4 Opportunities for Service Providers in a Complex Cloud World

Do you remember the last time you took the wrapping off the box of a new software application?

You loaded it onto your machine, and eagerly waited for it to install? Probably not, or at least not without dusting some cobwebs off your memory.

Much like the mainstream public has moved away from this slow process in favor of downloading their favorite app from an online store in seconds, so too has the world of business moved on. As part of a broader shift toward digital transformation, businesses are increasingly looking to the cloud to ensure they can be nimble, efficient, and ahead of the innovation curve when it comes to delivering apps and other critical workloads.

Hybrid IT—which brings together the optimal mix of public cloud, private cloud, and traditional IT for greater security, performance, and cost—is hastening this shift away from “business as usual” thanks to its ability to transform IT resources into vital business drivers. As a result, businesses are now able to move, develop, and deploy more apps in the cloud than ever before. Better yet, they are using hybrid IT to ensure the right workloads are deployed across the right mix of environments.

Hybrid IT addresses many of the cloud challenges businesses have faced in the past, but that doesn’t mean organizations are ready to go down the hybrid path entirely on their own. According to research conducted by Hewlett Packard Enterprise (HPE) with data sources from Synergy Research Group, Gartner, and 451 Research, the rate of organizations that “build” their own services is growing at 14%, while the rate of organizations that are buying or “consuming” services is increasing more quickly at 30%.

Ultimately, it will be the service providers who deliver the apps that are likely to reap the greatest advantages — and revenue. According to 451 Research’s Market Monitor, Infrastructure-as–a-Service (IaaS) markets, which include managed hosting, shared hosting, and dedicated hosting, will reach a combined $129 billion by 2020.

The service providers that will stand out and step ahead will be those that build an entire hybrid IT portfolio, combining public and private cloud offerings into a unified solution that is ready to handle all workloads. Solutions like HPE ProLiant for Microsoft Azure Stack, the new hybrid IT platform that enables users to deliver Azure private cloud services from within their own data center, will be the foundation on which hardware providers can build an integrated platform.

Service providers have four opportunities to grow their hybrid IT business based on Microsoft Azure Stack. These opportunities span from small steps that extend existing offerings to more strategic endeavors that bring entirely new revenue streams to the business. Yet, they all have potential for service providers of all sizes.

1) Extend offerings to become a managed hybrid IT provider

Many service providers already offer managed private cloud or hosted private cloud services. Consider introducing managed hybrid IT services for Microsoft Azure Stack that build on those established processes, existing customers and experience. Beyond the revenue benefits, such services can also generate greater, longer term value with customers. For example, by offering customers a roadmap for cloud adoption and associated values, helping them determine the data and apps that are viable opportunities for cloud migration, and providing TCO and ROI analysis for moving these applications to the cloud.

2) Offer remote managed services

In many cases, an Independent Software Vendor (ISV) or a Value-Added Reseller (VAR) may not have a data center but can offer remote management services for customer-hosted private clouds. The revenue opportunity lies not only in the management of services but also in additional solutions and services.

3) Provide services to meet compliance regulations

In today’s world, a multitude of compliance regulations hit strongly across many industries. These regulations create an opportunity for managed service providers, ISVs, and system integrators to specialize in building vertical clouds that are compliant to vertical industry standards.

For example, take a regional hosting provider with multiple data centers that is selling to heavily regulated industries like healthcare and financial services. As they look to expand their portfolio, they could deploy a solution that helps their financial services customers meet data sovereignty and compliance regulations.

4) Deliver IaaS, PaaS and IoT services

Systems integrators have a huge opportunity to develop a hybrid IT practice for solutions that include IaaS, Platform-as-a-Service (PaaS) and Internet of Things (IoT) services. As traditional infrastructure evolves to take advantage of the latest architectural and operational options such as software-defined infrastructure, DevOps automation, and flexible capacity, adapting from a private to hybrid IT model to deliver these in-demand services creates immediate revenue potential.

For one managed service provider, adding IaaS, PaaS, IoT, and other value-added services across multiple countries became a cornerstone of its growth strategy. The company turned to HPE to develop a proof of concept at the HPE-Microsoft Azure Stack Innovation Center. Based on that concept, they moved forward with a fully integrated solution that not only met all training, billing, and support requirements, but it also allowed them to offer additional value-added services like remote monitoring and management.

For service providers looking to take advantage of these opportunities, HPE ProLiant for Microsoft Azure Stack delivers the solutions and support that make it easy to deploy, scale, and build a profitable, hybrid IT business. But transforming to a hybrid services delivery model is not a one-time project, and instead should be a planned, systematic journey.

To learn more about HPE hybrid IT solutions for Microsoft Azure Stack that can help on that journey, click here. To learn how HPE ProLiant for Microsoft Azure Stack enables an application-centric hybrid cloud that meets the needs of customers that leverage on-premises and off-premises resources, click here.

About Paul Miller

Paul Miller is Vice President of Marketing for the Software-defined and Cloud Group at Hewlett Packard Enterprise.  The Software-defined and Cloud Group organization is responsible for marketing for composable infrastructure, HPE OneView, HPE SimpliVity hyperconverged solutions and HPE OneSphere portfolio.