‘Perfect storm’ creates perfect opportunity for MSPs that have their houses in order

At HyAlto, we are constantly keeping our finger on the pulse of what’s going on across the breadth of the cloud ecosystem. Insight into where the market is headed not only highlights where growth opportunities lie for MSPs, but also how their business operations may have to evolve to take advantage.

The elephant in the room of course continues to be the pandemic. It’s old news by now how the first months were best characterized as a mad scramble, as organizations of all sizes and all stripes shifted teams to remote working literally overnight.

The real question now is how the pandemic response has impacted IT budget planning and execution.

In such a chaotic time, it’s only to be expected that IT spending plans developed and approved a year ago had to be sidelined or reimagined to fit the changing needs of the organization. While the need to shift to remote working may have accelerated digital transformation plans in some respects, other IT projects important to future business success may have stalled. In addition, all this change in such a short period may mean that inefficient spending will have to be addressed in 2021.

A few months back, managed cloud provider Rackspace published a white paper titled “Technology Budgets: Managing Shifting Priorities,” which surveyed more than 1,500 technology decision makers in 10 countries.

Pandemic raises fresh cost concerns for 78% of respondents

The survey asked these CSOs, CIOs, CTOs and other IT leaders about their IT spends, their approaches to cost management and the challenges their organizations now face to conduct business during a pandemic. These respondents work across many verticals – the public sector/government, healthcare, media, financial services, manufacturing and retail.

From the perspective of what role an MSP has to play, a few things in the survey jumped out.

First, Rackspace’s line about a “perfect storm” of budget confusion around COVID-19 certainly makes sense. About 78 per cent of respondents reported new concerns around IT costs because of the urgent needs that arose with the pandemic. These include:

– A need for business continuity programs for 44 per cent of respondents

– Lack of preparedness for different working arrangements, namely remote working, for 29 per cent

– Lack of adaptability to change for 34 per cent

– Not enough employees with the right skills for 28 per cent

– Inflexible IT processes for 24 per cent

As a consequence:

– 59 per cent will be increasing spend related to tools for remote working

– 35 per cent will be updating SaaS tools

– 43 per cent will be updating software and licensing

– 27 per cent will be investing in data centre or colocation services

The pressure to adjust and avoid cloud overspend

In all, 80 per cent of respondents reported that they would be increasing IT spend due to COVID-19 – a figure comparable to what we have seen with other industry reports in recent months. As can be inferred from the points above, much of this increased spend will involve some combination of public and private cloud services.

Procuring a patchwork quilt of cloud services under high-pressure circumstances hits right back to that “perfect storm” analogy. The challenge for small to mid-sized organizations will be how to optimize this investment, to avoid, or rein in, overspending and cloud sprawl.

And that’s just where an enterprising MSP can come into the picture.

These organizations need partners they can trust to help their organizations transition and to ensure the strongest ROI on these new IT spends. MSPs can play this role, provided they have made the right investments in how they operate and deliver services.

It’s always easier, and more profitable, to help someone else get their house in order when yours already is.

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