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20% Proof: What MSPs Can Learn From Mass-Market Cloud

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The mass market has a valuable lesson to teach MSPs - it ain't what you've got, it's what you do with it that counts. So when you're creating your cloud service as an MSP, stick to your guns. Stick to what you know. Your world hasn't actually changed because your infrastructure looks more cloudy. Your customers need the same skills from you that they've always needed.

In my last post I talked about the 80/20 rule for your cloud service, with some ideas to help you get the most from the 80% of your cloud that's basically the same as everyone else's. That really boils down to choosing the right platform. This time I'd like to consider the remaining 20%, and where the true value of your cloud service lies.

In general terms that 20% is the specific service wrap, expertise and skillset you take to market on top of your core cloud platform. So what kind of strategy should you adopt to make that 20% work for you?

At OnApp we've been pretty successful across the range of cloud providers, from telcos and MSPs down to smaller hosting companies that have evolved from businesses focused on dedicated and VPS hosting, to become cloud providers. And I'd like to suggest that there's a very important lesson that MSPs can learn from their smaller cousins when looking for the edge in 'the cloud'. And that is - stick to your guns!

The most successful cloud providers, across the spectrum of the industry, are those who have developed a focused value proposition based on what they know best. It might be a specific application, an industry sector, migration from a certain legacy platform, a compliance issue, security, a specific SLA... the list isn't quite endless, but it is pretty long. Your focus area can actually be very  specific, because the market is big enough now that even a small niche - say, managed hosted helpdesk services in retail banking - is large enough to build a successful and sustainable business in.

Follow the Successful Ones

The least successful are those companies that have thought it necessary to completely reinvent themselves because now they're selling 'cloud'. If there's one piece of advice we give to clients time and again, it's that just because your infrastructure now looks like 'cloud', that doesn't suddenly change the basic rules of your business. Nor does it suddenly mean you're going to see a whole heap of business from clients who just want to buy 'cloud', because that's what it says on the box. There may have been a time when that was true, but it's certainly not true any longer.

Of course there is quite a substantial difference between a small web host and a large MSP business, and you might reasonably be thinking, how can the experience of companies at one end of the market really have anything useful to teach companies at the other? I would argue that they do, for three reasons. Firstly, weight of numbers. We've built thousands of clouds for service providers large and small, and of course there are more providers in the mass market than in the higher echelons of managed cloud services. It's a large sample, and we've seen the same patterns repeat themselves at hundreds of smaller providers, as well as larger managed services companies.

What You Already Know

Secondly, there is more overlap between the service capabilities of MSPs and hosting companies than you might think: there is a basic commonality of purpose. The main difference is in scale and breadth of capability. And thirdly, that commonality is amplified by the levelling power of 'the cloud'. The rapid commoditization of hosting technology brought about by the cloud has almost entirely levelled the playing field: the service you buy from your local host is probably running on the same hardware - and maybe even in the same datacenter - as the service you buy from your MSP. Just look at the scope of what a bookshop has achieved in the cloud.

That's why the mass market has a valuable lesson to teach MSPs - it ain't what you've got, it's what you do with it that counts. So when you're creating your cloud service as an MSP, stick to your guns. Stick to what you know. Your world hasn't actually changed because your infrastructure looks more cloudy. Your customers need the same skills from you that they've always needed.

This is probably the mindset that underpins the many articles arguing that there's no difference between an MSP and a CSP. I have some sympathy with that view, although I would also argue that MSPs that use cloud technology in the right way, open up new avenues for growth as they pull more and more service areas into their cloud infrastructure. But that's a topic for another post. 

Kosten Metreweli is Chief Commercial Officer at OnApp.

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