Over half of MSPs are overspending on Public Cloud

Leaseweb has published the results of new UK research, which revealed more than half (54%) of UK MSPs have spent more than budgeted on hyperscale cloud services in the last 12 months. In addition, over a third (34%) said spiralling costs were currently their top challenge when working with hyperscalers, closely followed by limited customisation and control capabilities (31%) and lack of customer service (29%).

The survey of 201 respondents, conducted at the recent MSP Show in London, gathered data from industry professionals on the benefits and challenges MSPs experience when working with both hyperscale and non-hyperscale public cloud service providers.

The results show that vendor lock-in and complex pricing structures were key concerns for over a quarter (28%) of MSPs working with hyperscale providers, while more than half (54%) reported their providers do not offer a dedicated account manager or don’t know if they do. The combination of these factors has led almost a third (31%) of MSPs to experience challenges that have had a negative impact on their ability to service customers.

The research also found that MSPs experience many of these challenges to a greater or lesser extent with non-hyperscale public cloud services, demonstrating significant room for improvement in how all public cloud service providers meet the expectations of their MSP customers. When it came to working with non-hyperscale public cloud services:

Less than half (47%) spent more than they budgeted for (compared with over half (54%) for hyperscalers)

Significantly more (62%) MSPs do not have a dedicated account manager or do not know if they have one (compared with 54% for hyperscalers)

Over a third (36%) had experienced challenges that had a negative impact on their ability to service customers – (compared with 31% for hyperscalers)

Respondents highlighted that hyperscalers and non-hyperscale public cloud services have completely different appeals, with scalability (61%) emerging on top for hyperscalers, while 24/7 customer support (35%) was the top reported benefit cited for non-hyperscaler public cloud service providers.

“Public cloud services are a key component of the solutions provided by MSPs across the sector, but there remains a number of pain points that need to be addressed,” commented Terry Storrar, Managing Director at Leaseweb UK. “MSPs need to be aware of their options so they can address today’s varied requirements, from hybrid and multi-cloud strategies to repatriation.”

Other key research findings from the research include:

75% of MSPs currently use hyperscale services from providers such as AWS, Microsoft Azure and Google Cloud

The top benefits of hyperscale cloud after scalability (61%) are flexible capacity (51%), and high levels of resilience (43%), closely followed by superior IT architecture at 42%

The top benefit of using non-hyperscale public cloud services after 24/7 customer support (35%) was a flexible on-demand business model (32%)

Only 3.4% said there were no benefits of working with hyperscale providers

Storrar added: “MSPs also need to ask themselves whether they can give customers what they need or if they are locked into a way of working that’s driven by how their hyperscaler or non-hyperscale service provider operates. Instead, an intelligent buying strategy can help MSPs identify infrastructure and service partners that can align more closely with their needs and close the gap between customer expectations and their ability to deliver.”