Middle Market Focus: The Journey from Managed Service to the Public Cloud

It’s clear that many organizations with managed infrastructure service agreements are taking a long, hard look at new vendor-hosted cloud Infrastructure as a Service (IaaS) offerings. Promises of faster, cheaper and more flexible are hard to ignore. In fact, when TPI surveyed its clients about which cloud-related services they were evaluating, four of the top five areas were related to IaaS, including virtualization, storage and computing services.

TPI believes that the mid-market is taking the lead in adopting cloud-based infrastructures; however, we also have found that as companies begin to investigate the available offerings they quickly find themselves overwhelmed with the options, which can include private, private-managed and public cloud IaaS services.

The IaaS space is growing and maturing very quickly and TPI views these services as a spectrum of possible solutions, not a “one size fits all” market. Here’s why:

• Making the leap from a traditional, non-virtualized managed service to a vendor-hosted private cloud is typically most influenced by technology considerations: will my applications work in a fully virtualized environment? For most modern applications, the answer is yes; however, for legacy applications or large, transaction-intensive databases, virtualization may not be the right approach and may need to stay where they are in a managed service.
• The considerations for moving from a vendor-hosted private cloud to a public cloud offering usually coalesce around business risk: am I comfortable having my data reside on the same physical hardware as other customers? For most data, a multi-tenant environment is appropriate, but there are some categories of data that require more scrutiny (e.g., intellectual property, personal data). In addition, it’s important to understand your clients’ requirements with their data. While it may be totally acceptable to have your data in a shared environment, your clients may feel otherwise. These applications may need to stay within a private cloud environment.

The small- to middle-market is currently leading the way in the adoption of public cloud services for collaboration and customer relationship management (CRM). As more mission critical lines of business and back office applications migrate to the cloud, understanding the key checkpoints along the managed service-to-public cloud spectrum will continue to grow in importance as well.

The Managed Service-to-Public Cloud Spectrum

Based on current trends, TPI believes that many mid-market clients will begin to adopt a “hybrid” approach to the cloud, using services along the spectrum, based on technology fit and appetite for risk. Moving further up the spectrum creates significant opportunities to reduce cost and increase speed, but comes at a price: a more standardized technology stack and increased reliance on shared technology infrastructures.

These services can be sourced from multiple providers to maximize flexibility, or can be purchased from a single provider, in order to leverage buying power. Either way, viewing managed services, private cloud and public cloud as a spectrum of available options will allow you to find the right fit based on your business and technology requirements.

TPI’s seasoned transformational sourcing experts can help your company define the right strategy through our experience, objective advice, industry knowledge and depth in all aspects of information technology and business process services. To learn more about how cloud computing can benefit your organization, or to find out more about TPI’s cloud computing strategy offerings, contact Stanton Jones.

About the author

Stanton helps enterprise IT and sourcing leaders rationalize and capitalize on emerging technology opportunities in the context of the global sourcing industry. He brings extensive knowledge of today’s cloud and automation ecosystems, as well as other disruptive trends that are helping to shape and disrupt the business computing landscape. Stanton has been with ISG for more over a decade. During his tenure he has helped clients develop, negotiate and implement cloud infrastructure sourcing strategies, evaluate and select software-as-a-service platforms, identify and implement best-in-class service brokerage models, and assess how the emerging cloud master architecture can be leveraged for competitive advantage. Stanton has also guided a number of leading service providers in the development of next-generation cloud strategies. Stanton is a recognized industry expert, and has been quoted in CIO, Forbes and The Times of London. You can follow Stanton on Twitter: @stantonmjones.