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Managing IaaS: The Best Business Models for Cost Control

Posted by Jeff Salanco on May 10, 2017 10:00:00 AM

Partnering with solution providers to understand how to power the cloud is at the core of what we do every day. Recently, one of the more popular topics of conversation has been Infrastructure as a Service (IaaS).

And despite all of the information related to IaaS, IT Solution Providers (ITSP) are still looking for help in charting a course for a profitable go-to-market strategy. In our conversations, one word is carrying significant importance: control.

To strike the proper balance between control and leveraging an external system, ITSP’s are looking to provide end customers with the power of IaaS while mitigating the risk associated with consumption-based technology.  Infrastructure can provide incredible computing power, but this value is greatly diminished if the end users don’t feel they have access.  

Consumption-based technology can expose an ITSP to financial risk if the end user doesn’t have controls in place to address ramps in usage greater than forecasted. Some of these ramps in usage may come from seasonality or an unplanned change in business demands.

The Benefits of the VAR Model and the SP Model

There are two models of IaaS access that are most prominent: managed services and the value-added reseller (VAR) model. With managed services, the provider is controlling the access more directly. In a VAR model, control is placed in the hands of the end user customer via a white label storefront or management platform.  

A cloud platform requires functionality that’s more sophisticated than simple brokerage of IaaS computing. In both models, a tool set that allows for price book automation, usage tracking, a consolidated billing feature, and more can help you manage and optimize multiple cloud environments is foundational.

In the managed services model, the solution provider has the role and responsibility of understanding the end user’s business needs, to plan and structure contracts appropriately. Throughout the planning process an ITSP should provide:

  • Insight into costs to the end user leadership team
  • Analytics software that provides visibility to key points of consumption

This important step provides a mechanism for controls to mitigate risk and unexpected costs.

Providing access to the end customer, as in the case of the VAR model, can allow for rapid deployment of new technologies by the end user. The ITSP’s ability to access a dependable management platform that both the ITSP and the end user can use is great for self-service and after-hours requests. However, the benefit introduces added risk.

Getting your customers up and running quickly with self-guided purchasing and provisioning puts the power directly in their hands through a white-label management platform. This could allow your customer to make changes in production environments and possibly cause outages or create new environments adding unexpected usage. To balance the availability of this access by the client, the platform needs to support automated usage controls (as well as proper client training) to protect the ITSP from unplanned financial risk and potential disruption to the client’s operations.

Want to learn more about finding a platform that provides the level of control that makes the most sense for your IaaS go-to-market strategy? Contact the Tech Data Cloud team at 800-237-8931, ext. 87663 to learn more.

 

Tags: IaaS, Cloud Services

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