MSPs need to focus on cloud services that matter most
There’s no doubt that cloud computing services can be overwhelming to navigate, but a new survey suggests that the actual number of services regularly used by organizations is rather narrow.
Civo, a provider of cloud services, recently surveyed IT leaders and found that on average companies use less than 10 services from their public cloud provider. More than a third (34 percent) said they use less than five. Only 20 percent of respondents are frequently using more than 15 offerings from the big three cloud service providers.
Not surprisingly, compute instances other than graphical processor units (GPUs) are employed by 69 percent of respondents, while 79 percent report accessing a cloud storage service.
MSPs must look at what has the highest demand
The typical managed service provider (MSP) doesn’t have unlimited resources so it’s imperative they focus their cloud efforts on where there is the highest amount of demand. Cloud service providers, of course, are pressuring MSPs to gain as many certifications as possible across a wide range of services but given the actual level of demand for those services MSPs need to invest wisely. A niche service might generate higher margins, but there may not be enough demand to warrant all the training required to gain a certification for that service.
The truth is a lot more customers are starting to focus on constraining rather than expanding cloud budgets. The survey notes, for example, nearly half of the respondents (45 percent) are under pressure to reduce costs. Government officials are also starting to make inquiries into cloud pricing. Ofcom, an agency in the United Kingdom (UK) tasked with regulating communication services, has launched a market study under the Enterprise Act 2002 into the cloud sector. Collectively, Amazon Web Services (AWS), Microsoft and Google generate about 81 percent of revenues in the U.K. public cloud infrastructure services market. Similar inquiries may launch in other countries if the economic downturn continues for a prolonged period of time.
Rising costs create concerns around cloud services
On one hand, concerns over cloud costs may deter customers from going to MSPs who are advising them to move to the cloud. On the other hand, MSPs should expect to see a decline in cost as mainstream cloud service providers attempt to fend off these inquiries by demonstrating a little more meaningful competition.
While there still seems to be a lot of cloud computing issues that are rearing its ugly head, savvy MSPs should focus their efforts on the managed services that matter most. Some of those services are likely to see a decline in demand as end customers become smarter with managing their cloud consumption. Other services, however, will increase in demand as, for example, organizations embrace more complex cloud-native applications running on Kubernetes clusters. The Civo survey finds 87 percent of respondents are already using either containers or Kubernetes clusters, so as more of this emerging class of workloads are deployed, demand for cloud services will shift.
MSPs heading into 2023 will need to figure out where to place their bets for the coming year. The one thing that is certain is the cloud services market next year is going to look nothing like it has for the past five years or more.
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