Avnet general manager Darren Adams says cloud heavily influences how partners serve their customers, especially in delivering backup, disaster recovery and business continuity, communications and data analytics.
"Each of these services moves end users away from an expensive capex model to a true, consumption-based opex model," Adams says.
Similarly, MSPs should be aware of their own investment limits; this is where Avnet is poised to help, he says.
"There are resellers who invested in their own cloud infrastructure along with their managed services. They reached a point where the cost to compete against large players was not viable. Partnering with a large cloud infrastructure provider, then wrapping their managed services around that would be a more profitable solution."
Adams says Avnet has a white-cloud program to deliver private or public cloud solutions that includes sales, content marketing and training.
"The key issue for resellers, when it comes to cash flow, is ensuring their business maintains a reasonable profit from sales, perpetual software licensing and so on. In addition, they must constantly drive resources into growing subscription revenue," he says.
"The sooner a reseller maps out their strategy, the better. Hoping and waiting for subscription revenue to come along, rather than defining a strategy, will result in failure."
Oriel is one IT firm that isn’t waiting around, says its CEO and Olympic swimming gold medallist Chris Fydler. Three years ago, nearly two-thirds of Oriel’s revenue was from projects but the company is transforming to grow its cloud and managed services offerings, and expects that dependence to nearly halve as a proportion of revenue over the next year.
"We identified a need around 10 years ago for managed services. We tuned our business to be annuity-based and then created products around managed services," Fydler says, pointing to Exchange as one example of this.
"Two years ago, we started to build our own hosting environments. We were one of the first HP CloudAgile partners, then the advent of public cloud providers like AWS [Amazon Web Services] hit the market. We could see it was impossible for small guys like us to keep up.
"We decided to tailor our solutions to focus on management of that infrastructure rather than its provision."
Oriel has built a managed cloud gateway product on AWS, based on Riverbed technology at the customer’s site. "That provides a clean, secure and encrypted replication of backups and starts to do away with tape and we put all that info into AWS cloud. We have a large bank come onboard with that solution and we see an opportunity in mid(-tier) to enterprise space with people wanting to do away with tapes in their infrastructure."
That’s not to say that Oriel has ripped out its own infrastructure. As an example of the continued need for hybrid solutions, Oriel maintains its HP equipment for customers who have bespoke requirements, applications or operating systems that won’t sit on public cloud. This led Oriel to form an eight-developer team to help customers manage their IT, Fydler says.
"We’re putting a lot of investment into a front-end portal that gives the customer one view, whether [their workloads are] sitting at AWS or Oriel or their site, they can see that infrastructure."
Fydler says one of the biggest changes at Oriel was its own cultural transformation, which included pooling software developers and IT operations technicians into a "DevOps" team.
"It’s been quite difficult. Culturally understanding it now, it’s not about building something and walking away – it’s about managing. In instilling ITIL into our service desk, we can understand the things we need to get right.
"Constant reinforcement is the key. We had to constantly remind ourselves that the business was changing and how we think about customers is changing," he says.
Andrew Sjoquist, CEO and founder of Sydney IT service provider ASE, says customers also have an innovation, which is why they turn to MSPs.
"So many IT managers arestill buried in the day-to-day operation of keeping servers up and patching," Sjoquist says.
"Once they get relief from that quagmire, the ability to look around and see what else is possible, like mobile apps, [helps them] to change the status and stigma of IT in organisations."
"We’re looking at an IT manager who spends 80 per cent of their budget on keeping the lights on. We’re working to get it down to 50 percent so we free up their IT budget to advance the business rather than doing housekeeping."
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