7 things MSPs should know about the evolving cloud services market

7 things MSPs should know about the evolving cloud services market

Here’s what managed service providers should be looking out for if they want to flourish amid the increasingly competitive and complex cloud services space.

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The pandemic has, in many cases, accelerated enterprises’ transition to the cloud, driving up demand for service providers (MSP) to help them with the shift, albeit in an increasingly complex environment.

At the same time, the managed cloud services market has become more competitive as organisations increasingly look to public cloud service providers for solutions and leadership.

This is according to analyst firm IDC, which has outlined a number of market hotspots MSPs should keep an eye on if they want to keep pace with evolving enterprise demand.  

These hotspots were identified after the analyst firm conducted a survey of more than 1,500 organisations, including both IT and line of business respondents across six countries and a broad range of industries, to uncover information on the adoption of managed cloud services by enterprises.

Broadly, the survey examined the set of service and business requirements that MSPs and their ecosystem partners need to invest in if they want to optimise their market opportunities and drive competitive advantage in the market for managed cloud services.

Here are seven of the top takeaways from the survey findings:  

Cloud strategy and business resiliency

As has already been well-documented, the pandemic has seen organisations looking to utilise public cloud capabilities such as infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and software-as-a-service (SaaS), innovative technologies like the internet of things (IoT) and processes, along with multicloud management platforms to support future cloud strategies and ensure business resiliency.

Critical metrics  

Although the market is yet to see more than a few organisations shift 100 per cent of their IT applications and infrastructure to the cloud, it seems that many firms plan to accelerate this shift over the coming years, with the rate of transition expected to vary by country and industry, according to IDC.  

This trend could be worth keeping an eye on with the overall expected cost savings from managed cloud services in 2021 being 40 per cent, up from 37 per cent in 2019, according to IDC’s research.  

Enterprise maturity

Enterprise buyers are using managed cloud services to create more agile IT, drive new revenues and improve customer experience, according to IDC. However, concerns remain over ensuring service level agreements (SLAs), performance of IT for critical applications and security.  

Regardless, organisations indicate that they plan to increase spending on such services significantly over the next 12 to 24 months despite the concerns, the analyst firm’s research suggested.

Sourcing strategy  

In what will no doubt come as good news for many channel players, IDC’s research found that the majority of enterprises prefer to work directly with MSPs to manage their public cloud provider and any assets that are hosted on the public cloud provider's platform to ensure better communications and that SLAs are met.  

At the same time, most organisations prefer using the management tools of each public cloud provider, IDC noted.  

Advanced automated technologies

Roughly 40 per cent of firms surveyed said they were already using no code or low code capabilities as part of their managed cloud services with another 30 to 35 per cent planning to do so within the next two years.

Meanwhile, by utilising cognitive and artificial intelligence (AI) technology as part of their managed cloud services, enterprises are focusing on more efficient IT operations and aligning consumption of IT with individual, role-based needs.

Operational expectations

Enterprises consuming managed cloud services consider centres of excellence as being critical to ensuring operational excellence, according to IDC, although centralised command centres and business units for public cloud providers are equally important in some sectors.  

Although there has been little anecdotal evidence within the channel to support it, IDC also suggested that most organisations are also looking to public cloud providers to help reduce carbon emissions from their data centres.

Private, public and hybrid clouds

IDC noted that while most organisations prefer to rearchitect their existing IT assets into private clouds over buying prebuilt private clouds, they also overwhelmingly prefer to utilise public cloud services over private clouds to meet an array of needs as part of their managed cloud services.  

The role of public cloud as part of a hybrid cloud strategy is to provide access to public IaaS cloud capabilities not available in private clouds and to meet the need for surges in demand, IDC claimed.  

Against the backdrop of these top takeaways, IDC outsourcing and managed cloud services program vice president David Tapper reckons that ensuring success in the managed cloud services market will require that MSPs provide a means of adapting their talent, technologies, processes and organisational structures to meet client needs and integrate professional services into managed cloud services.

"In addition, they will need to invest in sustainable offerings for the socially conscious customer; create a business operations centre; incorporate an intelligent, unified multicloud management platform; implement a robust governance model; and build centres of excellence and labs for cloud platforms,” Tapper said.

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