Study Explores State of the Cloud for MSPs

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Many Managed Service Providers (MSPs) have realized the cloud is the key to growth and success over the next few years. Assisting companies that are taking a cloud-first approach as part of their digital transformation will help MSPs boost their profits, but there are many challenges that need to be overcome to ensure success.

To explore the opportunities and challenges faced by MSPs in a multicloud world, CloudHealth by VMware recently commissioned Forrester Consulting to conduct a survey to identify the state of the cloud for MSPs. The survey was conducted online on 245 Managed Service Providers, and directors, VPs and executives within MSPs that organize service offerings were interviewed. The findings of the survey have been published in the report, The State of the Cloud for MSPs.

MSPs expect their cloud offerings to drive growth by around 40% in the next two years but many MSPs have faced significant challenges operating in a multicloud world which they are struggling to overcome. 80% of surveyed MSPs said multicloud challenges were impacting their ability to provide services to clients.

Finding clients is proving difficult for 74% of MSPs and retaining clients a problem for 79%. These were two of the biggest cloud challenges faced by MSPs. The market is saturated with vendors, so it is proving difficult for MSPs to achieve a large share of the market and many MSPs currently lack the level of maturity and the skills they need to succeed.

There are many potential customers, but they are now much more knowledgeable about the cloud than they were just a couple of years ago. Buyers now require much more product information, their support expectations are far higher, and they are getting increasingly technical. In response, MSPs need to mature to continue to meet their clients’ needs and they must become experts on the products they offer. This is currently a problem for many MSPs as there is something of a skills gap that is hampering their efforts to provide solutions that delivered their fullest value. 80% of respondents to the survey said they lack the technical skills to deliver multicloud solutions and that is impacting their ability to provide the specific cloud services that customers are now demanding.

60% of MSPs said multicloud is now their primary delivery method, and multiple clouds are being used to deliver solutions for security, application development, and business applications, but one of the problems is they are struggling to deliver the same levels of insight and visibility across each cloud, which means they cannot offer a cohesive customer experience.

CloudHealth offers several recommendations in the report to help MSPs succeed in the multicloud universe. It is important for MSPs to specialize in new areas that drive value. They must listen to customers, discover their objectives, and understand their unique circumstances. “Technology discussions will be centered around the buyers’ department, sub-industry, geography, size of firm, and the layers of the tech stack that are involved in driving the right outcome. MSPs will need to deliver on the cloud, security, and data initiatives surrounding these buyers’ needs,” explained CloudHealth in the report.

MSPs must find muticloud solutions that can meet their customers’ needs that are easy to use, flexible, and give them the insights they need. Without those solutions and a good understanding of how they work, client retention will continue to be a challenge.

MSPs also need to form strategic partnerships to help them achieve their goals. “MSPs shouldn’t shy away from partnerships with vendors and industry professional services firms to help deliver multicloud services to customers,” explained CloudHealth. “Today’s buyers are demanding increasing levels of specialization, something MSPs should seek to embrace with the help of strategic partners rather than attempt to go at it alone. MSPs looking to succeed must prioritize partnerships as a competitive advantage, building and nurturing relationships with adjacent, non-competitive firms.”

Author: Steve Alder has many years of experience as a journalist, and comes from a background in market research. He is a specialist on legal and regulatory affairs, and has several years of experience writing about HIPAA. Steve holds a B.Sc. from the University of Liverpool.

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