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Top 10 Cloud Services Provider (CSP) Predictions for 2016


Where is the cloud services provider (CSP) market heading in 2016? Here are 10 CSP industry predictions for VARs, MSPs and other channel partners that are shifting to the cloud.

10. Careful With CSP Claims: VARs and MSPs that resell cloud services should not be confused with true CSPs -- the platform providers like Amazon Web Services, Microsoft Azure, IBM SoftLayer, etc. Instead, the best VARs and MSPs will manage customer journeys to those public clouds -- rather than becoming full-blown CSPs.

Jamison West,
Arterian CEO Jamison West bet early on Office 365. Next up: Azure

9. SaaS Meets IaaS: Most channel partners began their cloud journeys with SaaS services like Office 365. The best partners will now help customers to move workloads to IaaS like Azure and AWS. Partners will also leverage APIs and umbrella dashboards to manage workloads across SaaS and IaaS. Keep an eye on partners like Arterian, which bet early on Office 365 and is now experimenting with Azure.

8. Distributors Become Master CSPs: Most of the major distributors now offer dashboards that allow VARs and MSPs to source and manage cloud services for customers. Instead of trying to manage multiple cloud relationships in a vacuum, VARs and MSPs will increasingly use the distributor dashboards to bring order to their cloud environments. Key names to know include ArrowSphereAvnet Cloud Marketplace, Ingram Micro Cloud ($200M in revenue, BTW), Synnex CloudSolvTech Data TDCloud (also $200M in revenue) and WestconGroup BlueSky.

7. Azure, AWS Extend Their Lead: Despite Google's November 2015 cloud reorganization and IBM's improved cloud performance, market leaders like Microsoft Azure and Amazon Web Services will extend their CSP leads over aspiring rivals.

6. Cloud Application Monitoring Tools: VARs and MSPs will gradually extend beyond infrastructure monitoring -- discovering tools like AppDynamics and New Relic to monitor and optimize cloud applications. Or as ChannelE2E previously stated: Tomorrow's RMM isn't RMM.

5. Cloud Services Security: One or more major break-ins, launched by rogue nations or terrorist organizations, will temporarily erode confidence in cloud security. But an international coalition of countries and vendors will emerge to organize to restore order, at least temporarily.

4. Cloud Services Shakeout: Numerous unicorns ($1 billion startups) built atop cloud services will suffer from a market shakeout as Wall Street finally punishes companies with inflated valuations. High fragmented markets like file sync and sharing will consolidate around (A) enterprise-class services sold directly to customers and (B) SMB-class services sold by channel partners. Also, big clouds like AWS will be hurt at some point by unicorns that stop paying their monthly bills.

3. Hybrid Cloud: The vast majority of customers will continue to leverage hybrid cloud infrastructure. But hardware vendors that predict a pendulum swing from cloud back to on-premises deployments will be proven wrong. The big winners will be VARs, integrators and consulting firms like Presidio -- which buy intellectual property for hybrid cloud management.

2. Cloud Services Revenue: The fastest-growing MSPs will generate more than 25 percent of their revenues from cloud-based services and application management.

1. Next Cloud Services Waves: Forward-thinking VARs and MSPs will develop overall strategies that embrace DevOps to help customers speed new application rollouts and continuous software delivery across both on-premises and in the cloud.

Note: ChannelE2E is running 2016 technology predictions throughout the month of December 2016. Submit predictions for consideration to [email protected]. Read all daily predictions here.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.