The most profound impact the transition to cloud computing has arguably had is the shift away from treating IT as a capital expense. IT organizations are increasingly utilizing infrastructure thanks to a consumption model that allows them to treat IT infrastructure as an operating expense. Now many of those same organizations want to acquire the IT products they use in an on-premises environment in the same manner.

Recognizing this trend, Nutanix has announced an alliance with Hewlett-Packard Enterprise (HPE), under which it will make the Nutanix Enterprise Cloud OS available as an option for the HPE GreenLake managed service. Provided via the HPE PointNext, an IT service organization operating within HPE, the HPE Greenlake managed service is paid using metering software that HPE embeds within the system.

This enables HPE to replicate the same consumption model that cloud service providers employ within an on-premises IT environment. That approach differs substantially from offerings that allow customers to treat IT infrastructure as an operating expense by allowing them to pay a fix cost on a monthly basis over the course of a multi-year contract. That latter approach, in fact, differs very little from a traditional leasing agreement.

Changes in pricing models

This same shift is also starting to play out with software as well. Most software-as-a-service (SaaS) applications today are offered on a per user/per month basis, so long as the organization commits to a contract that lasts for a year or more. However, vendors such as Zoho have been gaining traction, in part because they have eliminated the need to commit to a specific amount of time.

Now, vendors are shifting towards a subscription-based approach to software that will soon include an option to pay for software based on how much it is really used. To achieve that goal, independent software vendors such as Software AG plan to embed open source monitoring software within their middleware offerings. Those tools will then feed data into the metering application in real time.

The challenge MSPs will face as this transition occurs is that whoever does the billing usually owns the customer. HPE, for example, is selling HPE GreenLake direct because most partners don’t have their own metering capability, says Pradeep Kumar, senior vice president for HPE PointNext.

MSPs still have a few cards to play. Most customers prefer getting a single bill for their IT services so paying a separate bill from HPE might not be that compelling over the long term. There’s also nothing stopping MSPs from adding their own metering capability. In fact, chances are good distributors will soon figure out how to broadly apply metering to both IT infrastructure and software on behalf of MSPs.

Regardless of the path taken, it’s clear that the way IT infrastructure is consumed in on-premises IT environments is changing. Much of that shift should substantially benefit MSPs, who will increasingly operate much like a utility. Like any utility, it’s not possible to charge for a service unless there’s some reliable way to check whether the meter is actually running.

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Photo: James Teohart / Shutterstock

Mike Vizard

Posted by Mike Vizard

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications including InfoWorld, eWeek, CRN, Baseline, ComputerWorld, TMCNet, and Digital Review. He currently blogs for IT Business Edge and contributes to CIOinsight, The Channel Insider, Programmableweb and Slashdot. Mike blogs about emerging cloud technology for Smarter MSP.

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