Frequent MSPmentor readers know I talk and blog about the Managed Services Hype Cycle (based on Gartner’s own Technology Hype Cycle chart). All technologies go through a maturity curve (a cycle of sorts) that involves a bit of pain (or lots of pain) for customers and MSPs. Now, some folks are starting to talk about a Hosting Hype Cycle. And it’s an important discussion.
I came across the Hosting Hype Cycle headline while reading The Planet’s latest blog entry. It’s a good read, and it covers hyped offerings like “the cloud,” virtualization, hosting and colocation. Do I agree with all of the perspectives? No. Does the blog do a good job pointing out to readers that industry pundits are hyping many technologies within the hosting arena? Absolutely.
Your First Moves
The Planet piece is a timely read for MSPs that are trying to determine whether they should build or partner their way into the hosting market. Either way, you can’t afford to ignore the convergence of hosting and cloud services.
During the HTG Peer Group Summit in Dallas (April 2009), ConnectWise CEO Arnie Bellini recommended that small MSPs avoid the temptation to build their own hosting center, and instead gain some rack space in a local, established hosting facility. From there, you can potentially host Exchange Server or another application to get a “feel” for where cloud opportunities are going.
I like Bellini’s advice, but it’s not the only way to participate in the cloud. A few observations:
1. Seek to Understand Microsoft: I’d stick close to Microsoft and keep a close eye on the Business Productivity Online Suite (BPOS) initiative, which involves Exchange Online, SharePoint Online and other hosted Microsoft applications. I am not endorsing Microsoft’s strategy. Rather, I think all MSPs need to understand where Microsoft is going in the hosted world. Then either cooperate or compete fiercely with the strategy. Either way, you need to understand Microsoft’s moves.
2. Partner, Don’t Build: Why host Exchange on your own when plenty of online service providers will let you leverage and rebrand their hosted Exchange services as your own?
3. Think Applications: Lots of MSPs stick to pure network and systems management. But don’t forget, you can leverage Amazon Elastic Compute Cloud (EC2), RackSpace Mosso, and dozens of other options to move key customer applications into the cloud. Skeptical? Check out the recent cloud work by two VARs/solutions providers: Levementum and OpenBI.
4. Think Cloud Management: Level Platforms caught my attention a few days ago when the company announced a Managed Cloud Service that allows MSPs to remotely administer Microsoft BPOS applications and other third-party SaaS systems.
My ultimate conclusion: If you’re just focused on “hosting” you’re focusing on a commodity market. Move on. Move up. Think about how you’re going to leverage hosting partners. Determine if it makes sense for your customers to move some applications to the cloud. Then figure out how you’re going to manage those applications in the cloud. Finally, beware of the Hosting Hype Cycle.
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Posted In: PSA | Platforms | Software as a Service and Hardware as a Service
Tags: Amazon EC2 | Amazon Elastic Compute Cloud | ConnectWise CEO Arnie Bellini | Exchange Online | Hosting Hype Cycle | HTG Peer Group Summit | Level Platforms | Level Platforms Managed Cloud Service | Managed Services Hype Cycle | Microsoft BPOS | Microsoft Business Productivity Online Suite | RackSpace Mosso | SharePoint Online | The Planet Blog
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Great insight, Joe! There are many small and/or aspiring MSPs who have the knowledge, but not the financial wherewithall to invest in their own fully hosted solutions, or, the money could be better spent somewhere else.
My partner Deb and I view ourselves in more of a consultant role than just pure service delivery. And to that point, we’ve been outsourcing our hosting solutions for some time. It’s made it possible for us to grow at a steady clip, even in this economic environment, and to provide our clients with best in class services and solutions.
I particularly appreciate your heads up regarding Microsoft. I also think they are going to take a big leap into this environment, and, in their typical fashion, will ultimately need to look to the channel to gain marketshare….
Jim Van
Logicomm, Inc.
http://www.logicomm-inc.com
Mezeo sells a deployable platform that allows hosters to stand up a cloud storage solution, like Rackspace CloudFiles or Amazon S3. Further, Mezeo encourages hosters to develop a distribution channel of MSPs for their Cloud Stoarage services. Mezeo gets it!
Jim@1: Thanks for the perspectives. I think Microsoft’s SaaS strategy is going to upset some MSPs and VARs for the short term. But the company is insanely loyal to the channel and I suspect trial and error will allow Microsoft SaaS to gradually connect with MSPs.
Steve@2: All comments are welcome. But can you (A) disclose if you’re working with Mezeo and (B) tell us why you think Mezeo “gets it”? I recognize your name. But for MSPmentor readers who aren’t familiar with Mezeo and your role at the company, please feel free to give them the proper context for your comments. Thanks.
Joe – I think you probably know where we stand on the issue at 6fusion. We couldn’t agree more. One of the reasons why we created our demarcation point at the utility infrastructure level was because MSPs, big or small, need to have a blank canvass of sorts. The ability to customize and tailor the suite of applications you go to market with is critical, which leads to piece of advice I tried to convey during my keynote at the Ingram show in Dallas a few weeks ago: Maintain control over your customer and avoid the silos or buckets of service that can fragment your vision of delivering on the “Managed Services” vision. In order for the cloud or utility based computing to really succeed in the channel it must have multi-industry relevance and vertical-application integration. If there is no possible way that the same partner you choose can also (even if it isn’t today) foresee helping you run your client’s vertical Line of Business application (particularly the legacy ones) in the cloud too, chances are they are one (maybe two) trick pony. This is a tell-tale sign that you should look elsewhere to partner. In my opinion, the *only* way for an MSP to deliver a consistent IT service offering is by achieving a state where on premise and ‘in the cloud’ is truly transparent. On a more macro level, this is also why we see such disparity in market predictions for cloud computing versus net SMB spending. Check out our blog post regarding The Long Tail of Cloud Computing here: http://6fusion.wordpress.com/2009/05/16/the-long-tail-of-cloud-computing/
John: Good to hear from you again. Thanks for the perspectives.
Readers: John’s company is involved in a federated data center/cloud service of sorts, which extends a range of services across multiple third-party data centers. MSPs plug into the system (a grid of sorts, I believe) and pay for only the selected resources they use. I learned a bit about 6Fusion st the Ingram Micro Seismic Partner Summit and I still have the notes from the discussion. Now, I just need to find time to transform the notes into a blog
Joe – First, so your readers know, I work for Mezeo. Also, I mean that Mezeo gets it in two ways: (1) Mezeo’s leadership team is from the Hosting space (VeriCenter, sold to SunGard in 2007) and (2) our offering is designed for hosters to deploy the infrastructure and take the cloud storage solution to market themselves and/or as a while label offering that MSP’s can take to market in partnership with the infrastructure provider. We strongly believe that MSPs will play a significant role in taking cloud storage to their customers, and have designed our solution accordingly. Thanks for continuing this important discussion.
Steve@6: Thanks for clarifying your role and company focus. Appreciate you looping back with us. We thrive on reader comments and value them. But I always push participants to say where they’re from, who they represent, etc. It helps readers make more informed decisions, etc.
-jp