How Smart MSPs are Collaborating with Customers to Control Cloud Costs

There are no signs of the MSP industry slowing down any time soon, in spite of and in some cases because of the economic climate. The benefits of digital transformation, as more business operations and applications are moving to the cloud, are clear: why invest in on-premises equipment and software when cloud infrastructure is so widely available and increasingly stable?

The MSPs who made an early pivot to the cloud and who took on a leadership role in their customers' cloud operations drove up their market share. At the same time, they deepened their relationships with customers who now are highly dependent on those MSPs to give them the tools they need to compete and grow.

The 2022 Cloud Infrastructure Report, conducted by Dimensional Research, revealed that 71% of respondents rely on an MSP for some portion of their cloud operations.

The research also reported that 100% of companies working with an MSP said that they benefit in some way from that relationship, with benefits that include:

• Gaining expertise they don't have internally (55%)
• Increasing productivity (53%)
• Enhancing or maintaining security and compliance (49%)
• Reducing overall cloud costs (38%), and
• Finding support for innovation (35%).

"MSPs can bring more value to their customers when they engage with their customers and advocate for them," said Ben McGahon, founder and CEO of Kalibr8, a next-generation cloud optimization platform that uses automation and AI to understand and adjust cloud consumption constantly. "Just as we worked closely with many highly successful MSPs to develop our platform, those MSPs showed us how closely they work with their customers as digital transformation sherpas, truly invested in understanding where their customers wished to go."

McGahon noted a commonality amongst fast-growing MSPs:  Constantly keeping in touch and making sure each customer knew they were seeking ways to help control their IT expenses, especially the often-mysterious and previously unpredictable surge in the cost of cloud compute, storage, microservices, and more.

"With the help of our cloud optimization platform, MSPs can bring their customers smart ways to save while also improving their own bottom lines through cost efficiencies and productivity gains based on time automated solutions like ours deliver,” he said.

According to the same 2022 Cloud Infrastructure Report, just 21% of enterprises reported that they were "very confident" in the visibility, they had into their public cloud costs, and 15% weren't confident at all. Since 2021, the number of "very confident" responses has decreased by 10%. Meanwhile, the number of those lacking cloud cost confidence has trended upward.

"In 2023, there is an exciting new opportunity for MSPs to understand precisely what they are spending by customer, and what they are charging by customer, by constantly scanning their cloud infrastructure and services," McGahon said. "The difference now is that with AI-driven software, it is easy to understand where the money is being spent wisely or being wasted, and not just at the end of each month – but in the middle of each business day. When one adds notifications and alerts based on policy and anomalies, MSPs can be heroic and not hidden, as a vocal advocate for controlling expenses but never at the expense of quality of service."

McMahon, who has decades of experience running MSPs before developing the Kalibr8 platform, said he learned that optimizing cloud costs is more than reporting and looking at spending trends and sending along monthly and quarterly reports.

"Cloud is more than just a way to reduce on-premises legacy costs," McMahon said. "Planned properly, moving to the cloud can be a fundamental part of business strategy, supporting better products and services for customers, offering more competitive experiences, and re-engineering nearly every aspect of their workflow."

However, to date, cloud optimization software has not been designed for the specific use case of MSPs. Kalibr8 changes this. The platform has been designed to enable the MSP to cater to their specific requirements and automate daily administration so MSPs can focus resources on other value-added tasks.

McMahon said that, regardless of where each customer is or which industry they operate in, their MSP can play a pivotal role in guiding their ongoing transformation.

"With more transparency and better and constantly updated information that can be acted upon with confidence, MSPs who collaborate with their customers to derive greater value from the cloud will keep those customers forever,” he explained. “There is no better way to serve customers for years than to leverage more automated, intelligent, real-time cloud optimization tools, which improve results for both the MSP and each of their customers. 2023 will be the year of cloud control through cloud confidence."