The managed cloud services market is forecasted to reach $60.7 billion in revenue by 2027 after growing at a 12 percent compound annual rate. The bulk of those managed services are naturally going to be provided by the cloud service providers themselves, but there is still plenty of opportunity for other managed service providers (MSPs) as more organizations embrace hybrid cloud computing.
The shift to hybrid cloud
Most organizations today are using multiple clouds by coincidence. They generally rely on one primary cloud for the bulk of the workloads, but for one reason or another, there is usually a smattering of workloads running on one or two other clouds. However, as organizations become more comfortable with cloud computing there is now a greater willingness to embrace hybrid cloud computing by design. This is because either one cloud is perceived to be better suited for a specific type of workload, or it is to reduce costs by making cloud service providers compete more aggressively for the privilege of running any given workload.
At the same time, more organizations are starting to repatriate some workloads to on-premises IT environments. In the wake of the COVID-19 pandemic era that saw just about every workload being deployed by default in a cloud computing environment, IT leaders in the face of ongoing economic headwinds are determining there are certain classes of long-running workloads that are less expensive to run in an on-premises IT environment.
Lack of expertise leads to MSP opportunity
The challenge organizations are running into is the level of hybrid cloud computing expertise that they possess is limited. In fact, most already struggle to efficiently manage their existing cloud computing platform. However, in a recent survey of 400 senior IT professionals from organizations with 250+ employees across the U.S., Canada, and the United Kingdom finds more than half (52 percent) concede their organizations have wasted significant IT spending due to inefficiencies with cloud platforms and services. A total of 62 percent agree that a lack of internal expertise has prevented them from expediting cloud implementations.
Nearly three quarters (73 percent) also report their cloud investment has resulted in higher-than-expected IT costs within the last 12 months. A full 92 percent noted they are likely to conduct a full return-on-investment (ROI) analysis of cloud spending.
While many organizations may want to employ additional cloud services for strategic reasons, it’s apparent their ability to execute that strategy is limited. Many of them will turn to MSPs to help them manage the hybrid cloud computing environments that are rapidly becoming complex. As that transition occurs, many of those organizations will look to MSPs that have expertise in managing multiple clouds rather than defaulting to the managed services made available by the cloud service provider.
Of course, not every MSP can manage multiple clouds equally well. Many of them will need to invest in additional tools and training as workloads become increasingly distributed across multiple clouds and on-premises IT environments that now include various types of edge computing platforms. The challenge now is acquiring the hybrid cloud computing expertise required to successfully manage workloads wherever they are deployed.
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