Cloud Services and Managed Services seem like they would be two products that work hand in hand to provide a killer experience to your clients. By coupling cloud and managed services you can cover your client end-to-end from email, document sharing, remote access, and more. More often, though, it seems that, at least from a sales perspective, cloud service and managed services find themselves at odds.
There is a thought process that a business needs to adopt in order to work well with cloud applications. Cloud services frees them from the shackles of the office. They can access whatever data they want when they want to access it. While the benefits from cloud applications are clear as day to those who want them, they tend to make companies treat technology as more of a disposable resource. This takes away from the selling point of Managed Services which is to take care of a company’s technology.
If they consider the technology disposable, then they will also consider the company that provides care for that technology more like fast food than as a fancy steakhouse. You don’t need top technical help for trash-tier technology that can be easily replaced. They would rather invest heavily in the cloud infrastructure. So you don’t sell “service”, you sell “function”.
Conversely, Managed Services in its most perfect form is a premium service. You are there to handle all technology concerns in a company’s office. They rely on you to make sure that business runs as usual. If something doesn’t work right, or they need technical help, they know that you and your team are only a call away.
So what is the primary differentiator between a company who wants an MSP and a company who wants a CSP?
One of the easiest indicators is where their servers are located. Is all their data in the cloud? Then a CSP is a better option. Are their servers on site? Then they are likely going to want an MSP. That doesn’t mean that a client isn’t willing to change, but then you are selling them on a new technology philosophy.
This was a lesson hard learned for us here at Virtual Administrator. When we brought CloudJumper on as a vendor we learned this difference while working with our partners to try to sell Cloud Services to their clients. Our partners are primarily MSPs, and they often had difficulty closing open deals selling cloud services to their clients. But the few who focused 100% on cloud services took off running at mach 12 closing new leads.
For many of our partners, it quickly became apparent that Cloud Services were pseudo-cannibalizing their Managed Services businesses and they were having trouble finding where Cloud Services fit into their business model.
The answer is simple enough. When you are talking with a prospective client, you need to find out where they want their core data and apps to be located. If they see the benefits of the cloud, then don’t even bother selling them on Managed Services. It will be much easier to close the deal by offering them the freedom of a Cloud Services solution.
On the other hand, if that client doesn’t like letting go of the control of their data and apps, then cloud services is going to be a difficult sell. You will be better off putting forward a Managed Services solution and all the white glove technical support that comes with it.
An MSP can operate as a CSP and vice versa. Having plans for both will open up additional opportunities for your company. Also, the nice thing about Cloud programs like CloudJumper is that you don’t have to worry about managing the technology either, since CloudJumper will do most of the work on your behalf.
So are you an MSP or a CSP? I believe you can be both. But you have to train your sales staff to spot the difference between a client who wants to live in the cloud and someone who’d prefer a more local solution. There are benefits to both, and one isn’t going to consume the other completely (at least not in the near future). However, Cloud Services is here to stay, and offering cloud solutions will open up a new and growing market to your IT Company.
What are your thoughts. Do you cross the line between CSP and MSP at your own company? How have you managed to communicate to your clients that you offer both Managed Services and Cloud Services? Or have you decided to niche down and focus on one or the other? Would love to discuss this with you and see what the thoughts are in the industry! Hit us up in the comments below.
