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How Managed Services and Cloud Technology Can Compliment Each Other

Cloud TechnologyIt is becoming apparent that many MSPs in the marketplace today are making a distinction between cloud technology and managed services that is actually hindering rather than helping their bottom lines. The prevailing view seems to be that customers want to either go with managed services or want to make use of cloud technology solutions, and that these two types of service are in competition with each other.

The fact of the matter is that customers don’t generally care what’s going on under the hood, as long as they get where they want to go. Customers want solutions for their business problems, irrespective of the technology being used. Understanding that both managed services and cloud technology are complementary components of a comprehensive, customer-based solution strategy is key to opening up new, more agile business models to MSPs who want to remain competitive.

Cloud as a Core Component

Cloud technology, rather than being an outsourced add-on that MSPs can offer their clients, should be a core component and part of a robust and flexible suite of solutions available from the outset. There are some use cases best served by managed services, and others that are better dealt with by cloud services. Clever MSPs are increasingly able to offer both in-house, and are providing the option on a wider scale than their competition.

The problem with widening the scope of offerings in this way, some MSPs point out, is that cloud technology requires more clients than managed services to be financially viable. It’s generally accepted that a cloud services provider needs to engage more than the 50-100 clients to make managed services profitable. Many smaller MSPs aren’t prepared to or capable of expanding their operation to accommodate the increase in client base.

Making a Larger Customer Base Work

There are ways to make a larger customer base work without significantly increasing the scale of operations:

  • Specialize in niche areas of cloud services such as security or compliance
  • Focus on high-growth areas such as application development
  • Be willing to branch out into new technologies and ecosystems
  • Run as efficient an operation as possible by making use of professional management tools
  • Identify the elements that can still be outsourced to reduce costs and inefficiencies as much as possible.

Running a lean, focused operation is an effective way to be able to offer clients as diverse an array of complementary services as possible while maintaining solid profitability.