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1.24.2023

Challenges and Opportunities for MSPs Selling Cloud Services

Last updated:
9.16.2020
1.24.2023
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cloud

If you’re a Managed Service Provider, chances are you’re probably already selling or seriously exploring cloud service options for your customers. SMBs, midsize companies, and enterprises are all aware of what they can get from the cloud by now, so your service options need to keep up, lest they turn towards SaaS options.

Clients will expect you, as an MSP, to be able to transfer their data and applications to a cloud platform and then keep that platform available at all times with right sizing, scaling, and management. Of course, a cloud service provider (CSP) partner is an essential ingredient towards your success (you may even want several partners to offer cloud services around the country). Here are some other tips to help you navigate the challenges of selling the cloud.

 

Become a subject matter expert

While organizations will want you to manage their IT, they also don’t want to be left in the dark about what’s happening to their data. Be ready to guide user practices from storage and collaboration access to security.

Start reading up on cloud concepts – you don’t need to know the technology underneath your cloud platform like the back of your hand, but you should be able to help your clients understand terms like “scalability”, “high-availability”, “SLA”, or “multi-tenant.” Knowledge of cloud terminology and a basic understanding of how the cloud works will help you articulate the advantages to your customers, and explain why their cloud backup is a better option than that old NAS or external hard drive.

 

Know your CLOUD SERVICE PROVIDERS

In addition to knowledge of cloud services in general, you’ll need to know the major and minor vendors in your territories. That includes the commodity cloud players like Amazon and Google as well as local and regional CSPs who provide additional managed services and more flexible options for custom designed solutions.

A major factor beyond geography will be the legacy systems of your clients, as they often will have to tie into the CSP platform.

 

Learn how to estimate usage

This is a tough one at first, but your cloud provider can help you craft a pool of Virtual Machine templates with all the applications you need represented, like Exchange or SQL. They can also help you estimate how much computing power you’ll need for different sized customers and applications.

Once you get a few months of cloud use under your belt, you’ll have a better feeling for how many resources you need. Luckily, cloud servers are easy to add and remove, so you don’t necessarily need to overpay. Just go month-to-month until you can find a solid scalable pool of resources for you customers.

You’ll also need to report to your customers about their usage so they know where their money is going. It’s fairly simple to record CPU, memory, and storage consumption for every VM. Which also makes it easier to…

 

Bill customers fairly

On top of the raw infrastructure, you’ll be juggling licensing costs, plus your hourly rates for management. Your cloud provider will charge you for the virtual machines as well as any services they provide to you — run the numbers and see if leveraging the engineering and administrator staff at the CSP helps you turn a profit or frees up your time enough to add some managed cloud services.

When you have several CSPs across the country each charging you for different IT resources, managed services, and software; plus other software vendors; and perhaps some legacy hardware sales and support; it can become quite a lot to keep track of. Billing software or single-pane-of-glass cloud management tools can help you organize and make sure to bill every customer fairly and transparently.

You’ll also want to make sure you have some margins for yourself, of course. Cloud often doesn’t have the same profitability as a hardware sale, so referral programs, volume discounts, and managed services that you provide, like monitoring and system administration, can all help boost your bottom line.

 

keys to selling the cloud white paper

 

For more tips on selling the cloud, read our white paper Keys to Selling the Cloud: Growing Services and Revenue with a Cloud Service Provider Partnership.

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