Cover Story: Rise Of The Cloud Provider


 

The Progressive Solution Provider

If TrueCloud represents the no-holds-barred Transformative solution provider, then Network Doctor, Englewood Cliffs, N.J., is the classic Progressive solution provider. The company started as a standard break/fix solution provider about nine years ago and slowly made the transition to offering hourly services, time block services, and then to recurring revenue managed services for a fixed monthly fee.

About two years ago, the firm started to offer cloud solutions after securing more space in a data center to help build private cloud solutions with unique VPN lines for each client, said Paul Hilbert, CEO. "Whatever infrastructure they had, we give them the same thing, dedicated to themselves," Hilbert said.

Natural disasters such as the massive power outages on the East Coast caused by Hurricane Irene drove home the point that cloud solutions benefit even small businesses, Hilbert said.

"We have a client who is in mid-migration into our cloud. But they still had servers in their office. They were down for four days. I picked up their servers Monday morning and brought them to our office and they ran here on Citrix. They're begging us now, 'How can we come into your data center? We can't weather another storm.

"The cloud just makes perfect sense. There's no more capital investment with infrastructure. The entire headache goes away. They get to focus on their business."

Hilbert got the idea to go full force into the cloud about two years ago after attending an Everything Channel XChange event in Los Angeles, he said.

"We were in a boardroom talking cloud technologies and how you can probably make more money by doing what you're already doing and just putting it in the cloud. Where there's mystery, there's margin," he said.

A year later, Hilbert attended XChange again and the same conversation was struck. Only Hilbert was shocked at how many solution providers hadn't done any more than just talk about cloud.

"Nobody was doing anything. I wanted to see what everyone was going to sell first, but they said they were not willing to make the investment. I was surprised. You have to be willing to take a risk," he said.

Cloud services now account for about 30 percent of Network Doctor's services revenue. "Two years from now, it will probably be at least 60 percent of services. We have many clients in the pipeline to migrate to the cloud. It's just our operations slowing it down," said Hilbert.

"The other thing is we also rely on compelling events. When they're ready to upgrade servers or do a major upgrade of the network, do they want to spend $100,000 or [use] this service as a monthly fee?" he said.

Hilbert believes there's still time for solution providers to start up a cloud business.

"I don't think it's too late. The product needs to be offered to all clients of all VARs, even if VARs are looking for another provider to be able to do it if they don't want to do it themselves,' Hilbert said. "I think they're willing to outsource, but they do that losing control over the support. Today, we have our own [cloud hosting] infrastructure, but I want to move away from that. There's more flexibility and less capital investment on my part. But one of the major issues is the need to maintain as much control as you can over the environment. A couple of companies are marketing [hosting] to the MSP world and providing everything, but it doesn't give the MSP any leeway to provide their own support."

 

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