“When the car replaced the horse-drawn carriage, we didn’t upgrade the horses – we retired them.” – Yuval Noah Harari
451 Research predicts that Cloud managed services revenue will exceed $80B per year, up from $51B today. And the Cloud market is only going to get more competitive in the future. So, for traditional service providers, two possibilities exist — upgrade or retire.
Service providers need to realize that the Cloud business is different than their earlier offerings – traditional hardware or solution and infrastructure managed services. They must transform quickly and direct their focus on modern applications, platform-as-a-service (PaaS), or containers and PaaS rather than just on infrastructure management. The only way forward is to incorporate agility in operations, leverage new-age toolset, establish governance, increase optimization, and invest in security as an integral part of managed services.
Why should you find a partner?
Service providers do have a critical role in accelerating enterprise Cloud adoption. Some service providers might have created a Cloud strategy but are, still, heavily focused on assessments, migrations, or modernizations. Building a Cloud managed services (CMS) business requires a minimum investment of more than $2M, a 24-month lead time before producing significant results, and takes time and deep investments in talent acquisition, operations platform development, and management best practices. The scarcity of skilled-Cloud engineers adds to the cost and retention issues for service providers. They are finding it difficult to staff the required skills and technology breadth necessary to deliver services across a broad spectrum. Providing these services profitably at scale requires years of experience as a service provider.