3 questions for every VMware Cloud MSP

Why become an MSP for VMware Cloud on AWS is one of the most common questions service providers ask me. Many of these providers have a successful business hosting and managing VMware based workloads. Some service providers have created offerings to help their customers with multiple clouds such as Amazon and Azure.  I’m sure this is no surprise as it is a common trend in the industry.

The answer to the question is specific to the provider asking. To begin to unpack the answer we should analyze the outer layers. The layers are indicators not restrictions. Any company can start a practice with VMware Cloud given enough time, training, and effort. 

Where are you on the Managed Services journey?

Indicator number one is an analysis of the extent and sophistication of any managed services you currently offer.  A cloud provider can be anywhere on the spectrum from unmanaged hosting to 100% outsourced IT.  If you make your margin by being highly automated and efficient hosters of various hardware and software, then you are at the beginning of the MSP journey.  The other end of the spectrum is born-in-the-cloud managed services companies who make their margin on attaching services the customer needs to third-party clouds.

I haven’t seen any data which informs me of the percentage of each type of company in the market. My own experience has shown most service providers are somewhere in the middle. They generate a majority of their revenue from “managed hosting” which is the management of the infrastructure while customers (or other vendors) directly manage the applications.  Many providers falling into this category have innovated in services surrounding managed hosting without having to become experts in any one business application.  Examples are security services, DR services, device management, and identity management to name a few. 

The reason I like MSP maturity as the first indicator is that if the provider offers expanded managed services, there is a high likelihood the service can bolt on to VMware Cloud and begin to provide differentiation for the provider. 

Forrester wrote an article on July 8th, 2016 titled “Real Managed Clouds Offer Much More Than Just Outsourced Infrastructure” which I believe gave providers a blueprint for the future. As I re-read in 2018 providers are just beginning to make a dent in the opportunity.  The quote that sticks with me from the article is “You Want a Runner Of Clouds, Not Just a Builder Of Clouds.”  

If your focus is “Runner of Clouds” and you can offer your customer professional and managed serviced to “run” their cloud based on VMware Cloud on AWS you could have the recipe of a lucrative practice. 

Who are your customers?

Current customer analysis is a fairly obvious indicator. Every solution has its use cases, and VMware Cloud is no different. Some providers are very regional and pride themselves on servicing the 1000’s of small to medium businesses in their area. Other providers may focus primarily on fortune 1000 size customers. 

I’m not inferring the size of the customer is any indication of if they will be a good fit for you the Managed Service Provider to offer VMware Cloud. The only measure which matters is value. The question is, can you build a value proposition for your customers compelling them to move to VMware Cloud and subscribe to your managed services?

I wish I could answer the question for you. The truth is the services, both one-time and reoccurring make a huge difference in the equation.  What problem are you solving?  Are you enabling innovation? Are you making the company more competitive to both customers and employees?

I believe VMware Cloud offers a unique set of tools to answer these questions for your customer. However, this blog post is not intended to convince you of that. One analysis I recommend is to look at every customer you currently have and determine if you would have done anything differently if VMware Cloud on AWS and AWS services were available. You can’t go back in time to do anything differently, but it helps to begin to flush out use cases which may be relevant. 

Do you specialize?

A very similar indicator to “Who are your Customers” although critical enough to warrant separate discussion. The follow-up question is how do you specialize?  

For example, do you specialize in a particular medical billing or practice software which is provided to customers via SaaS? Many companies have built very successful businesses installing, extending, and managing SaaS applications.  

If you are a SaaS MSP how would offering services on VMware Cloud provide competitive advantage? Will it open a new market? Squeeze out competitive threats? 

How would the analysis change if your specialization required infrastructure expertise. An example would be SAP or Oracle specialization.  I would look carefully into the services around the specialty to see if they apply to adjacent applications within the enterprise.  For example, if you already monitor and back up SAP, it may make sense to extend those services to other applications. 

Depending on the specialty you may be able to increase the total lifetime value of your customer base by providing additional services adjacent to your specialization. VMware Cloud on AWS may offer an asset-light opportunity to either enhance or extend a specialization. 

Wrap it up

VMware Cloud on AWS is a significant tool to create value both for customers and MSP’s.  Anyone considering becoming a managed service provider should look at where the value can be created for the three area discussed in this blog. 

These three questions are just the starting point, topics designed to initiate critical business thinking. Once you identify the “Universe of Opportunity”, perform an analysis and a business case.