Guest Column | March 24, 2014

5 Things You Need To Consider Before Adding Cloud To Your Service Offerings

Adding Cloud To Your Service Offerings

By John Humphreys, VP of sales and marketing, Egenera

By some estimates, there are 30,000 managed services providers (MSPs) worldwide. Many have built their businesses providing remote support for the computing infrastructure of small and medium enterprises (SMEs). Others do IT consulting and one-off IT projects.

In all cases, the cloud is forcing them to reexamine their business models and rethink how they deliver IT services. This is happening because their SME customers are turning to the cloud for both applications and infrastructure, threatening the MSP business model. A recent Gartner analysis estimated that global spending on public cloud services will almost double in size from 2012 to 2016, reaching $210B in 2016 — with Infrastructure-as-a-Service (IaaS) projected to grow the fastest at more than 40 percent CAGR.

Many MSPs are looking for new sources of revenue, especially recurring revenue, to offset the decline in product-based transactions and project-based fees. Others are turning to cloud solutions, adding it to their own catalog of services.

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