Cloud Hosting Pioneer Admonishes Small and Midsize Businesses to Kick the Tires (and Then Some) as They Plan Their Migration to the Cloud
LOS ANGELES (Dec. 12, 2018) – Might the MSP bubble burst in 2019?
“There’s nothing inherently wrong with the Managed Service Provider model, or the market that has evolved around that corner of the IT world,” says Adam Stern, founder and CEO of cloud hosting pioneer Infinitely Virtual. “But as we gear up for 2019, small and midsize businesses need to do so with eyes open, minds clear and wallets in a safe place. “
According to Stern, one new year’s trend to watch: the evolving nature of the MSP market — who’s benefitting and what’s driving it; the ways organizations, especially small and midsize businesses, can make sense of these changes; and how can they avoid being on the receiving end of agendas that have very little to do with what most SMBs need from cloud hosting providers.
MSPs have been around since the turn of the (20th) century but the current guise is a bit different from any remaining vestiges of the ASP model, he suggests. According to ResearchandMarkets, the managed services business is expected to grow from $152 billion in 2017 to nearly $258 billion by 2022, at a CAGR of more than 11 percent. The firm pegs spending on managed and professional services around cloud adoption as accounting for more than 30 percent of all cloud-related spending during the period.
“In my view, this growth isn’t entirely – or even mostly – organic,” Stern says. “The big thumbs on the scale belong to Microsoft, pushing Azure at all costs, and Amazon, doing the same jig with AWS. Microsoft is driving sales through its partner model in unprecedented ways; Amazon combines direct and indirect approaches, but the net is the same for SMBs.
“Because the cost of market entry remains absurdly low, both cloud behemoths are raising armies of mom and pops and other one-offs who hang out a shingle and see mutual benefit in selling their cloud solutions,” he says. “This is transpiring in the absence of the kind of dues-paying, 24x7x365 infrastructure investment that bona fide cloud providers must have.”
Put another way, he notes, “small-fry MSPs are opting to get into a business for which they’re neither prepared nor qualified, ostensibly competing against more established players who have made substantial investments over time (e.g., their own data centers) and recognize that this is tough stuff.” As cloud hosting becomes a check-off item for newbies, local tech support is suddenly MIA.
“Azure and AWS are complicated products, and just because a garage shop calls itself an MSP doesn’t mean that it’s a hosting provider,” Stern says. “It turns out that it’s all far more difficult than most realize, and the average undercapitalized MSP isn’t up to it. Suddenly, folks who looked like wizards discover they can’t actually run a business.”
And that, according to Stern, portends nothing good for IT-dependent small and midsize businesses. “In my view,” he predicts, “2019 looks to be a year of living vigilantly.”
To speak with Adam Stern, please email: firstname.lastname@example.org.
About Infinitely Virtual: The World’s Most Advanced Hosting Environment.
Infinitely Virtual is a leading provider of high quality and affordable Cloud Server technology, capable of delivering services to any type of business, via terminal servers, SharePoint servers and SQL servers – all based on Cloud Servers. Ranked #28th on the Talkin’ Cloud 100 roster of premier hosting providers, Infinitely Virtual has earned the highest rating of “Enterprise-Ready™” in Skyhigh Networks’ CloudTrust™ Program for four of its offerings — Cloud Server Hosting, InfiniteVault, InfiniteProtect and Virtual Terminal Server. The company recently took the #1 spot in HostReview’s Ranking of VPS hosting providers. Founder and CEO Adam Stern is a member of the Forbes Technology Council. Infinitely Virtual was established as a subsidiary of Altay Corporation, and through this partnership, the company provides customers with expert 24×7 technical support. More information about Infinitely Virtual can be found at: http://www.infinitelyvirtual.com, @iv_cloudhosting, or call 866-257-8455.
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