Most managed service providers also resell hardware and software, so the shift to the cloud has forced them to rebalance their revenue streams. As more applications are consumed as a cloud service, an MSP’s balance sheet fundamentally changes. Instead of generating most profits in a single quarter, revenue ends up being deferred across what is hopefully a multi-year contract. The real money, of course, comes from the services provided by the MSPs rather than from the margins derived from the cloud services.
There’s usually a tipping point organizations need to reached before they start to appreciate the value of those services, though. Sometime after adding a third cloud service, organizations start to realize data integration is a significant challenge. A new global survey of 1,200 business and IT professionals from Progress, a provider of application development and data integration tools, finds that 35 percent are consuming three or more software-as-service (SaaS) applications. Half of the respondents are consuming at least two SaaS applications.
Data integration opportunities
The opportunity that creates for MSPs is twofold. Not only do those SaaS applications need to be integrated with one another, but invariably there’s also data in applications running on-premises that needs to be integrated as well. In fact, the survey finds that the most widely employed databases are Microsoft SQL Server, MySQL, and Oracle. The most widely employed so-called NoSQL databases are MongoDB, Cassandra, HBase, and Oracle NoSQL.
Most of the modern software being deployed in an enterprise is exposed via an open application programming interface (API). The Progress report notes there are now 16,000 open APIs, with 40 new open APIs being published every week. On top of that, organizations are developing thousands of additional private APIs. The survey finds the that most widely used interfaces are ODBC, REST, SOAP, and JDBC.
The amount of data those APIs are being used to access is also growing exponentially. The Progress survey found that usage of Big Data platforms grew 11 percent year over year. Hadoop Hive is the interface most commonly used to access Big Data platforms, and distributions from Hortonworks, Cloudera, and Amazon Web Services (AWS) are the most widely deployed.
Managing backend services
The most significant finding from a MSP perspective is that 49 percent of the respondents admit that the expanding number of data sources is their biggest challenge. That’s followed by integrating cloud and on-premises data (41 percent), data variety (38 percent), and data volume (32 percent).
The good news is that organizations are becoming less interested in managing backend services themselves, preferring to consume them as a managed service instead. For most businesses, IT is a means to an end. Today, buying IT infrastructure and managing it themselves doesn’t make financial sense for most organizations.
If an organization is going to invest in IT, most of that money will be allocated to an application that enables them to truly differentiate themselves. But, the data those applications access can be anywhere. MSPs should be employed to deliver every nondifferentiated IT service. Identifying those services is often as much a cultural conversation as it is a technical one, though, because so many people have been conditioned to buy IT rather than simply consume it. But with each passing day, it’s becoming clearer to everyone involved that IT truly is just a service much like any other.