Cloud computing has become a key enabler of businesses. As technologies continuously evolve, an enterprise may not have all the capabilities in-house for successful cloud implementation and management. A lack of resources and in-house cloud expertise has continued to be a challenge, with 78% of the respondents in a survey citing it as a barrier to cloud adoption. As a result, enterprises have been augmenting their internal cloud resources with external expertise to realize the benefits of the cloud. The external sourcing of cloud expertise can help them to optimize costs and improve ROI (return on investment), which is essential considering that 28% of the cloud spend is wasted.
On average, the company staffs around 40 per cent of its cloud needs in-house while sourcing the remaining resources from third-party vendors. Even as enterprises plan to augment their internal cloud capabilities by proportionately higher spending on cloud talent, they will continue to rely on managed cloud service providers to complement their in-house team.
What is a managed cloud service?
Managed cloud services refer to outsourcing enterprise cloud computing to a third-party service provider with defined performance levels. The managed cloud service provider's (MCSP) responsibilities include migration, management and maintenance, configuration, optimization, security, and others per the specific industry and business requirements. The selection of MCSP requires broad-based evaluation criteria to holistically assess the providers and identify the best fit for the organization.
Why use managed cloud services?
The collaboration with MCSP can help enterprises achieve various technology and business objectives. Some of the advantages of using managed cloud services are listed below:
- Ensure Service Level Agreement (SLA) based performance guarantees
SLA-based services ensure better control over service levels and business continuity. The SLA outlines a pre-agreed set of criteria and metrics and MCSPs use these metrics as benchmarks to monitor the performance. With this approach, businesses get a better control over their desired service levels, and consistently support their business continuity goals.
- Cost optimization
Many MCSPs offer a tiered, subscription pricing model to meet the different needs of enterprises. The flexible pricing model helps ensure enterprise cloud expenses are within budget and tailored to their requirements.
Additionally, enterprises save cost on human resources by having the bare minimum of qualified cloud resources that are in high demand and expensive.
- Integrating cloud services
The hybrid cloud environment is the preferred deployment model by enterprises as it enables them to select the best IT infrastructure for each business application. MCSPs integration support becomes crucial in a hybrid cloud environment which can be a mix of on-premises IT infrastructure, private, and third-party public cloud services. The integration support also enables enterprises to combine cloud platforms from multiple vendors.
- Support and Maintenance
MCSPs offer to navigate the complexities of cloud technology with 24/7 management and support. They align network operations with enterprise goals and proactively monitor for security and patch requirements. They advise on best practices, troubleshoot issues and aim to ensure optimal cloud performance and drive business success.
- Disaster recovery and business continuity
To ensure quick recovery of cloud services and applications in the event of a disaster, MCSPs implement robust disaster recovery and backup strategies. For example, by maintaining redundant and highly available cloud infrastructure across different geographical locations, they can quickly replicate critical systems and data, ensuring business operations continue with minimal disruption. This is a key aspect of their service offering and a significant benefit for businesses using managed cloud services.
- System upgrades
Cloud computing constantly evolves, and enterprises risk their network becoming obsolete if not updated and upgraded on time. MCSPs keep abreast of the latest cloud technologies, and enterprises don't have to worry about updating the network and other cloud infrastructure.
- Security & Compliance
Network security is vital when using cloud services. Enterprises may find it difficult to recruit and retain security experts who have highly sought-after skills. MCSPs have dedicated security teams and implement advanced technologies and protocols to ensure the highest level of protection. It includes security measures such as conducting regular security audits and ensuring compliance with relevant regulations.
What are the common challenges faced when working with MCSPs?
While enterprises drive significant value by collaborating with MCSPs, it’s important to identify hurdles that may arise so that you can have a successful collaboration with the service provider. Some of the most prevalent challenges that enterprises should take into account when collaborating with MCSPs include:
- Lack of transparency
Enterprises need to stress on transparency with their service providers. They need to establish clear communication channels and insist on regular reporting, which should create visibility in MCSP activities. Regular audits, reviews and penalties for non-compliance can ensure accountability and transparency in the partnership.
- Discrepancies in invoices and services delivered
One of the critical benefits of collaborating with MCSPs is cost optimization and predictable cloud spending. However, there may be a mismatch between expectations and monthly billing. Even as the reason for fluctuations can be consumption variations across different periods in a billing cycle, other factors can contribute to the billing discrepancy, such as add-on services that were not accounted for or informed by the providers at the time of contracting.
- Security
MCSP data security and compliances may be deficient and lead to data breaches. The lack of robust data security and compliance measures may make the enterprise vulnerable to hackers and cyber threats.
- Technology upgrade and automation challenges
MCSPs may be unable to keep pace with the constantly changing cloud technology, which may prevent enterprises from realizing the benefits of the latest innovations within the cloud computing space. MCSPs inability to keep up with the evolving cloud-scape may limit the gains for enterprises from cloud computing adoption.
How to evaluate MCSP?
Evaluating managed cloud service providers requires a detailed assessment of the provider's cloud expertise and experience, cost structures, customer support, security measures, and other factors. Some of the critical factors that you should consider for evaluating managed cloud service providers are given below.
- Technology expertise and experience
Evaluate the provider's experience working in a multi-vendor, multi-cloud environment. Assess their capabilities in cloud platforms that align with your current environment and objectives. Cloud infrastructure management is crucial for ensuring optimal performance and efficient operation of cloud environments. It involves establishing processes and utilizing the right tools to effectively allocate and deliver vital cloud resources. To evaluate their expertise, you can check their certifications and experience in managing cloud infra.
- Security and Compliance
Evaluate the provider's security measures to ensure data protection and network security. Assess their data encryption practices, network security protocols, and disaster recovery plans. Evaluate their track records of regulatory compliance and different certifications.
- Cloud Migration and Integration
Cloud migration needs to be carefully orchestrated to ensure a successful implementation. The inefficiencies in orchestrating cloud migrations limit the enterprise's ability to realize the full value of the cloud.
Assess the provider's migration capabilities and integration options. You should carefully evaluate their expertise in managing complex migrations and the support offered during migration.
- SLA’s and Contracts
Service level agreement outlines the service level, such as uptime guarantees, issues resolution timelines, services credits or penalties for service disruptions. You should carefully review SLAs and get them vetted by the legal team before agreeing to the contract terms.
- Vendor Lock in
You must assess if the provider has minimal use of proprietary technology or technology components that may restrict your transition to other providers if needed. You must evaluate the provider’s data modernization capabilities, standardization of APIs, and other relevant factors to avoid the risk of vendor lock-in.
- Customer support
As reliance on cloud computing grows, the cost of business disruption on the enterprise can be huge and varies across industries and business segments. Evaluate the provider's customer support channels and response time. You must ensure the provider offers round-the-cloud support for all issues, including critical incidents.
- Reliability and Performance
Assess the provider's track record in delivering high-performance and reliable cloud services. You can analyze the provider performance against SLA going back twelve to eighteen months. Observability and Monitoring have become critical aspects of the modern cloud computing environment. You should ensure the provider has robust observability and monitoring capabilities to ensure your applications and networks run uninterruptedly.
Evaluate if the provider’s monitoring and reporting tools can integrate into your management and reporting systems.
- Cost and Pricing models
Evaluate the provider base pricing models and additional costs like data transfer costs, storage fees, and potential hidden charges. You must evaluate provider cost management and optimization tools and practices that will enable you to keep your cloud spending within your budget.
- Cloud consulting capabilities
MCSP should be capable of assisting you in assessing applications and preparing a business case for the cloud. You should evaluate them for their ability to create a migration roadmap and operation plan post-migration for managing and maintaining cloud services.
Additionally, as the cloud landscape is constantly evolving, the providers should be able to navigate the cloud landscape and guide you in selecting the most appropriate technologies and solutions.
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