Accelerated digital transformation affects the way modern IT partners support clients and manage their tech stack. Several trends have emerged over the recent years that define how IT partners purchase, manage and sell cloud services, as change keeps driving our industry forward. In this article we talk about five of these trends.
1 The continued transition to ‘everything as-a-service’
It should come as no surprise that IT keeps moving from on-premises to the cloud, with vendors increasingly using subscription-based licensing models. At the same time end-users prefer the benefits of subscription-based cloud services over long, drawn-out IT projects with high up-front implementation costs. This model doesn’t just apply to software either, increasingly other IT vendors have also started offering hardware subscription models, ranging from laptops to print equipment.
The pressure is now on for the remaining ISVs to transition their software to the cloud. For instance, Microsoft recently announced major efforts towards convincing additional ISVs to run their software on Azure, and named 2022 ‘the year of the ISV’. This software can then be made available for provisioning and purchase via the Azure Marketplace and AppSource.
The trend of ISVs becoming cloud vendors and end-users adopting the subscription-based licensing models present both opportunities and challenges for IT partners.
• Supporting clients and managing their transition from on-premises to the cloud;
• Advising on which cloud services to choose;
• Managing those cloud services to supporting end-users after implementation.
• Training employees and acquiring the required knowledge and skills;
• Lowering support cost;
• Cutting on time spent purchasing, provisioning and managing cloud services from a wider set of cloud vendors.
2 Consumerization of IT
Consumerization of IT is what we see as the next step in everything as-a-service (XaaS). With IT moving from on-premises to the cloud using subscription based licensing models, replacing CAPEX with OPEX has become the norm. The evolution has had a profound impact on IT partners, and their business models and sales approaches, as both the customer buying cycles and frequency of customer touch points have changed in-step with the transition towards cloud services.
IT & the end-user
As IT solutions become more designed and marketed towards the end-user, they have become more involved in making the purchase decision, even to the extent of purchasing and provisioning of cloud services themselves.
Consumerization of IT also has other side-effects. For instance end-users increasingly use their own endpoint devices (Bring Your Own Device or BYOD) to install and use cloud services for communication, collaboration and access to company data.
Another side-effect of this is called shadow IT, where the IT department or IT partner does not have a complete overview of the software and cloud services in use within the organization. This is one of the reasons why Microsoft recently launched two versions of their Windows OS that both run in on Azure. Windows 365 and Azure Virtual Desktop both empower end-users to run Windows on any device, while ensuring data protection and security.
The modern marketplace
As a response to the consumerization of IT, more cloud services distributors are offering modern cloud marketplaces. The marketplaces act as a self-service area for an IT partner’s clients and can be made available to end-users. This new development makes the IT partner’s cloud management more time efficient, while maintaining a clear overview of the cloud services in use. At the same time it also gives the end-user more flexibility to self-service the purchase and provisioning of the desired cloud services.
3 Security, security, security
It is no secret that cyberattacks, ranging from ransomware to data theft, have been on the rise for quite a while, and show no signs of stopping anytime soon. The massive wave of employees working from home, over unsecured internet connections, and storing company data on non-company devices, has only exacerbated this trend.
It’s your job to protect your clients
Protecting clients’ data and endpoints against these threats and ensuring compliance is increasingly the prerogative as of the IT partner. And just like “location, location, location” directly affects home value, security now plays a much more significant role as a defining factor in determining an IT partner’s added value.
Hackers increasingly targeting small and medium sized businesses
The cyber-attacks against SolarWinds and Kaseya prove that both vendors and managed service providers (MSPs) can become an attack vector for hackers and be user to breach into an end-user environment and gain access to valuable data. It isn’t just the enterprise and large corporations that are being targeted either. As larger organizations shore up their defenses, small and medium sized businesses (SMBs) are becoming the new target for cybercriminals. Data shows 43% of all cyber-attacks target medium and small businesses, while 60% of SMBs do not have a cyber-attack prevention plan in place. Research also shows that the top three security cloud solutions IT partners are considering of adding to their product portfolio are ransomware protection, threat hunting and endpoint protection solutions.
4 SaaS sprawl
Another trend in cloud management is license sprawl or SaaS sprawl – the growth in both the number of licenses purchased for and number of different SaaS solutions used within an organization. The growth is accelerated by the consumerization of IT and the subsequent rise of shadow IT.
SaaS sprawl can cause inefficiencies that create unnecessary costs. Different teams within the same organization might be using different cloud services for the same use case. For example, using Slack and Microsoft Teams increases the number of support tickets, and therefore, the cost. End-users might also purchase cloud services before they are needed, or forget to cancel them after their usage has ended. Since cloud services run on subscription-based licensing models the associated costs can ramp up quickly.
Compliance & silo-ing data
SaaS sprawl can also be the cause of security issues or compliance issues. End-users can use the incorrect access and security settings for cloud services. Company data might be stored in different public clouds, creating siloed data and management issues.
Ultimately, it is up to the IT partner to support their clients in fixing the SaaS sprawl issue. By rightsizing IT with efficient license management, reporting and automation, the IT provider can avoid unused licenses, cut down unneeded purchases, lower support cost and fix security and compliance issues.
5 Customer retention
The need to focus more on customer retention and lowering monthly recurring revenue (MRR) churn is also important for IT partners in managing their tech stack. The rise of cloud services has made it more convenient for companies to start, adjust or cancel the software subscriptions they use at any given time, and has also made it easier for them to switch IT partners.
New sales approach
To increase customer retention IT partners need to have clear insights into what the client’s needs are, especially if and when they are changing. That requires more frequent touch points with clients, and a different approach to sales. To better build out customer relationships IT partners increasingly rely on clear data and insights into cloud services adoption and usage by end-users.
Some IT partners are able to add value by training end-users, which helps drive usage and lowers MRR churn. IT partners also combine insights and more frequent customer contact with automated processes and workflows and seamless delivery of cloud services, so that when a client’s needs change, the IT partner is able to quickly and efficiently adapt and support their clients.
Learn more about the future of cloud management
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