, etc. This is where a managed cloud service becomes relevant.
In the words of Jitesh Chauhan, Director, Rubik Infotec Pvt. Ltd., “The Industry is still not confident on deploying the cloud solutions with their internal resources. They would ask managedservice providers to provide the services.”
Customers can avail all the benefits of cloud computing, without the having to worry about how to go about it – the same way businesses earlier outsourced the management of their own IT to the MSPs of those days.
Varoon Rajani, CEO, BlazeClan Technologies, says, “It’s an exciting time for everyone involved in the shift to the cloud, and the role of the next generation Managed Services Provider has never been more important. The cloud gives MSPs the ability to provide more to the customer than associated with managing data centers and ubiquitous IT services.”
Understand business, not just tech
Businesses can begin to treat entire gamut of the cloud services they use as a ‘black box’. They need not worry about how it works, or how to manage it. They can have the confidence that a certain performance will be delivered. For example, a startup e-commerce website can be assured of their website supporting a minimum assured number of concurrent users, and that their customer’s details are secure. It is their managed cloud service provider’s responsibility to ensure that such performance is guaranteed from the cloud service.
Ashish Kothari, Head DevOps and Managed Services, BlazeClan Technologies puts it as follows: “Era to look beyond data centres has initiated the beginning of embarking cloud MSPs. Next generation MSPs will not only help business scale new heights but also make their journey exciting and meet goals in agile way. As a premier AWS partner we have helped clients from various domains for exciting cloud journey. Our capabilities have helped them to meet business requirement with cutting edge skills and deep experience in MSP. This has enabled us in making long term relationship with our clients and business houses.”
For MSPs to land such opportunities and jump to becoming MCSPs, it is critical to understand their clients’ / potential clients’ business. The cost benefits of using a specialized service provider are well understood. The pitch to acquire a deal has to go beyond that. Jitesh Chauhan, Director, Rubik InfotechPvt Ltd., says customers are now more educated on what services MSPs provide, and hence expect more from their managed cloud service providers.
One needs to talk the language of the customer’s business and impress upon them the benefits for their core operations can be benefitted. In the above example, it isn’t sufficient to talk specifications, but explain how in their specific environment, a certain savings can be unlocked, and certain end-user (their customers) experience can be enhanced.
Typical challenges faced by managed cloud service providers revolve around:
Infrastructure efficiency / Data center
Sizing one’s cloud infrastructure just right is key to maximizing savings, which is one of the main drivers to take to the cloud in the first place. Over-budget and you are wasting monies that could go elsewhere, under-budget and you risk temporary outages.
The old challenges of data center efficiencies around cooling, space, and power are still relevant for those who wish to provide cloud services using their own data centers.
Customer centric and skilled manpower
One of the main motivators for customers to work with a managed cloud service provider rather than doing it in-house is manpower. It is therefore critical for the service provider to have a team of motivated and technically skilled personnel who are also customer service oriented. Such teams are highly specialized and they can be the differentiator between MSCPs who keep customers happy and those who fail to.
Understanding customers’ business
As mentioned earlier, the starting point for adding value to a customer is understanding the business of the customer. Only then can one find technology solutions (be it cloud services or otherwise) to solve customers’ pain points. In that sense, the service provider needs to also become a business analyst.
Demand for Professional and Managed Services Will be Accelerated by the Desire for Better Security Outcomes, IDC Reports
IDC Asia/Pacific reports that the security services market in the Asia Pacific region excluding Japan (APeJ) reached US$4.23 billion in 2016 and will grow at a compounded annual growth rate (CAGR) of 20.5% between 2016 – 2010.
This market update was published recently in the report IDC Market Analysis Perspective: Asia/Pacific Security Services 2016 Update. The report also highlighted that among the different security services segments, managed security services accounted for 37% of the total market in 2016, or accounting for US$1.58 billion. The managed security services segment is expected to reach 3.86 billion in 2020. IDC believes the rise of professional and managed security services will be driven by the desire for better security outcomes and resilient security posture for organizations. In addition, other security services segments such as incident responses services, cloud-hosted security services will be high growth areas as well.
“These are challenging times for security professionals given the greater urgency for businesses to address cyber security. As organizations transform their organizations to be more digitally-enabled, they will fundamentally alter their enterprise technology and process architectures, data value chain, and risk appetite. These changes in turn create new security challenges which organizations have never faced before,” says Cathy Huang, Senior Research Manager for security services, IDC Asia/Pacific.
The IDC Market Analysis Perspective: Asia/Pacific Security Services 2016 Update also highlights commonly used services level agreement (SLA) metrics in managed security services engagements, and key advices when it comes to developing SLA metrics in security services engagements. “While it is critical to maintain the key SLA metrics focusing on availability of security infrastructure and efficiency in response times, organizations should also develop or at least have the attempt to develop a small number of intuitive SLA metrics that carry obvious impact to business outcomes,” adds Huang.
IDC recommends leveraging external trusted security services advisors is a viable option for most organizations in APeJ since sourcing and skilling of suitably qualified individuals is highly challenging even for large organizations.