“When the car replaced the horse-drawn carriage, we didn’t upgrade the horses – we retired them.” – Yuval Noah Harari
451 Research predicts that Cloud Managed Services revenue will exceed $80B per year, up from $51B today. And the Cloud market is only going to get more competitive in the future. So, for traditional service providers, two possibilities exist — upgrade or retire.
Service providers need to realize that the Cloud business is different than their earlier offerings – traditional hardware or solution and infrastructure managed services. They must transform quickly and direct their focus on modern applications, platform-as-a-service (PaaS), or containers and PaaS rather than just on infrastructure management. The only way forward is to incorporate agility in operations, leverage new-age toolset, establish governance, increase optimization, and invest in security as an integral part of managed services.
Meet us at Microsoft Inspire 2019 | Learn how to hyper-scale your Azure managed services business
Why should you find a partner?
Service providers do have a critical role in accelerating enterprise Cloud adoption. Some service providers might have created a Cloud strategy but are, still, heavily focused on assessments, migrations, or modernizations. Building a Cloud Managed Services (CMS) business requires a minimum investment of more than $2M, a 24-month lead time before producing significant results, and takes time and deep investments in talent acquisition, operations platform development, and management best practices. The scarcity of skilled-Cloud engineers adds to the cost and retention issues for service providers. They are finding it difficult to staff the required skills and technology breadth necessary to deliver services across a broad spectrum. Providing these services profitably at scale requires years of experience as a service provider.
WATCH VIDEO | How did Carousel Industries transform their managed services business?
Why the Master Service Provider partner-engagement model works so well?
Cloud service providers who are looking to add value to their services and transform their customers with Azure can enjoy the following benefits by partnering with a Master Service Provider:
DEEPEN YOUR CUSTOMER RELATIONSHIP
- Truly engage with customers, meet their needs, and solidify relationships
- Deep relationships unlock further revenue opportunities – especially with cloud migration and net new app development
BUILD RECURRING REVENUE
- Month in, month out billing to customers for managed services packages
- Ensures a constant revenue stream as opposed to the project based method
- Revenue grows as customer cloud spend grows
INCREASE PROFIT MARGINS
- Typical managed services gross margins (50-60%) higher than margins for professional services (40-50% and resale services (10-20%)
- Margins increase with scale and automation
UNLOCK PORTFOLIO OPPORTUNITIES
- Diversify your managed services portfolio with Azure
- Add new offers like cloud dev/test, cloud backup and data recovery, cloud-native app design, etc. to your practice
- Serve global customers with Azure’s geographic presence
Is it time to upgrade?
Customers are continually drawn to born-in-the-Cloud vendors, global security and intelligence services (SIS), and application development organizations. Consequently, service providers may fail to grab a huge opportunity to increase their market share.
Yes, it is probably time to think about transformation in terms of scalable Cloud services, time-to-value creation, and profit margins in a competitive age. Service providers need to gain full control of their customers and engage them via Cloud optimization as well as app modernization services. Legacy models will become obsolete shortly. And if you are still relying on a traditional Cloud framework, the only option will be to retire.
Get started on your journey to transformation and success
NetEnrich’s Cloud Management Focus: How can we help you transform?
As a Master Service Provider, we have made significant investments in building our competencies, skills, tooling, resources, automation, and industrialized services which the service providers can leverage to build, operate and scale their Azure Managed Services business. NetEnrich, with its extensive managed services experience and industry renowned platform and IP, offers ready-to-go Azure Managed Services for monitoring, managing, operating, troubleshooting, remediation, and service restoration.
“MSPs who partner with NetEnrich can start generating profitable, recurring revenues without added overhead costs from day one.”
Ready to make the most of your time at Microsoft Inspire 2019? Monitor. Manage. Optimize – Meet us at Booth 1717 and do Microsoft Azure right.
About Author
Tanuj Mitra
Analyst – Marketing, NetEnrich
Currently working in the domain of content marketing communications. Tanuj tries and aligns himself to create content that’s in-sync, smartly worded, and clutterbreaking.
The post Microsoft Inspire 2019: Building the Right Cloud Managed Services Practice appeared first on NetEnrich.
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