From The Expert Feature Article
August 19, 2013

What if MSPs Ran Most of IT?

Jon Tonti, writing for, wonders out loud (actually, onscreen) what would happen if MSPs ran the bulk of enterprise computing. It is a similar question to what if the bulk of enterprise computing moved to the cloud, which is a more common and simpler query.

Let’s take the latter first. If IT moves to the cloud, then of course the economics shift from CAPEX to OPEX (News - Alert).

IT work meanwhile shifts from managing physical infrastructure, to managing virtual infrastructure and cloud apps. But much management, indeed even admin work, stays put in this scenario.

MSPs take it to a higher level, because the bulk of management and indeed admin work is transferred from IT to the service provider.

Image via Shutterstock

But enough for now of what MSP Today thinks of MSPs and enterprise computing. Let’s get back to Tonti and tease out his thoughts.

First, Tonti sees MSPs as more than ready to play an ever more important role. “In the relatively recent past, we have crossed the threshold where it is now ‘technically and economically feasible’ for any organization to transfer all their technology needs to managed service providers (MSPs),” Tonti argues.

Tonti then wonders how it would be if MSPs took over vast swaths of enterprise computing and reached out to MSP author and consultant Jon Parkinson of Parkwood Advisors for a few answers.

Here is what Parkinson had to say.

“I did a consulting project for one of the big global tech firms looking at what the macro-economic impact on the industry would be if the majority of what is currently on-premises IT were provided as managed services. How many people does it take to run global IT if it is provided the same way as a phone service or electricity – a managed service – by some number of peer service providers and you don’t have all the people in-house you have today? What does the industry look like, how big does it have to be, and what skills do you have to have to make that work?  The headline is that you only need about 40 percent as many people,” Parkinson told Tonti.

As IT moves to the cloud and managed services, it will take fewer and fewer admins to handle the same number of users. Parkinson used the need to support 100 users as his point of reference.

“Today it might take 30 because the 100 users are in 10 different companies, tomorrow it will take 10 because it doesn’t matter where they are…basically you create a user-cloud, and yes, you have to build in privacy, security, and some multi-tenant type handling capabilities, but if you presume you can solve those problems, which we can or are close too, then you are a much more efficient user of human capital in technology, which is good because there isn’t enough of it,” he explained.

Newer companies, especially well-thought-out startups, are eschewing on-premises infrastructure – and their investors are driving this move. “The PE guys won’t give money to these companies to buy technology anymore; they just don’t want money tied up in technical assets,” said Parkinson.

What Does it All Really Mean?

But this doesn’t really answer what this means for IT, so let’s let MSP Today take a stab at that question.

Of course the move to the cloud and especially managed services changes the IT equation and Parkinson is right that far fewer IT folks, at least low-end workers, are needed. Instead there is a dramatic shift to high-end functions and strategic thinking and invention.

A recent white paper from Nemertes Research, “Shift to ‘Enterprise Technology’ Relies Upon Vendor Partners for Managed, Cloud Services,” makes the point well.

The basic idea of Robin Gareiss, founder and executive vice president of Nemertes, is that enterprises are moving from Information Technology (IT) driven to Enterprise Technology (ET) focused. “Not only does this shift change the way business leaders View IT, it also alters the organizational structure of IT itself. In the ET world, the technology Team becomes more strategic, and as a result, it relies more heavily on trusted partners to handle tactical functions—and in some cases, assist in strategic direction of the company,” she said.

MSPs reap many of the rewards of this shift. “Managed and cloud services are playing an increasingly important role in enterprise organizations, with the network itself serving as the foundation for effective and strategic ET policy. IT leaders must define a new operating model that allows for innovation and adapts to the changes in the business climate and in the demand for services,” she added.

So what happens to IT? The top IT thinkers transform into “trusted advisors” to the business units, advising on how technology can solve problems or create opportunities.

One MSP Points the Way

So far we’ve heard from a consultant and a researcher. MSP Stratalux is also on the case with its “7 Principles of Highly Effective Cloud Operations” white paper. The concepts are similar to Nemertes, but the nomenclature is different as Stratalux believes that enterprises should move from focusing on IT operations (ITOps) to CloudOps. By moving to the cloud, most operational duties are lifted from IT shoulders. This requires a move to the public cloud as private clouds still require lots of IT time and attention.

By moving to CloudOps, IT can become much more strategic, and a true business enabler.

“IT’s role will change from one which configures and manages infrastructure, to one that develops infrastructure, enabling services such as Infrastructure-as-Code, Continuous Integration/Continuous Deployment, and self-healing infrastructures all of which fall under the broader ‘DevOps’ movement,” Stratalux argues.

Edited by Alisen Downey