The Unmet Demand for Premium Cloud Monitoring: New 451 Research Survey
As businesses run services across an increasingly hybrid mix of cloud and on-premises environments, they realize a number of benefits—but they also encounter significant challenges in monitoring. A new 451 Research survey details these organizations’ challenges and the services they’re looking for—and would pay a premium for. Read on to find out more about the survey’s findings and the implications for cloud service providers (CSPs).
Introduction: Evolving Nature of IT and Customers’ Struggles to Adapt
In the world of IT management and managed services, the cloud continues to create radically different realities. Customer adoption of the cloud continues to accelerate, and the variants of providers, models and services continue to proliferate. The upshot is that, for any enterprise, the landscape is now composed of a complex, dynamic mix of different cloud environments from multiple providers and both legacy and new technologies in the customer premises.
Together with 451 Research, we conducted a survey of enterprise IT executives in order to see how organizations were faring with IT service management (ITSM) in this new paradigm. The prognosis? “Not good” may be the most succinct answer. Consider just a few statistics:
- Forty-two percent of executives are struggling with managing cloud-based infrastructures.
- Fifty-eight percent of respondents are receiving complaints on application performance.
- Fifty-one percent only discover IT issues after they’ve occurred.
CSPs would be wise to consider these challenges and factor them into their plans and services moving forward. For many, the choice is simple: Start helping customers address these challenges or start losing market share to the service providers that do.
While many CSPs offer monitoring services today, the survey results we’re seeing make it clear that, while customers are happy with the services they’re getting, these services aren’t enough, not by a long shot.
Many CSPs are delivering very basic monitoring services. For example, an infrastructure-as-a-service (IaaS) provider may throw in monitoring for free as part of a server subscription, so customers can track how the servers they’re leasing are performing. Or a software-as-a-service (SaaS) provider may offer online dashboards revealing whether specific services are functioning properly.
If CSP leaders limit their perception of monitoring to these basic services, they’re undervaluing the monitoring discipline and ignoring a potentially very lucrative area.
To provide insights to the service provider community more generally, and specifically to CSPs, we wanted to take an objective look at what’s happening with enterprises’ ITSM in this new hybrid cloud paradigm. Through this survey, we wanted to help CSPs understand where there are unmet market requirements and where they could establish new, high-value, high-margin service offerings to address this demand.
CA worked with 451 Research to help with conducting the survey and with analysis and reporting on the results. (Note: The survey report will be coming out soon, and we’ll be following up with another article to drill into more details on the findings and to provide a link so you can access the report directly.)
The survey examined how enterprises are faring with ITSM. We specifically looked at 28 potential pain points, and asked respondents to tell us the degree to which these issues were being encountered. We also looked at how current gaps are affecting businesses. In addition, the survey explored the areas in which customers would be willing to pay a premium to a service provider that could help with achieving their ITSM objectives.
Demographics: In total, we had more than 200 respondents complete the survey. In terms of job responsibilities, the respondents fell into one of two categories: They either were responsible for making IT infrastructure purchases or purchase recommendations, or they handled building, supporting or architecting IT solutions. These respondents worked with organizations from across a broad range of industries, including technology, manufacturing, financial services, retail and more. Finally, it is important to state that the respondents were a cloud-centric group. Sixty-five percent use hosted infrastructure as a service for production workloads and almost half (49 percent) use fully shared public cloud services in production.
CSPs that access the forthcoming report will be able to benefit in two key ways:
- Identify opportunities. The survey results underscore two key realities: First, enterprises are encountering a range of pain points in managing service levels across their hybrid mix of cloud and on-premises environments. Second, these IT executives make it clear that they’d pay a premium to those service providers that can help address these pain points. As their customers navigate the shift to multi-provider, multi-cloud IT, CSPs can deliver a number of services to help. The survey specifies the services that are in most demand. By adding premium, high-value monitoring services to their offerings, CSPs can realize a range of benefits, such as differentiating their offerings, addressing key customer challenges, boosting market share and more.
- Learn how to capitalize on the opportunities. The survey helps provide insights not only into what services should be delivered, but how they should be priced, packaged and positioned. The survey points to significant revenue opportunities for CSPs, but the reality is that most will have to adapt their services and businesses in order to capitalize on these opportunities. Fundamentally, they’ll need to move beyond basic monitoring offerings, which may take investments in staffing, training, technologies and more. If decision makers are considering making investments in capabilities for delivering new premium services, these results can provide critical justification for these investments internally. Further, as they go to market with new services, these results, and particularly the pain points and business implications being referenced, can help establish a compelling value proposition—and a strong justification for premium pricing.
If your CSP business has only been offering basic device or component-level monitoring, our survey shows there’s a compelling case to be made for adding higher-level monitoring services to your portfolio.
Be sure to look for the next article in this series, which will offer details on some of the most important findings from the survey. In addition, in this next post, we’ll let you know how you can access the 451 Research report as soon as it’s available.