Executive Summary Managed Service Providers (MSPs) and Value Added Resellers (VARs) are increasingly helping their clients leverage different forms of cloud computing. This has created a unique opportunity within the IT channel for MSPs to begin offering new services to their customers, be it IaaS, or other related services like disaster recovery, cloud migration, high availability etc. Not only will MSPs be able to substantially grow their service offerings, they will be able to reduce operating costs and create new recurring revenue streams. In this survey, we ll provide an overview of the current state of the cloud computing industry, cite relevant statistics, and demonstrate why MSPs should grow their cloud computing and IaaS offerings. We ll also share insights from our survey of MSPs who attended IT Nation and provide their thoughts on what the cloud will mean to them in 2016. MSPs Get Busy With CLOUD Migrations Industr research and IT ad isor firms, from International ata Cor oration I C, to orrester, and artner are re ortin a si nificant le el of rowth for the cloud com utin industr. I C sa s the total num er of data centers is.6 million. What the Cloud will mean for MSPs and the IT Channel in 2016 Page 2
We re now seein the ra id mi ration of these data centers to the cloud, with I nter rise also re ortin that of all or ani ations are scalin ack their on remises infrastructure and are mi ratin to the cloud. I nter rise further redicted that 2 of total IT ud ets will e allocated to cloud com utin in 2016. Additionally, Gartner forecasts showed that global spending on IaaS in the public cloud will reach 16. illion in 201, u 2. from 201. This strong level of growth is only expected to continue over the coming years, with artner redictin a com ound annual rowth rate C of 2.1 for the market. arr Walsh, from the IT channel strate firm 2112 rou, mentions in his Cloud Com utin o to Market uide that o er of cloud re uests recei ed MSPs are for IaaS and that of all MSPs see cloud infrastructure ser ices as having the highest growth potential for their businesses. All of these statistics clearly demonstrate that more and more companies are comin to de end on the cloud. In fact, 6 of firms sur e ed in the uro ean nion I nter rise confirmed that the re usin u lic cloud ser ices for their Enterprise Resource Planning (ERP) and other business critical applications. Manufacturing companies, representing some of the biggest clients for MSPs, were at the top of industry verticals who depend on the cloud What the Cloud will mean for MSPs and the IT Channel in 2016 Page 3
with almost 60 of them re ortin a hi h le el reliance on the cloud for some of their a lications and another re ortin a medium le el reliance for others. Smaller manufacturers will come to more heavily rely on their MSPs for their IaaS capabilities and their ability to painlessly migrate their applications to the cloud. This massive level of growth and high demand provides an exciting opportunity for MSPs to partner with their cloud providers to expand their service offerings to include IaaS, disaster reco er etc. and achie e reater cost efficienc, while creating new recurring revenue streams. Through IaaS, MSPs will be able to mi rate their customers to the cloud, offerin this alue added ser ice to their customer base, all the while lowering hardware support costs, and increasing their rofit mar ins. With cloud infrastructure, the ll no lon er ha e to worr a out maintaining on premises equipment and will be able to meet their customers expectations for high availability of their IT systems, disaster recovery, and better security. What the Cloud will mean for MSPs and the IT Channel in 2016 Page 4
Use Cases And Applications Migrating to the C Trends reflect a growing desire from companies to migrate one or more of their workloads and/or applications to the public cloud, especially among these top three areas: Trends further reveal that most enterprises no longer prefer to leave their systems on premises, especially among these top three areas: What the Cloud will mean for MSPs and the IT Channel in 2016 Page 5
MSPs Reveal What the CLOUD Will Mean for Them in 2016 ProfitBricks s onsored and s oke at IT ation in rlando, lorida. While at the conference, we surveyed approximately 2000 MSPs and asked what the cloud will mean to them in 2016. Here are the top seven predictions for the cloud in 2016 from an MSPs perspective. > Top Cloud Predictions for 2016 What the Cloud will mean for MSPs and the IT Channel in 2016 Page 6
1 High Availability 17 % er 1 of the MSPs sur e ed re orted i h Availability as being the most important opportunity when it comes to cloud computing in 2016. ear 100 u time of all IT s stems is critical to the success and viability of any modern day business. If on premises systems go down for any length of time, be it minutes, hours, or days, it means a loss of productivity and ultimately revenue. By setting up your customers cloud infrastructure to account for otential ser er, one, and e en cloud failure through things like auto scaling, database mirroring, spreading servers for each of your applications tiers across multi le ones, and re licatin data across ones, an MSP can offer a new alue added ser ice level. By ensuring applications are always available in the event of an application or server level failure or other disaster, customers can continue business as usual without interruption, at a fraction of what it would cost them should the suffer a si nificant outa e. 2 isaster eco er 15 % 1 of MSPs cited isaster eco er as ein one of the most important cloud computing considerations for their customers in 2016. ata is the one of the most, if not the most, alua le asset an enterprise can have and failing to have a proper disaster recovery plan in place could result in lost data, failure to meet legal obligations, lack of productivity in the workplace, and even a loss of revenue. MSPs can help their customers meet their eco er Time ecti e T and eco er Point ecti e P tar ets settin u disaster recovery plans in the cloud, so in an event of a disaster, failover and recovery can be achieved, mission critical applications will continue uninterrupted, and business operations will continue as per usual. As an MSP, ou ll e a le to add isaster eco er as a Ser ice aas to our ortfolio of ser ice offerin s and help your customers lower operational costs and avoid the risk of data loss by not having to maintain an on premises data center. You ll also be able to take ad anta e of fle i le a er use illin models offered by many cloud computing providers. For more information about deploying a disaster recovery plan in the cloud, read our recent white paper on the topic. What the Cloud will mean for MSPs and the IT Channel in 2016 Page 7
3 Recurring Revenue 14 % ne of the i est ad anta es that 1 of sur e ed MSPs see in 2016, is that moving their customers to the cloud is an exciting opportunity to create a new recurring revenue stream. By removing the need to setup and support on premises infrastructure across multi le eo ra hic locations, C P hardware and related su ort costs are si nificantl reduced. Additionally, as the margins have fallen to almost nothin for on remises hardware urchased, cloud computing s recurring services have margins that can e ceed 0. 4 Security 11 % As MSPs move into 2016, security remains a top riorit for their customers with 11 of those surveyed identifying this as a top priority to include in their service offerings. MSPs can rely on their cloud providers with secure physical data centers, redundant s stems, data deletion olicies, and u to date security software that s continually monitored and maintained. n to of this, MSPs can hel their customers re ent ma or reaches controllin who can access data and leveraging the cloud s scale to add additional security layers and applications without adding hardware. And of course, by not ha in to maintain securit of their on remises infrastructure, they can limit potential employee or outsider theft of physical gear. 5 Cloud Mi ration 9 % MSPs see cloud migrations as being another ma or to ic in 2016, as of sur e res ondents expressed their requirement for a painless cloud migration. In order to effortlessly and rapidly migrate their customers to the cloud, MSPs need to be able to leverage the offerings of their cloud providers. Such providers typically have a team of experts available 2, offer user friendl tools that don t re uire an training to use, and enable MSPs to build a cloud infrastructure that s similar to their customer s physical one. As migration to the cloud can be ainless with ro iders like ProfitBricks, MSPs can offer to do this on their customers behalf and add yet another new service offering to their portfolio. What the Cloud will mean for MSPs and the IT Channel in 2016 Pa e
6 Easy Upgrades 8 % nother item of im ortance to of MSPs sur e ed is being able to easily meet the upgrade requirements of their customers applications in the cloud versus the painful, long, and downtime inducing physical hardware upgrade process. By partnering with a cloud provider, MSPs no longer need to worry about continually updating their customers equipment, as updates will be automatically applied. This frees up the MSP technical support staff teams to focus on more business critical issues facing their customer base. 7 Centrali ed Mana ement 8 % of all MSPs re orted that ha in a sin le centrali ed mana ement tool to administer all of their customers deployments of servers is of great value and importance to them when it comes to efficientl runnin their cloud ased usinesses. Being able to access and use a tool from anywhere is of a reat enefit, es eciall for MSPs with lar e technical support teams who travel to customers sites to fi ro lems. dditionall, user friendl tools like ProfitBricks ata Center esi ner helps MSPs a oid ha in to s end a si nificant amount of time and money training their support staff on how to use the software. Summary With the increasing IT spend on cloud computing and demand for IaaS, the time is now for MSPs to partner with their cloud providers to build or further expand on their services portfolio. oin so will mean an increase in re enue, lower operating costs, and the ability to meet customer requirements. If you d like to learn why a second generation of cloud computing IaaS providers are becoming the default choice for cloud deployments, schedule a call with one of our cloud computing channel consultants and learn how you can generate cloud based recurring revenue and increase your profit margins. What the Cloud will mean for MSPs and the IT Channel in 2016 Pa e
This re ort was created ProfitBricks. out ProfitBricks ProfitBricks is the IaaS ro ider that offers a ainless cloud infrastructure for all IT users and mana ed ser ice ro ider artners, with no learnin cur e. ProfitBricks oasts fle i le cloud ser ers and networkin, an inte rated ata Center esi ner tool for isual control o er the cloud and a rice erformance uarantee. ProfitBricks was awarded a s ot on C s mer in endors ist, won the Best Cloud ward SCII and was also the reci ient of the rost Sulli an orth merican Cloud Inno ation award. ProfitBricks has offices in Berlin, erman, San ntonio, Te as and Boston, Massachusetts. Get more information For further information and resources please visit our Website: www. rofit ricks.com Blog lo. rofit ricks.com Twitter: htt s twitter.com ProfitBricks S ProfitBricks Inc. 1 00 a Cantera Pkw, Ste. 1 210 San ntonio, T 2 6 Phone 1 66 2 22 a 1 620 mail info us rofit ricks.com www. rofit ricks.com twitter.com rofit ricksusa lo. rofit ricks.com 201 ll ri hts reser ed. ProfitBricks, the ProfitBricks lo o and ata Center esi ner are trademarks of ProfitBricks Inc. ll other trademarks are the ro ert of their res ecti e owners. ProfitBricks reser es the ri ht to make chan es without further notice. What the Cloud will mean for MSPs and the IT Channel in 2016