Part two in a three-part series.  In part one of this series, we discussed how important it is to embrace cloud and application innovations, the innovation cycle, and the changing role of IT.

In today’s business world, every enterprise has at least one relationship with a Managed Service Provider (MSP). That relationship has evolved over time. But now, it’s changing again—to the advantage of the enterprise and its customers (both internally and externally).

Looking back on the MSP relationship – resell, manage and integrate

MSPs entered the tech market when organizations asked them not only to resell, but also integrate and manage finished solutions. Reselling began in the late 1990s, as the internet became the foundation of our lives. At that time hosting providers, typically, played two roles:

  • Internet access – for individuals and companies; and
  • Renting server rack space – for corporate applications (mostly websites).

This evolved to rentable IT administrators, who took on the tasks of managing hardware, operating systems and, increasingly, the middleware and applications that ran on those servers. In this world of hardware evolution, the hosting market was a lucrative and a well-protected space, with players like IBM doing very well—until cloud computing came along and started the software evolution.

SaaS enters the picture and creates a disruption in application management

With the introduction of Software as a Service (SaaS), applications were delivered and managed directly by the manufacturers. Salesforce started in this market by targeting smaller firms, with lower enterprise-grade expectations and line of business budgets. By the time SaaS started penetrating the enterprise market, its multi-tenant, highly scalable deployment model and its new pay-per-user business were hard for hosted providers to match—and the fight was on.

Public cloud platforms added to the competitive threat by extending the SaaS basics to hosted applications. Now, application outsourcing, the core business of hosting, and even IT managing the show within an organization, are all under threat.

Based on this scenario, you’d think the roles of IT departments and MSPs are diminishing as application management shifts in the SaaS based model, however that’s not accurate. In reality these roles are just starting to evolve in the business lifecycle.

Not a binary shift or a free management ride

What we’re seeing is the evaporation of traditional hosting/on-premises and application outsourcing/internal options, as more applications move to SaaS or cloud offerings. This isn’t a binary shift—nor are we getting a free ride from a management and monitoring perspective.

Look a little deeper, and you’ll find that a large percentage of critical workloads don’t fit onto cloud platforms, nor can they be replaced by SaaS. It’s just that the definition of an application is shifting.

Managing the complexity of a highly blended mix

Let’s consider, as an example, the common business process of e-commerce. This is not one application; it’s a workflow that blends together multiple applications including ERP, CRM, commerce, machine learning, mobile and web, content management and various other elements. Now, if that organization has been around for more than 10 years, there are likely some pretty customized elements in that mix. We’re constantly refining this type of workflow to stay competitive, improve customer experience and adapt, as end users experiences and needs are evolving every day.

Now, add the complexity of containers such as Docker. New applications will be built more and more around this technology; migrations or upgrades of traditional applications will be forced down this path; and some legacy apps, built in the traditional model, are out of scope but still need to be part of this framework. Hence, the whole dev-ops concept becomes extremely crucial as the development team and the IT team need to work more closely than ever, as cloud, containers, Bots, virtual reality, holograms, 3D printers, continue to drive innovation and disruptions in both technology and user experience.

So given the changes we are seeing in applications and the shift to cloud, here’s the “best-guess” end result—a highly blended mix where certain elements are shifted to SaaS, others moved to cloud platforms, and a third group that can’t make the move but must still remain part of the picture.

If we look a little further into the next evolution of MSP, it will evolve even more as the management of infrastructure and applications in turn become commoditized, businesses will be looking for an MSP that can provide business value through insights from integrated data or siloed data, to make smarter decisions. Hence you see suddenly big data, IoT, analytics and machine learning taking the centre stage.

Are you set up to handle and thrive in this digital disruption?

In part three of our three-part Innovative Disruption series, we’ll discuss the future of the MSP in this blended environment—in particular, managing the cloud handshake.

Read part one – Innovative Disruption: Applications and Cloud Are Creating Waves – Surf or Get Left Behind

Read part three – Innovative Disruption: Surviving and Thriving By Managing the ‘Cloud Handshake’