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Embotics Cloud Management Blog

Maximizing Profits and Optimizing Infrastructure for Managed Service Providers

Maximizing profits and Optimizing Infrastructure
Companies are always looking for new streams of revenue, especially those that are already offering online services, IT services or have excess capacity in their virtual datacenter that they want to monetize.

The general push in the market to outsource and decrease its datacenter footprint has provided a market opportunity for forward-looking Managed Service Providers (MSPs) and even business units within an organization that want to provide services for other business units. Advances in cloud management software have lowered the barriers of entry for the MSP market.

This post features five lessons learned in working with customers who built out their new cloud service offering. One theme that was common across all the people and organizations is that it is all about services:

  • The Cloud services or IT as a Service (ITaaS)
  • Value add services like backup, monitoring, Disaster Recovery,
  • Professional services to help customers migrate workloads into the cloud offering
  • A wide range of assessment services that create “quick wins”
  • Building out on-premises and hosted capabilities

Five Lessons Learned:

1. Keep It Simple

There are many aspects to providing cloud services to your customers. Your offering can get complicated very quickly if you don’t take a step back and determine what your customers are truly looking for. It is very easy for things to get out of control.

The cost model you decide upon needs to be consistent. Customers get concerned and confused when monthly bills fluctuate every month, which also makes it difficult for customers to effectively budget. Going with allocated cost models will deliver consistent pricing for your customers. At the time of ordering a service your customer knows exactly the monthly cost of the service is. This will also simplify billing your customers and collecting revenue.

Another consideration is what you publish in your service catalog and what management features you are going to extend to your customers in your portal or virtual storefront. The general rule of thumb here is to limit the functionality to what is required and not overcomplicate the user experience by giving too many options.

Most importantly you need to make it easy for your consumers to request and purchase your services from your service catalog.

2. Every VM Is An Asset

Now that you are managing other people’s data and workloads it is critical that you are able to track, control and audit any activities happening with these assets. You are the custodian of this data so it is critical that you manage it properly. Virtual sprawl creeps into many datacenters as a result of people taking shortcuts. This can cause issues on two fronts: Firstly, you may not be able to properly charge for that service; Secondly, these lost workloads are consuming resources that aren’t available for you to sell. Having the proper workflow, approval framework and audit system in place ensures that process is followed and exceptions are caught.

3. Leverage Technologies That Provide Operational Advantages

When it comes to choosing software that provides cloud services, you want to make sure the consumer experience is easy to use and that it is not going to be a burden on your administrator(s) to configure and maintain.

There are three considerations when deploying a cloud services or an ITaaS solution:

  • Your customers
  • Operational processes
  • Technology

Technology should be your simplest piece of the puzzle. Once you figure out the services you are offering to your customers and the internal processes by which you will deliver your services, it should be simple to configure your cloud management software to deliver it.

4. Automate, Automate, Automate

Now that you have defined your processes, procedures and workflows, it is time to automate as much of it as possible . The benefits of automation are numerous:

  • Drive a higher VM to admin ratio
  • Attain consistent and predictable workflow  and usability for your customers
  • Rapidly respond to customer requests
  • Increase stickiness within your customer environments
  • Grow your wallet share

You need to make it easy for you customers to order and modify services. Once you make it easy and seamless for them they will increase the use of your service offering.

5.  Assessment  Services Create "Quick Wins"

Not all customers are willing or able to fully embrace ITaaS or cloud-based offerings. Some customers may be early in their journey and focused primarily on virtualizing a wider range of workloads or trying to increase their density ratios. Seed your customer and prospect base early by providing "virtualization assessments" that highlight capacity and performance bott lenecks, out of inventory VMs, and critical configuration issues. In doing so, you will quickly become their trusted advisor and when they are ready for the cloud, they will consult their advisor and create an enormous upsell opportunity.

As customers mature and begin evaluating cloud based services (i.e. hosted services), be proactive in packaging up assessment capabilities that provide insight on where they are today (consolidation ratios, infrastructure density, process evaluation) and where they want to be. This opportunity delivers a quick win and facilitates a more strategic consultative approach to onboarding a wider range of customers to  your hosted or on-premises solution.

In summary

Simplicity will give you a strategic advantage that will maximize your profits when offering cloud services. Be mindful that you are handling other people's data and will need to be fully accountable for the management of it.

Be sure to choose a cloud management platform that does not introduce complexity for your customers and the management of your cloud infrastructure. To scale to the demand of your customers you must automate tasks in order to raise the admin to VM ratio which will drive up profits!

Check out more resources for Managed Service Providers.

Topics: Managed Services Application / Service Delivery Best Practices Service Providers Outsourcing