Don’t be a Monday Morning Quarterback!

In business as in life timing is truly everything. It is always very easy after the fact to look like an omniscient genius. (“Oh yeah the writing was on the wall 3 years ago that Netflix stock was going to explode!”, “I knew 4 years ago that I would never ride in a yellow cab again!”) YEAH RIGHT! While we all have hopefully had times in our life and career when all the “ducks” line up perfectly. Too often however many of us simply arrive at the party too late (“man, all the shrimp is gone!”). Its real easy to look back and talk “could haves and would haves”!
For the modern day MSP and VAR however, we are seeing a landscape changing opportunity that is clearly taking place. This is not my biased view of course, you can cite numerous Gartner, MSPmentor, etc. reports and studies. The beauty of this shift to the cloud is that it is happening at a relatively slow to moderate pace. While talk and chatter about cloud computing seems everywhere nowadays, reports like a recent study from service-leadership.com cite that cloud revenue only account for around 6.6% of overall solution provider revenue. This number certainly surprised me. At very least it exposes a huge market/perception discrepancy that should have all savvy MSPs and VARs literally licking their chops.

There are many reasons why that % is so small. In my view, the main factor is that the solution provider has had many difficulties figuring out how to properly monetize this inevitable shift in the way the traditional IT service business has been conducted. In addition (and equally as important) one of the is that it has historically been too labor intensive and time consuming to migrate legacy premise based infrastructure to the cloud.

Everyone agrees that the demand from the SMB market continues to persist and will only grow from here. What is the MSP to do? They understand what is happening, but they are obviously averse to exponentially increasing their operating and labor costs. Many providers have gone this route (creating and maintaining their own cloud solution). However, even the most successful attempts at this almost always hit the wall. The provider becomes a victim of early success because they quickly realize it becomes cost/labor prohibitive to scale the business.

This is where the opportunity lies. No one disputes that the cloud market for SMB (and just as important the Business Application market) will continue to grow at least at a 20% annual pace over the next 5 years. With cloud revenues only counting for less than 7% of total provider revenue currently, the writing is on the wall. This is the opportunity to say that your business timing was spot on! In addition this the chance for the MSP/VAR to become a total solution provider. Show your clients ways to become more productive, collaborative and efficient. You can ride the inevitable wave and create true partnerships (rather than just loyalty lacking typical client/vendor contracts). Recurring revenues and boatloads of referrals to follow!

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