The data is in: enterprises are not happy with their managed service providers (MSPs) and cloud service providers (CSPs).
According to the latest CloudBolt Industry Insights report, Filling the Gap: Service Providers' Increasingly Important Role in Multi-Cloud Success, which surveyed over 300 senior-level large enterprise MSP/CSP customers worldwide, 80% are so unsatisfied with their existing MSP and/or CSP, they are actively looking to replace them within twelve months.
That means 4 out of 5 enterprises may churn from their current MSP/CSP to a new one in the next year.
But why?
The Multi-Cloud Dilemma
As companies moved to the Cloud, the majority ended up multi-cloud. Splunk's latest State of Security report indicates 65% of enterprises use multiple cloud providers in a meaningful way; 32% use 3 or more. In some cases, multi-cloud was a well-thought-out strategy. But in most cases it was simply the result of rogue/shadow IT, mere choice, or even M&A.
Whichever the case, multi-cloud compounds complexity for cloud operations. Networking, data aggregation, cost structures, security, compliance, workload methodology and operating systems are often handled slightly differently across different clouds. The automations and integrations built for AWS can't simply be lifted and used in Azure or GPC; they have to be built again from the ground up. Many enterprises now find themselves struggling with a growing patchwork of platforms and tools, and most are forced to manually aggregate cloud data from multiple clouds and sources, usually using spreadsheets. To say visibility across it all is opaque is an understatement.
As a result, the costs of a multi-cloud architecture can spiral out of control, sometimes costing more than staying with an on-premise data center. (Skeptical? See the recent study that came out of Andreesen Horowitz, The Cost of a Cloud: The Trillion Dollar Paradox.)
The Skills Gap on Both Ends
The vast majority of enterprises don't have the in-house skills and expertise to manage, optimize, orchestrate, automate and govern multiple clouds; there just aren't enough people with the depth and breadth of knowledge required. Because of this skills gap, enterprises turn to MSPs and CSPs to bring order to their multi-cloud chaos and control spiraling cloud costs. Unfortunately, MSPs/CSPs are largely in the same boat — multi-cloud challenges are growing so fast, MSPs/CSPs can't keep up either.
The personnel issues caused by the pandemic and the resulting Great Resignation have created severe challenges in hiring and retaining employees with the skills that are so desperately needed today by every organization. So MSPs/CSPs are finding it increasingly difficult to meet their customers' expectations. And it's starting to take its toll.
Respondents to the report were asked about the specific areas where they believed their MSPs/CSPs were falling short. The most common answers were:
■ Failure to sufficiently reduce costs (60%)
■ Not offering enough multi-cloud options (58%)
■ Poor performance enabling automation (50%)
■ Lack of visibility across all cloud spending (41%)
A Golden Opportunity
Luckily, enterprises haven't given up on the promise of service providers; most simply believe they haven't found the right one.
85% of enterprises still believe MSPs/CSPs can accelerate digital transformation, and 81% still believe their MSPs/CSPs can save them money. Almost all (97%) would even pay a premium to a provider that delivered on the current shortcomings they identified with their current vendor.
So, what does all this mean?
If you are an enterprise, continue to demand additional and better capabilities from your provider. The status quo isn't good enough to handle your growing multi-cloud complexity.
If you are an MSP/CSP, this could be your moment to leapfrog competitors. With 4 out of 5 enterprises actively seeking a change over the next year, the service providers that can deliver the key "wish-list" capabilities identified in the findings will gain significant advantage and market share. Those who choose to not improve do so at their own peril.
Enterprises have clearly spoken. Which MSPs/CSPs will choose to listen?
The Latest
The use of hybrid multicloud models is forecasted to double over the next one to three years as IT decision makers are facing new pressures to modernize IT infrastructures because of drivers like AI, security, and sustainability, according to the Enterprise Cloud Index (ECI) report from Nutanix ...
Over the last 20 years Digital Employee Experience has become a necessity for companies committed to digital transformation and improving IT experiences. In fact, by 2025, more than 50% of IT organizations will use digital employee experience to prioritize and measure digital initiative success ...
While most companies are now deploying cloud-based technologies, the 2024 Secure Cloud Networking Field Report from Aviatrix found that there is a silent struggle to maximize value from those investments. Many of the challenges organizations have faced over the past several years have evolved, but continue today ...
In our latest research, Cisco's The App Attention Index 2023: Beware the Application Generation, 62% of consumers report their expectations for digital experiences are far higher than they were two years ago, and 64% state they are less forgiving of poor digital services than they were just 12 months ago ...
In MEAN TIME TO INSIGHT Episode 5, Shamus McGillicuddy, VP of Research, Network Infrastructure and Operations, at EMA discusses the network source of truth ...
A vast majority (89%) of organizations have rapidly expanded their technology in the past few years and three quarters (76%) say it's brought with it increased "chaos" that they have to manage, according to Situation Report 2024: Managing Technology Chaos from Software AG ...
In 2024 the number one challenge facing IT teams is a lack of skilled workers, and many are turning to automation as an answer, according to IT Trends: 2024 Industry Report ...
Organizations are continuing to embrace multicloud environments and cloud-native architectures to enable rapid transformation and deliver secure innovation. However, despite the speed, scale, and agility enabled by these modern cloud ecosystems, organizations are struggling to manage the explosion of data they create, according to The state of observability 2024: Overcoming complexity through AI-driven analytics and automation strategies, a report from Dynatrace ...
Organizations recognize the value of observability, but only 10% of them are actually practicing full observability of their applications and infrastructure. This is among the key findings from the recently completed Logz.io 2024 Observability Pulse Survey and Report ...
Businesses must adopt a comprehensive Internet Performance Monitoring (IPM) strategy, says Enterprise Management Associates (EMA), a leading IT analyst research firm. This strategy is crucial to bridge the significant observability gap within today's complex IT infrastructures. The recommendation is particularly timely, given that 99% of enterprises are expanding their use of the Internet as a primary connectivity conduit while facing challenges due to the inefficiency of multiple, disjointed monitoring tools, according to Modern Enterprises Must Boost Observability with Internet Performance Monitoring, a new report from EMA and Catchpoint ...
