MSP profits should increase as cloud becomes more mysterious

Posted by Mike Vizard on Jun 15, 2017 4:11:32 PM

MSP profits.jpegThere’s an old saying in the channel that wherever there’s mystery there’s profit. Given the level of platform complexity many IT organizations are now trying to navigate, everyone concerned should be generating plenty of MSP profits. Conventional wisdom holds that there’s an inexorable march underway that will result in all application workloads inevitably moving into a public cloud. A new global survey of more than 9,000 organizations published this week by Pure Storage, a provider of Tier 1 storage systems, suggests the truth of the matter is far more nuanced.

The Pure Storage survey finds that 61 percent of the respondents expect to increase their usage of public clouds over the next 18 to 24 months. Just over half (51 percent) said they also expect to increase usage of software-as-service (SaaS) applications over the same timeframe. However, 52 percent of the respondents said their usage of private clouds would also increase. To make matters even more interesting, 35 percent also said their usage of traditional on-premises IT infrastructure would increase.

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It’s worth noting that 41 percent say they are running applications using on-premises IT infrastructure, compared to 26 percent for public clouds and 24 percent for private clouds. The survey also finds that when it comes to cloud computing the overall IT situation remains fluid. More than two-fifths of the respondents in North America (43 percent) said they have moved application workloads back to an on-premises environment from a public cloud. A full 65 percent of the respondents based in Europe, the Middle East, and Africa also noted they have reduced usage of public clouds in the past 12 months.

Preparing for the hybrid cloud approach

To varying degrees, it’s apparent that usage of all compute platforms is increasing. The rate of growth may vary, but the basis on which that growth is occurring is not dramatically different. The total number of local data center deployments still dwarves the public cloud. IT organizations have made it plain they intend to use multiple platforms as part of a deliberate approach to crafting a hybrid cloud computing strategy. How integrated the applications spanning those environments are will also vary by customer. But with the rise of microservices architectures it will become more feasible to federate application workloads across multiple clouds.

Of course, it’s going to take time to achieve that level of cloud maturity. Public cloud may be over 10 years old, but usage of those public clouds has only spiked in the past few years. The next big issue managed service providers will have to contend with is the diversity of cloud platforms delivered as a service or running on-premises.

Not only are there multiple infrastructure-as-a-service (IaaS) options, new types of platforms and services based on containers and serverless frameworks are starting to appear. Add in services based on graphical processor units (GPUs) and field programmable gate arrays (FPGAs), and the number of types of platforms an MSP is going to be expected to master is about to increase substantially. Many MSPs simply will not have the financial wherewithal required to deliver managed services across all those platforms. The good news is that most internal IT organizations won’t have the expertise required either. That should result in significantly more demand for external MSP expertise.

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Topics: IT Services Trends

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