Flexera report reaffirms opportunity for MSPs to become cloud optimization experts
As we wrote about in our last blog, springtime brings us a few key benchmark reports that are illuminating for our team and for any MSP trying to gauge where the wind is blowing.
We like to pick through these reports for indicators on cloud adoption – the pain points, challenges and opportunities for MSPs as businesses chart their best path forward with either public, private or hybrid cloud.
This time, we look at Flexera’s 2021 State of Tech Spend Report, headlined with “Organizations are accelerating digital transformation and cloud migration to better respond to COVID 19 and other external factors.”
Now, bear in mind that Flexera is very much public cloud-centric and usually doesn’t give a lot of attention to the MSP market. Still, there are some interesting facts to be gleaned.
Flexera polled for this report 474 executives and high-level IT managers at organizations with 2,000 or more employees.
These respondents identified their top priorities for technology initiatives. Among those that hit HyAlto’s sweet spot, 56 per cent of respondents identified digital transformation, while 48 per cent cited cloud/cloud migration. In fact, cloud is a top priority no matter how Flexera slices its survey data.
But cloud in what form?
Cloud spend continues to point to a combination of on-premise and public cloud resources – 24 per cent of software spending remains on-premise and 30 per cent includes some combination of SaaS, IaaS and PaaS.
Compare this to Kaseya’s survey of MSPs and small- to medium-sized business owners that we covered last time. In that report, only 11 per cent of MSPs said that more than half of their clients have an “all cloud” environment. Meanwhile, more than a quarter of Kaseya’s MSP respondents reported that more than 50 per cent of their client base has a combination of a hybrid cloud/on-premises environment.
Now, back to Flexera. When we look at what percentage of its survey respondents are changing their IT spend due to COVID, there is a net 35 per cent increase in shifts to the public cloud, a net 44 per cent increase to SaaS and a net seven per cent increase to private cloud.
Other datapoints in Flexera’s report further illustrate this continued reliance on a mix of public and on-premise cloud options.
IT spend visibility
Not surprisingly, this leads to new challenges around visibility of IT spend (as we covered in a recent post about the need for IT and Finance to work together). The spend is decentralizing outside of an organization’s IT department, creating issues with so called shadow spend and clear reporting on IT spend by business service. About 51 per cent of Flexera’s survey respondents cite clear reporting as a challenge.
A related issue is lack of quality data to support IT decision making. Couple that with too many manual processes.
Not surprisingly, Flexera found all this has prompted many CIOs to turn to external partner resources, to assist in areas that include several of particular relevance to HyAlto and the MSPs we serve. These include cloud operations, cloud migration and cloud cost management.
Hybrid cloud remains a big part of the market
In summary, it’s reasonable to conclude that the businesses pressures that have been heightened by the pandemic continue to drive businesses to invest in a range of cloud options.
While Flexera emphasizes throughout its report a trend in favour of increased public cloud adoption, we are years ( in our estimation) from public cloud becoming dominant versus a hybrid model. There is simply not enough upside for many organizations to yet put all their eggs in a public cloud basket.
This has left IT decision makers in need of reliable partners and better automation tools to optimize and control their cloud spend. The challenge and opportunity for MSPs is to become that partner. The challenge and opportunity for HyAlto is to help them do it.
Because we have the tools, and MSPs have the talent.