Australia's managed service providers wrangle cloud vendors

Be the buyer’s agent, not the seller’s

Everyone CRN spoke to was unanimous in how customers should approach moving to consumption services. They must start with understanding their own needs.

“There’s not a one-size-fits-all approach to servicing customer needs,” says Chris Levanes, director of cloud and hosting, provider CenturyLink Asia-Pacific. “Customers are increasingly turning to vendors that can help them in many areas, rather than having a multi-vendor strategy.”

As experienced practitioners will recognise, customers often struggle to understand their own needs, so there is an opportunity for providers to educate customers on how to determine if a solution is a good fit. 

Cloud services can be challenging to understand – AWS added more than 500 new major features in the last calendar year alone – so being able to help a customer navigate the options and figure out which ones best match their needs is one way a service provider can demonstrate value.

And this is where the dynamism of the cloud world can work in an MSP’s favour. “You have to earn your keep every month,” Bulletproof’s Randall says, “but there are always opportunities to do so, because there’s so much change, development, advancement and so on.”

For those looking to quickly add consumable cloud services to their list of offerings, partnering with those who already have the skills – such as several vendors featured here – is a great way to avoid the pitfalls and start delivering additional value to your customers.

Ultimately, there’s no one right answer, because each method of delivering IT services comes with its own benefits and downsides. The key is matching the style to the needs of the function being provided.

Bulletproof’s Randall says that those looking to become a cloud services provider should do their homework. “Don’t take a traditional managed services offering and think you can just apply it to public cloud. You have to understand the different needs that customers have in a dynamic environment compared to a very static one.”

Buttonwood’s King also cautions that you will end up running a very different business than before. “We’re no longer a systems integrator, we’re a services integrator. We don’t plug in cables any more, we plug in APIs.”  

Fact file: Evolution of IT services

OpEx only

The time of service bureaus, where all computing time was rented by the hour or MIPS executed.

Internal CapEx and OpEx

As computers became more affordable organisations would buy their own, as it was cheaper than paying hourly rental fees for something needed 24/7.

Tweaking the CapEx/OpEx mix

A period of adjustment around how much money was allocated to capital budgets and how much to operational budgets. The ratios would vary wildly depending on industry, company finance policy and the whims of CFOs.

Fixed-fee, fixed-term OpEx

Some portions of IT were outsourced completely, usually to save
on costs for areas deemed non-strategic. Contracts were often long, five to 10 years in some cases, and ran to millions of dollars.
The approach promised lower, predictable costs and moved assets off the balance sheet, but the actual results for business were mixed.

Cloud service consumption

It almost feels as if we’ve come full circle, renting computing resources by the hour as needed. Variable fee, variable length contracts bring agility, but can be costly without a clear appreciation of the workload mix.