- No data center or hardware infrastructure investments. This might seem obvious, but many IT companies invest in cloud infrastructure only to find the return is less than anticipated. The procurement and management requirements of all the components necessary for a scalable cloud are easily underestimated and require specialist skills.
- Avoid high maintenance costs. In addition to the capital investments, running a cloud requires ongoing maintenance costs often not anticipated during the build stage. And as a cloud partner you get access to better rates and healthy margins usually associated with equipment reselling, but often overlooked in the cloud.
- Faster time-to-market. Beyond the infrastructure costs for IT services firms, time is money too. Buying cloud services enables you to deliver services faster, without the capacity planning overhead.
- Keep up with industry trends. As more services move online it is increasingly prudent to host client applications “near” other cloud services. Cloud providers have low-latency, high-speed interconnects between data centers and other cloud services. This networking capability is another specialist skill which is often overlooked when building a cloud.
- Support is available on-demand. To build an effective cloud you also need to build up support capabilities. Buying into the cloud gives you access to technical specialists who can diagnose and fix problems on-demand. Managing an infrastructure support team is often an unnecessary overhead for IT services firms.
- Many opportunities to add value. When you buy into the cloud you can exploit the large (and growing) number of value-adding opportunities. Cloud providers have services like CDNs and security monitoring which IT services firms can adapt to client needs. It’s worth noting these cloud-based value-added services are generally recurring, which helps build up an MSP business model. And adding value to the cloud does not require the associated infrastructure investments, so the barrier to entry is low.
- Total control. As with anything you purchase outright and manage, you don’t have to give up any control over how it’s used. For better or worse, you could stand up a separate cloud for each client application requirement. One thing to keep in mind here is the need to carefully check vendors’ usage and support terms. When you “buy” IT equipment you might not have as much control over it as you might expect.
- Client requirements. A small minority of clients might not engage due to their requirements for infrastructure ownership. This might be for regulatory or compliance reasons, or it could simply be a case of company policy. In order to meet a client requirement it can be better to build a cloud than pass on the opportunity.
- Security concerns. The security of public clouds is often the source of much contention among service firms and end-customers alike. While it’s true if you build your own cloud you can tightly control the location of the equipment and the network access to it, today’s public clouds have a multitude of security provisions built in as well. Build your own cloud when security is paramount, but beware of catastrophic failures (for example, flooding) which can happen with self-managed equipment in server rooms.
- Avoiding vendor lock-in. Avoiding lock-in for your clients is another reason to build a cloud. Unfortunately some of the well-known public clouds are not standards-based and make it almost impossible to migrate from one cloud to another. Managing your own equipment can mitigate this risk for clients.
Table 1: The benefits of buying and building a cloud for IT services providers.
|No capital costs||Total control|
|No data center or hardware maintenance||Meet client requirements for infrastructure ownership|
|Faster time-to-market and project completion||Meet compliance requirements for infrastructure location|
|Many options to add value||Custom security|
|Existing support||Avoid cloud lock-in|