Knowledge is power

A recent CIO.com article posits that even in the face of “cloud washing”—described as “on-premises software rebranded as cloud software”—CIOs are getting a better grasp on what it really means to operate in the cloud. More of the right questions are being asked as awareness of true cloud opportunity increases.

Disguising hosted services behind a veil of all the cloud promises may appeal to providers in the short term, but it’s detrimental to the customer relationship in long run.

Profitability in the cloud relies on recurring revenue and maximizing customer lifetime value. Banking on up-front project costs won’t sustain a business the way it used to—at least not for much longer.

Take one MSPs example: his customers are asking all the time if his company is a VAR or an MSP. Why? Because they know the difference now. They know who to trust when it’s time to have the cloud conversation. Arriving at an intelligent purchasing decision and getting maximum value from a provider necessitates that kind of distinction.

It’s equally important for you, as an MSP, to understand and internalize the difference—meaning, make the shift in your business—if you want to provide ongoing value to your customers and succeed with a recurring revenue model.

It’s interesting that such a gap exists within the industry around this very issue…

In CompTIA’s managed services trends report this year, more than two-thirds of respondents classified themselves as experts in managed services, when less than a third (only 29%) credit managed services as their primary driver of revenue.

The struggle is real

Trust me, we know it’s tough. There is no magic wand to wave over your break/fix business and turn you into a Modern MSP without a lot of work. The reality is: to gain a customer’s trust and ongoing business, you’re expected to offer a great breadth and depth of expertise across a huge expanse of cloud solutions that meet their needs as they grow. And how do you scale yourself?

You have to bundle like a boss. You need to wrap a valuable managed service around every license you sell but you must be smart about it. It starts with knowing your audience and your specializations. Play to your expertise when you can, and choose the right technology partner to help you supplement your business with extra value where you need it.