Navigating The Cloud

If you haven’t accepted the fact that our industry is forever changed by ‘the cloud’, today is the day. Gone are the days where servers are multiplying and we make money selling software on DVDs, hardware to run it on and margin-rich labor to make it all work for our clients. I believe that software is being rewritten to be native to the cloud so fast that in 5 years almost no small business will be buying servers and within 10, most won’t even own one. Software is being installed on cloud servers and being written such that it is ‘native’ to the cloud like salesforce.com, QuickBooks Cloud and so many more that don’t even use a server. We will need to reinvent ourselves or risk becoming irrelevant to this ‘new world’…we have to figure out how to make money moving clients to the cloud and managing what will certainly be a continuation of the integration puzzle that has helped create and grow so many great IT VAR and MSP companies.

Ok, now that that is over and we have accepted that we all MUST be in the cloud, they key question is…what role do you want to play in this new world? Do you want to stick to consulting on the cloud and letting others implement and manage on it, create your own cloud and sell it, become a broker of cloud services offered by other firms and help integrate and maintain them or some sort of combination of the four? The correct answer won’t be the same for all of us…it will depend on the unique capabilities of our firms and the talents of our strategists and engineers. To know the direction you should take, you must start off with an honest and objective assessment of your own capabilities.

The first thing to look at is whether your firm has the capital to create your own cloud environment. If your like most MSPs and VARS, the answer is that you have a very limited war chest of capital. It will take a significant sum, say $100k or more, to create a cloud that approaches the level of quality, resiliency and redundancy that you can get from vendors like HP, Microsoft, Rackspace and Amazon. The reason is simple…economies of scale. The more you spend and the bigger you create, the lower the cost of each gig of ram and storage you produce and the cost of each core (processing power) you offer. Whether you have the money or not, the decision to build your own cloud should not be taken lightly. It is harder than you think and someone else can likely do it better, faster or cheaper than you can. Spend the time to really analyze this to determine whether it makes sense for you to invest in creating your own or reselling someone else’s. In my experience, 99% of MSPs and VARS would be better off reselling someone else’s environment…but you may be in the 1%, so if you think you might be, go thru the effort with your senior engineer and accounting pro to determine which option is best. Be sure to compare the cost to build, maintain and upgrade as sales increase and hardware and software evolve. Be honest with yourself, leave your ego at the door. It is likely that only the biggest MSPs and VARS would be better off building their own.

Most of us will create an environment where we consult on the cloud to help our clients determine what cloud solutions are best for them, implement and integrate them and then maintain them. Under this scenario, the main investment you have to make is educational…are you aware of all proven technologies such that you can truly advise your clients on what is best for them? For many of us, this means a lot of web surfing and tradeshow attending. For the smart ones, you leverage your peers in other markets to learn from their experience and you look to your distributor partners like Tech Data as they have done a ton of research on what is out there and offer expertise from their talented experts on staff as to what is best for your clients. At my prior firm we, really leaned on trade shows, our peers nationwide and our distributor partners to ensure that we offer all proven technologies that give our clients competitive advantage in the marketplace. Surfing the web to figure out what is best is just too hard and takes too long. It is pretty easy for a firm to look like they offer something that works amazingly well on the web…without the product or service to back up their promises. With our reputation on the line, it is critical to be conservative and only offer the most proven solutions in what is clearly the ‘wild west’ frontier in our industry, the cloud!

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