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State of the Cloud for Service Providers

19 Feb 2016 by Howard M Cohen

At Insight, we talk to our readers about being Service Providers (SPs) because it’s not as limiting as Managed Services Providers (MSPs).

While MSPs are the tacit industry standard nomenclature, it suggests the role involves managing services. We’ve found that the partners we work with do far more than simply manage existing deployments. They also design, develop, deploy, configure, construct, test, provision, migrate, transfer, install, integrate, implement, optimize, train, service and support information technology systems and services.

For some time, there has been a myth perpetuated that “the cloud” presents some odd kind of challenge to MSPs. Those who would attempt to continue to leverage the artificial “mystique” around cloud computing would suggest that there must be some sort of transition to undergo. Many will then offer to train and prepare MSPs to undergo this fictional transition. Caveat emptor.

Let’s face it, a server is a server is a server, no matter where it is located. Ask IT managers who have co-located equipment, and they’ll tell you that their servers and storage still need to be properly and effectively managed. That doesn’t change. What does change is that they don’t need to concern themselves with what is popularly referred to as “the grunt work” of physically maintaining the machines and their connections. Whether using co-location, hosting or cloud services, the provider does the heavy lifting, which frees MSP resources to focus on more productive, and profitable, work.

The channel spent many years arguing about what exactly “the cloud” is. Ultimately, they came to realize that it’s simply a less expensive, higher quality way of delivering needed IT services.

As infrastructure becomes a commodity, service providers must adapt.

“If you’re doing what you’ve always done, you’re probably getting what you’ve always got.” These words from the immortal sales motivator, Zig Ziglar, should always remain the clarion call to all service providers. As with everything in the IT industry, remaining alive and thriving requires SPs to innovate, innovate, innovate.

In the context of service providers, the infrastructure support services that have always been provided are quickly becoming commoditized. Mammoth providers, including Amazon Web Services (AWS), Microsoft Azure, IBM Softlayer, Google, RackSpace and others, are all vying to become customers’ infrastructure. Just as the early days of “the cloud” eroded server and storage sales for IT resellers, subscription-based infrastructure will surely erode sales of some infrastructure-centered services.

One of the areas in which customers will most need services will be in the area of application delivery and optimization. Applications are at the core of everything when it comes to IT, so customers will be clamoring for help in migrating applications to cloud platforms, integrating their on-premises data centers with cloud-based resources, and assuring interoperability of every computer, tablet, smartphone and all the billions of devices slated to join the Internet of Things.

The Forrester report, published December 1, 2015, “The State Of The Cloud: Migration, Portability, And Interoperability, Q4 2015,” asserts that “building an app that spends its entire life in the same public cloud is the ideal cloud application model. Stepping outside of this model is more realistic, but it presents challenges for Infrastructure & Operations (I&O) professionals. The cloud conversation often centers on connectivity and movement of apps, increasing interest in open-source tooling to bypass aspects of vendor lock-in, excitement around containers or API management. This report scores the maturity of each interoperability and migration category so you can make the informed decision of whether to migrate apps to the cloud.”

Do you know whether to migrate apps to the cloud?

It would probably be more appropriate to say “when” to migrate apps to the cloud.

Right now we’re working in a highly charged, very competitive environment where all players will do everything to retain and increase their leadership positions. The largest concern among most analysts, cited often in this Forrester report, is “vendor lock-in.” Each vendor offers specific services and standards, which differ significantly from competitors. The most challenging aspect for customers comes in the modifications that must be performed should they decide to switch cloud providers. Perhaps by design, this serves as an effective deterrent to switching.

As stated in the report, “Cloud providers build their solutions differently. It’s a classic “where standards lack, innovation and lock-in rule” adage. Lock-in isn’t necessarily evil. If costs remain stable and the added value is so clear and continuous that the user doesn’t want to move, lock-in isn’t a problem. However, if value declines, more cost-effective alternatives emerge, or the dynamics of the vendor relationship change, being able to switch to another provider becomes more important.”

The key is to not overspend on protecting against lock-in when the cost exceeds what would be spent on transitioning.

It’s the dis-integration of application.

Reading the Forrester report, it becomes clear that what is occurring is a dis-integration of application from processor, from network, from platform, from data and from storage. When each of these components is separated by layers of abstraction or containerization, the opportunity to achieve interoperability rises. The challenge here is to avoid sacrificing by introducing latency when achieving this interoperability.

Will you become a developer?

One of the concerns expressed by many SPs when discussing the commoditization of the infrastructure business is that all that will be left to them will be to become application developers. This is simply not the case. Service providers have always been in the business of moving data from place to place. The transition is an exciting one filled with opportunity. SPs will now also be far more responsible than ever for also moving applications from place to place.

Diving into these complex topics, we were interviewed in the making of this report as one of more than 25 enterprise and vendor thought leaders. (Insight is listed as a resource on pages 2 and 12, and indirectly positioned as one of the thought leaders on page 3.) 

Download the Forrester report, “The State Of The Cloud: Migration, Portability, And Interoperability, Q4 2015,” as you explore all the cloud opportunities awaiting you.