Cloud Managed Services: What’s the ROI?

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Cloudticity, L.L.C.


While some venture into the confusing challenge of the cloud alone, many more have realized the value of a trained cloud expert to guide them. Understanding the value of cloud managed services can help you make sound financial decisions for your organization.

To Cloud or not to Cloud? The CIO Dilemma

There are CIOs in boardrooms around the country who are having to have hard conversations around cloud initiatives. Technology is moving faster than ever before. Technical debt is catching up with them, and a decision must be made. Do they continue down the path they have always gone and invest in a server room full of equipment that will be paid for in the coming years? Equipment that may be obsolete before it is even fully paid off. Or do they move to the cloud, where physical infrastructure is no longer a concern? These CIOs are getting asked questions like:

  • “How much will the IT department cost us over the next three years?”

  • “Why don’t you just have your team move everything into the cloud? Isn’t it supposed to save us money?”

  • “Will you need more staff if we take on a cloud project, or can you train your existing team?”

  • “If we invest in moving resources to the cloud, what value can we expect in return?”

Most CIOs know that the long-term advantages of the cloud are likely the ideal end game. Companies like AWS yell from the rooftops about the 30% potential savings you may find in infrastructure. Articles come out almost daily about new technological advances of the cloud. 

The problem though is how to get there. Building cloud resources is different from on-premises. To use an analogy, imagine you had a studio of talented painters who have spent their careers working on the craft. Over time you hear that everyone is using photography because it takes less time and produces greater results. Your team understands art. Some may have dabbled with cameras, but no one on your team knows all the intricacies needed to make award-winning photos. 

This is why many CIOs will look at outside options to help augment their existing teams. Managed Cloud Services are one of the main ways to do this. To understand the logic behind this decision, it’s important to understand what managed cloud services are and why they can be a solid alternative to building cloud operations internally. Additionally, it’s important to understand the ROI they can deliver.

What are Cloud Managed Services?

Cloud Managed Service Providers are companies that have invested in people and technologies specialized in building cloud resources. Typically called Managed Services Providers (MSPs), these companies use the best technology, sifting through the hundreds of cloud services and over 3,000 third-party vendors in the public cloud. They have specialized staff with industry-specific knowledge that would be hard to find elsewhere.  

By investing in these people and then using them across numerous organizations in an industry, they can adapt to industry-specific needs, such as HITRUST compliance in healthcare. Their deep knowledge makes them ideal for creating agility in the cloud's creation, optimization, and deployment. 

Why Cloud Managed Services?

Managed Cloud Services can make the transition to the cloud more manageable and efficient. They can augment existing staff resources while providing a path for cloud success and reducing the risk of failed cloud deployments. 

Here are some reasons to consider Cloud Managed Services.

Cloud Staff is Hard to Find

The fact of the matter is that finding cloud talent is difficult. Notably, 78% of IT leaders  report experiencing a skills gap in implementing and managing the cloud. This stems from a lack of available cloud talent. Industries such as financial technology pay more than others can afford, leaving a smaller pool for the rest. According to one Robert Half Recruiter, cloud computing remains the most sought-after skill on the market. This means that competition is stiff as ever and looks to stay that way for a while.

Without these resources, the prospect of a successful cloud project becomes bleak. Cross-training employees will often take too long. Spending two years working with the AWS cloud is advised before taking the higher level Solutions Architect certification, which is far too long for most. This is why an MSP can help.

MSPs already have trained staff who have successfully managed many cloud deployments. They understand how to mitigate risk by using proven deployment standards. They’re also able to optimize resources once they are in the cloud to reduce unnecessary spend and improve uptime. 

Cloud Tools Require Expertise to Use Correctly

One of the advantages of the cloud is the pay-as-you-go pricing model. This means that you only pay for what you use. This is great if cloud services are being used correctly but it can cause spiraling costs if not. This is why it is important to ensure the right tools are being used correctly. An MSP will have identified the set of best tools and know exactly how to configure them for success.

It is also vital to consider third-party tools that you plan to deploy. Consider Palo Alto Prisma. Without proper configuration, it is common to receive thousands of alerts. This makes it challenging to identify those which require action and can make the product unusable. It is also a product that requires attention over time. Note in Figure 1 that there are many steps to fully deploy this product, as well as ongoing tuning needed to use it correctly. Without proper execution, you end up with a tool that will cost much money and provides little value.  

Figure 1 (Source: Palo Alto Networks)

Infrastructure Management is not a Business-Differentiating Activity

Finally, not all work that needs to be done will help your organizational goals. You need to ask yourself, “What’s our core function?”. Anything outside of that scope is considered undifferentiated tasks. 

Building cloud infrastructure is challenging and has a significant learning curve. It does not do anything in and of itself to make a company better at what makes them unique. Instead, it provides the backbone on which innovation can thrive.

This is why an MSP can be ideal for building and managing cloud resources. Many mundane and repetitive tasks can be reduced or eliminated by utilizing automation and infrastructure as code (IaC). A good MSP will have spent years perfecting these tools, and your organization can then quickly reap the benefits and free up more time for staff to focus on what is important. 

What’s the ROI of Cloud Managed Services?

The boardroom wants to know most projects' return on Investment (ROI). For the cloud, you only pay for what you use, meaning costs and benefits can vary. Also, the Total Cost of Ownership (TCO) is often a significant factor in figuring out the cost of the cloud. Most organizations use a combination of the two, but the actual value of the cloud is more than just money in versus money out. There is an incredible upside to the cloud that is difficult to quantify using traditional methods. 

Consider the following cloud efficiencies and capabilities.

Agility and Speed of Innovation

A Managed Service Provider can accelerate the move to the cloud and provide ongoing optimization. Once in the cloud, the ability to provision new resources and deploy new technologies skyrockets. With a few clicks of a button, a new environment can spin up, allowing developers to test ideas in minutes. The MSP can help ensure that these environments are secure and remove excess resources that may linger.

Without a trusted partner, the cycle of planning, training, and execution will slow innovation for everyone. 

Ability to Adopt New Technologies

Many of the newest and most innovative technologies today are designed to be cloud-first. With Managed Cloud Services, you will have access to engineers who have often been early adopters and tested them in the early stages. They will be able to identify those services that will best suit your organization.

To experiment with technology such as Azure AI is a simple process if your MSP has already vetted it. They will also have professional services available to integrate multiple technologies.

Compare that to previous on-premises deployments. You would have to make a significant budgetary decision on new technology, plan over time, and run significant risks if things do not pan out.   

Enhanced Focus on Core Business

When mundane administrative tasks are off your plate, there is more time to focus on the core business. Eliminate the maintenance of physical infrastructure, and you can refocus your team. Allow quick iterations and testing for developers, and development cycles accelerate. 

These will be greatly augmented when an MSP does the heavy lifting. They will have developed automation scripting in advance, do the heavy lifting of infrastructure migration, and provide safeguards for development.

These are all benefits that will help your core business thrive. This is why “More than 90” of Fortune 100 companies and the majority of Fortune 500 companies utilize AWS,” and thousands are joining similar services like Microsoft Azure and Google Cloud Platform daily. 

Are Cloud Managed Services Worth it?

Every company must decide for itself, but the costs of internal expertise, tools, and management will often be dwarfed by the many advantages an MSP can provide. Consider the benefits that you can receive.

  • Expertise: Experienced experts who can create a custom plan for your success based on many previous deployments.

  • Best-in-Breed tools: A stack of tools and services which have been carefully curated, developed, and optimized. 

  • Reduced cloud costs: Ongoing cost and performance optimization resources to ensure long-term success.

  • Solve complex cloud problems: Professional services to help with deep integrations and unique projects.

  • Improve your cloud knowledge: Knowledge transfer to your staff from experts in the cloud. 

  • Increased Security: Using automation and IaC, security protocols will automatically be applied to any new deployments in your cloud environment.

Cloudticity as Your Cloud Managed Services Provider

Cloudticity is a 100% Healthcare Dedicated Cloud Services Provider with over a decade of cloud experience. With a specialized program for HITRUST Inheritance and a team of dedicated engineers, Cloudticity has protected over 100 million patient records. If you want to learn more, schedule a Free Consultation.

ROI of cloud investment

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