MSP, Content

Microsoft Cloud Summit: Managed Services Are ‘The New Normal’

Microsoft cloud and MSP partners provide critical managed services and capabilities to help customers achieve their top business goals, according to a 451 Research study released at this week's Microsoft Cloud and Hosting Summit.

The Microsoft-commissioned study, titled "Digital Transformation Opportunity for Service Providers: New Paths to Beyond Infrastructure," indicated nearly 90 percent of IT decision-makers said they are willing to pay a hefty premium to service providers to help them implement and manage their hybrid cloud environments.

Why Are Managed Services "The New Normal"?

Key findings from the 451 Research study included:

  • Half of all organizations surveyed said they consider service providers to be essential for digital transformation projects.
  • 60 percent noted they would be willing to pay twice as much as they currently spend to have a single trusted advisor solution to manage digital transformation projects.
  • 62 percent of cloud/hosting infrastructure spending comes bundled with value-added services, and this total rises to 84 percent for the next cloud/hosting infrastructure engagement.
Aziz Benmalek
Aziz Benmalek

Microsoft cloud and MSP partners that own the customer relationship can build value-added services to increase stickiness and differentiate themselves from the competition, Aziz Benmalek, Microsoft's vice president of worldwide hosting & MSPs, wrote in a blog post.

"The study reveals an enormous opportunity for our cloud partners to help customers with both hybrid cloud implementation and with managed services for the next phase of digital transformation," Benmalek noted.

Vertical Market Opportunities: Microsoft Cloud & MSP Partners

Microsoft has experienced double-digit growth in its hosting and managed services segment for five consecutive years – a trend that appears likely to continue in the foreseeable future.

Meanwhile, vertical market opportunities may help Microsoft cloud and MSP partners extend their reach over the next few years.

Data and site protection services like backup and recovery, disaster recovery and site protection represent top priorities for many organizations, according to Benmalek. However, Microsoft cloud and MSP partners may want to consider offering a stack of services for ongoing operation, management and support of cloud/hosting infrastructure environments, including:

  • End-to-end application management.
  • Proactive capacity planning.
  • On-call 24/7 support.
  • Incident management and remediation.
  • Infrastructure/application alerting and monitoring.

If Microsoft cloud and MSP partners embrace hybrid cloud services, they may be able to capitalize on the rising demand for digital transformation solutions in vertical markets, Benmalek pointed out.

"The evidence is clear: hybrid is here to stay and the opportunity for service providers has never been greater," Benmalek wrote in a blog post.

Microsoft & MSPs: No Overnight Success

Additional insights from ChannelE2E Content Czar Joe Panettieri:

It took Microsoft several years to find some success with MSPs. And even today, the company hasn't quite caught on with MSP-centric peer groups and associations that are obsessed with recurring revenues, according to our ongoing market coverage and conversations with MSP leaders.

The inconsistent MSP relationships started back around 2011, when the Office 365 launch ignored MSP demands for partner-centric billing and pricing management. Even Google Apps (now G Suite) offered such partner capabilities at the time. Instead of profiting from Microsoft's early cloud services, many MSPs instead doubled down on remote PC, server, notebook, storage and security support.

Microsoft's next major MSP mistake arrived in 2012, when the company promoted Windows Intune (now called Intune) as a platform for MSPs to remotely manage PCs. But the offering never caught on because it initially only supported Windows -- essentially ignoring Apple Mac, Apple iOS and Google Android during initial releases. In stark contrast, established MSP software tools were cross-platform for mobile, desktops and servers.

Still, Microsoft has made progress with MSPs in recent years, introducing billing and pricing capabilities for Office 365; a CSP partner program; and even some new ways to monetize Azure.

Dan Kobialka

Dan Kobialka is senior contributing editor, MSSP Alert and ChannelE2E. He covers IT security, IT service provider business strategies and partner programs. Dan holds a M.A. in Print and Multimedia Journalism from Emerson College and a B.A. in English from Bridgewater State University. In his free time, Dan enjoys jogging, traveling, playing sports, touring breweries and watching football.