In the cloud and hosting provider world it has always been tough to gain and maintain a competitive advantage and it’s even more complicated today, in an era of massive public cloud providers with even more massive marketing budgets that seemingly cover every vertical and every application type. Long gone are the days where service providers could stick to a single infrastructure and data center playbook; today is now the era of hosting business agility and business model experimentation that will require cloud and hosting providers to really think differently about the services they offer to their customers.
In this post I will share the three most talked about business model changes that we at Nebulon are seeing take place within our service provider customer ecosystem to hopefully help other service provider partners adjust course and help solve their customer cloud business challenges.
1. Managed public cloud solutions
While offering managed public cloud solutions to your customers seems obvious, there are many cloud and hosting providers who are not changing their business model and are still sticking to the same tried and true services that hoster’s have always offered.
There are three main points to consider when it comes to offering managed public cloud solutions. First, if the customer has decided on a cloud first strategy, then it is very likely that you, as a hosting provider, are not going to be the first stop on that cloud journey which will likely begin in order, starting with AWS, MS Azure, then GCP.
Second, you as a cloud and hosting provider, probably have a significant installed base of customers who are only using you for a small portion of their infrastructure services…maybe even just a single application. If you are not talking to your installed base about how you can help them with their cloud strategy and how you can make their lives easier by managing their data in the right cloud location, for the right price with the best support experience, you are missing out on a huge revenue opportunity.
You need to become the trusted infrastructure “broker” for your customers so you can grow wallet share from your current installed base while pursuing net new logos with your new public cloud solutions.
Third, according to Accenture1, in 2021 public cloud spending grew 18.4% so if your customer wants to move some application environments to the public cloud, they will do it with or without your involvement. This is where you, as a cloud and hosting provider, can use the growth momentum of the public cloud to your advantage. Hook your line to the public cloud and wrap your years of white glove support value around it so you can retain your customer base, even if the applications are running out of a public cloud infrastructure.
2. Private cloud infrastructure as-a-service
While many applications, workloads, or uses cases will run perfectly in a public cloud (especially with your white glove support), there are still a huge number of applications that enterprises will never run in a public cloud infrastructure. According to Accenture1, around 50% of all corporate data remains outside of the public cloud and it is these workloads and the associated data that represent a significant growth opportunity for cloud and hosting providers. These enterprises want the cloud operating and consumption experience but with the security, protection and comfort offered by a private cloud infrastructure as a service solution.
3. Private cloud infrastructure as -a -service on-premises
While many enterprises are comfortable consuming private cloud resources in the hosting provider data center, there are many that prefer to keep their private infrastructure much closer to home and this opportunity is probably the biggest business change to how cloud and hosting providers operate today. To move the infrastructure management out of the service provider data center and onto the enterprise customer premises or other physical location like colocation, changes the game when it comes to customer infrastructure provisioning, support, and SLA management. According to analyst firm IDC2, “Dedicated (Private) Cloud Services, which includes hosted private cloud services and the fast-emerging Dedicated Cloud Infrastructure-as-a-Service (DCIaaS) segment, will grow at a faster CAGR of 31.0%, but from a much smaller revenue base of $5 billion in 2021.” By offering Private cloud infrastructure as a service on-premises, cloud and hosting providers can address multiple enterprise business challenges including data and application security, deliver a cloud operating and consumption model and ensure infrastructure proximity to key workers and to the edge.
Outside of the traditional data center solutions that cloud and hosting providers have offered for years, these three solutions: Managed Public Cloud, Private cloud infrastructure as a service and Private cloud infrastructure as a service on-premises, are hot on the roadmaps of many of the Nebulon cloud and hosting provider customers looking to remain relevant to their enterprise customers as they navigate their corporate cloud strategies. For those enterprise customers who have already moved workloads to the public cloud, private cloud infrastructure as-a-service is an easy conversation to have to support the right cloud infrastructure balance for their remaining business and technology needs that won’t be deployed into the public cloud.
In today’s competitive cloud world, the cloud and hosting providers that are changing their business models and re-thinking how and where their customers want to consume cloud infrastructure resources are the ones paving the way and setting the gold standard as the industry leaders for the next wave of cloud and hosting provider market players.
To learn more about how Nebulon solutions are enabling cloud and hosting providers to change their business models and re-think how and where their customers want to consume private cloud infrastructure as a service resources, download our smartIaaS Blueprint for Cloud Service Providers and reach out to me at stuart at Nebulon.com to have a real conversation.