Despite the spike in demand for cloud computing services in 2024, consumption is expected to increase further as organizations head into 2025. This growth is mainly driven by the rise of artificial intelligence (AI) applications.
A report from Synergy Research Group data notes that spending on cloud infrastructure grew 48 percent last year, now accounting for 55 percent of spending on data center hardware and software.
A separate survey of 500 IT decision-makers in the U.S. conducted by Wanclouds suggests that the frenetic level of spending on cloud services is only going to increase. The survey finds that 89 percent of respondents work for organizations planning to increase cloud budgets in 2025. Additionally, 84 percent are implementing hybrid or multi-cloud strategies.
Additionally, the survey finds that more than half (52 percent) of respondents host most of their AI workloads on private clouds.
Distinguishing between cloud service offerings is challenging
While a flood typically lifts all boats, it’s unclear who will manage cloud computing services and to what degree. All the major cloud service providers have their own managed services. Many of these services are resold by partners who add additional complementary services. The issue is that customers may find it challenging to distinguish between all the managed services that providers offer. In fact, in many instances, a third-party managed service provider (MSP) may be reselling a core service while providing other services that, in one way or another, compete with a service provided by a hyperscaler such as Amazon Web Services (AWS), Microsoft, or Google.
On top of that, many enterprise customers must utilize a minimum level of infrastructure to unlock the discounts offered through their annual contracts. In many cases, MSPs find that smaller organizations that lack access to volume discounts need their expertise more than larger enterprises.
Finally, many organizations remain unsure about how much they will need to manage IT infrastructure in the age of AI. The Wanclouds survey finds that 61 percent of respondents expect to be able to use AI to optimize consumption of cloud infrastructure. That will prove to be especially critical for AI applications that today mainly consume expensive graphical processor unit (GPU) resources.
Specializing in cloud security can be a boon for MSPs
Ultimately, MSPs can’t afford to ignore cloud computing. However, to be successful, they need to have a point of differentiation, such as specializing in cloud security. In that sense, the MSP sees how organizations consume cloud computing services as a means to an end. Ideally, they would participate in the sale of the cloud service to ensure they have the opportunity to sell additional services. However, this may not always be an absolute requirement.
Arguably, the best thing about the shared responsibility model for cloud computing from an MSP perspective is the opportunities it creates. These opportunities arise after the initial sale. This model leaves plenty of room for MSPs to capitalize on additional services. The real challenge with cloud computing isn’t convincing others to adopt it. Instead, it’s ensuring that it remains profitable enough to justify the effort.
Photo: Min Chiu / Shutterstock
This post originally appeared on Smarter MSP.