Is Cloud Computing The New "Managed Services"?

I just finished up a coaching call with a managed services client of mine (and Producers Club Member) who shared with me the same tale of woe I'm hearing from many MSPs: their clients are calling to find out if they can reduce their managed services contracts or get out of them all together. Why? Because they are reducing staff, closing their doors or simply looking for ways to cut costs. In some cases, I've heard that MSPs are seeing a solid 30% to 70% reduction in contracts, almost overnight. Not good…

HOWEVER, this client (and a few other MSP clients of mine) have identified a NEW and lucrative opportunity that is selling right now: cloud computing

This particular client of mine said that he recently started offering cloud computing to his clients and instantly had three enthusiastically jump on the opportunity. One client, a business consulting firm, commented that they were going to tell all of their clients about it too since it was such a tremendous way to save money.

Another client of mine and Genius League Member, David Bennett, Connections for Business is finding the same thing. Not only is cloud computing selling right now, but it is helping him differentiate his company in the marketplace since so few managed services providers are offering it.

What are the hot buttons that are getting clients to buy? I'm being told it's these three:

1. Saving money

2. The ability to access their network remotely (remote workplace)

3. The business continuity and backup

Clearly now more than ever your marketing message has to portray how you are going to help your clients save money and survive this tough economy. Personally, I think cloud computing is one critical way to do this. While you can certainly make a case for how managed services will save a company money, the argument is FAR stronger (and more tangible) with cloud computing.

If you are an MSP, are you getting clients cutting back and cancelling contracts? If so, what are you doing to fill the difference, and is cloud computing one of the ways you are doing this? Please post your comments below…

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Mar 28, 2009

Lynda Wagner Stevanus said...

I'm not having the same issues with clients terminating or reducing our contracts (whew!), however I AM a strong believer that cloud computing is the way of the future...I'm not there yet, but am extremely interested in moving our business in that direction.

Mar 29, 2009

Robert Coop said...

The Cloud? Remember ASP vendors? Application Service Providers that wanted to run applications over the web and manage your data and backups from central offices? I find that SMB clients are fearful to have their data hosted "somewhere" else. Bandwidth is finally coming down in price and client acceptance for cloud-type computing is improving, but I don't see MSP customers cancelling contracts to move to ASP type arrangements in groves yet.

Mar 31, 2009

cssi said...

Our clients are split on cloud computing between very interested and completely uninterested. I don't even ever call it cloud computing. But still, selling it in terms of benefits we have a long way to go.

said...

Cloud Computing I believe will be the future but we should take the time to define it. Saying Cloud Computing is like saying buying a Ford. What model and what are its features? Technically for webhosts, they have been doing it for years. Cloud computer more correctly refers to the virtualization and/or hosting of servers/PCs offsite. Traditional thin client computing was a precursor to this concept that has been used for years for data entry. The problem lies in those users that want to use DVDs/CDs or hookup a flash drive, etc. Thin Clients never had that capability. That's all changing. Here's where the challenge lies and where the ROI argument comes in. If you have a startup or a company in need of a technology refresh, going Cloud can make a lot of sense. Cash Flow 101... Computers are out of date in three years or sooner so why buy them. Put all the power in the data center, access the data/apps with as little hardware/horsepower as needed and just tack onto the monthly fee. Fits in the recurring revenue model perfectly. For the customers with an acceptable or bettter suite of hardware, moving it all offsite may not make sense. We are embracing the technology whole heartedly and working on all the details to implement. I might be coming in late in the MSP game but I can see where this market is going. The traditional MSP market may be a dying breed. As Vlad says (http://www.vladville.com/2009/03/small-business-owner-or-entrepreneur.html/comment-page-1#comment-45855), the difference between a business owner and an entrepreneur is the vision and the goal. For an entrepreneur, MSP is just what we are doing now, for some small business owners will die protecting their written in stone business plan.

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