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MSPs get acclimated to managed cloud services

MSPs move from managing on-premises assets to taking on the cloud, adapting to a cloud-based business model and environments of varying complexity.

More and more businesses have their heads in the cloud lately, so it only makes sense that partners do too. But managed cloud services is different from managing on-premises systems, and some partners are finding themselves having to make adjustments.

The transition is not always a smooth one, noted Seth Robinson, director of technology analysis at CompTIA.

"There has been uncertainty and confusion among managed service providers [MSPs],'' he said. "While in the past they may have managed on-premises equipment and applications on that equipment … cloud computing for an MSP really brings in another degree of abstraction between the infrastructure and the equipment and the service that's being provided."

"Given the rapid growth in cloud adoption and the added management complexity that deploying cloud services entails, there is rising demand for more management solutions to address these needs,'' observed Jeff Kaplan, managing director at THINKstrategies. "Established IT management vendors … are expanding their functional capabilities to respond to these requirements."

Managing a customer's cloud-based assets differs from managing on-premises assets in that the customer has ownership control of the assets to be managed with a traditional on-premises environment, whereas cloud-based assets are owned and operated by a cloud provider, Kaplan said. "This complicates the managed services arrangement."

In a cloud services relationship, when assets move off premises, the customer must designate the MSP as its authorized agent to the cloud provider. And the MSP must monitor additional aspects of the customer's operations, such as the cloud service availability, quality of service and security, Kaplan said.

A new business model

Software provider Aptify has experienced both sides of the coin, selling to organizations that were "on the hook for managing" their software themselves and then, seeing the demand for cloud services from customers, building a cloud and becoming its own cloud provider, said Duke Witchel, manager of IT and managed services.

The trick for managed service providers is that they're trying to wrap their heads around 'How do I manage my customer's apps in a cloud environment?'
Seth Robinsondirector of technology analysis, CompTIA

"The core differences are your data is going to live in a large data center with highly redundant power, Internet connections and hardware," Witchel said. "Typically, these things are too expensive [for IT to run] on [their] own and cloud providers are able to make this cost-effective due to economies of scale."

But Aptify has had to establish pretty extensive policies and procedures for managing customer data, he added, addressing issues such as PCI-DSS and SOC 2 compliance.

Witchel said changing Aptify's business model has been a big win for it as well as for its customers. "The only change is in how we sell [the software] and where it sits. … With our solution, it's like they're getting fully staffed IT rather than 'Here's some software. Good luck.'"

In terms of whether managing cloud-based systems is easier than managing on-premises systems, Kaplan said it all depends on the complexity level. "In some cases, on-premises systems are relatively mature and easy to manage. In other cases, they can be highly customized and require additional management skills," he said. "The same is true with the [managed] cloud services," since some are relatively standard while others may include special configurations that require additional management capabilities.

Moving a customer to the cloud comes with a different set of management challenges, said Don LeClair, executive vice president of product management at Kaseya, a vendor of software used by managed service providers to manage their customers' IT systems. In a classic server environment, he said, "you'd deploy an agent and then manage it," whereas the cloud is an agent-less environment "so there are less management interfaces to understand how that cloud or virtualized environment is performing." About 20%, or about 2,000, of Kaseya's Virtual System Administration customers are running the cloud version of the product instead of the on-premises version, he said. Kaseya software "can manage the internal network and servers along with cloud-based pieces of the overall service as a whole."

Impact of server virtualization

Whether at a customer site or an MSP's own site, virtualization has had a big impact on how IT systems are now managed, CompTIA's Robinson said.

"We see our customers moving rapidly to a virtualized private cloud, but we're also seeing increasingly an interest in using … part of their infrastructure on a platform as a service environment" like Amazon Web Services (AWS), agreed LeClair. Kaseya is evolving its business to support customers by integrating pieces of a customer's infrastructure to reside on AWS. LeClair said it then falls on Kaseya to look at the overall service to ensure the cloud-based network is performing, and whether it is healthy or not.

But there are likely a lot of companies that haven't virtualized, especially smaller ones, because if they don't have large workloads, it doesn't make sense, Robinson said. (According to the July 2013 Magic Quadrant for x86 Server Virtualization Infrastructure report from Gartner, roughly two-thirds of x86 server workloads have been virtualized.) So they are still using physical servers to host their applications. He said CompTIA sees some lack of understanding about what virtualization is and how to translate that into a cloud environment.

"The trick for managed service providers is that they're trying to wrap their heads around 'How do I manage my customer's apps in a cloud environment?'" This involves moving from a view of the infrastructure to a view of the service that's being provided, and the MSP is the conduit for that service, he said. For example, with email, if a company is stable and not adding a lot of employees, a traditional hosted environment would be suitable for them. Otherwise, cloud-based email would be the answer, Robinson said.

"The solution provider needs to build a different approach in understanding what you need from your email," he said. "If the solution provider is acting as [the customer's] IT team," they need to look at issues such as reliability, cost and security, and the cloud can provide that. "So the shift is in moving to 'What is the ultimate solution being delivered?' and 'What's the best way I can deliver the service?'"

MSPs can provide value to customers by vetting the different cloud options and creating their own portfolio, Robinson added. "Rather than the customer saying, 'Here is a cloud app I'd like you to manage for me,' the MSP can say, 'You have an app or service that needs to managed; let me do that for you, and I'll choose the best way from my toolbox for how to do that,'" he said. "And at the end of the day, you're getting the service you need."

The most obvious service that goes away in a managed cloud services model is the hardware management, said Robinson. "To the extent that you may be moving from hosting your own apps to hosting them in a cloud, obviously you're dropping the hardware management, and that's being handled by the cloud provider."

Kaplan concurred. "Cloud services eliminate the need for 'break/fix' services and reduce the amount of time/effort required to stage and configure hardware."

This was last published in June 2014

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