When the move to the cloud pays off for IT service providers

Are you still unsure whether you want to move your IT environment and your customers' infrastructures to the cloud? Xelon CEO and Swiss cloud pioneer Michael Dudli shows when a cloud migration makes sense for IT service providers.

The cloud is here to stay: In numerous surveys, IT decision-makers and opinion leaders from the ICT environment named the cloud as the undisputed leader among technology trends. "No matter what industry you are in (government, start-ups, agriculture, healthcare, banking), plan to migrate to the cloud, as the entire world is moving to the cloud sooner rather than later," predicts Medium's Towards Data Sciencein a summary of 2021 software trends.

Cloud services offer IT service providers numerous advantages

Many Swiss IT resellers have also included cloud services in their portfolio and work together with a cloud provider for this purpose. An external partner provides highly available, stable and scalable cloud services. An IT service provider can expand its portfolio quickly and easily with cloud services without having to make large investments. The resale of cloud services ensures recurring revenues because the services are usually purchased on a monthly basis. The key benefits of a cloud-based infrastructure for IT service providers include cost efficiency, stability, time savings and scalability.

Of course, as a cloud service provider, we are convinced that cloud migration makes sense for many companies. Nevertheless, there are also cases where we say that it really wouldn't make sense to migrate the infrastructure to a cloud environment.

Are you planning to renew your IT infrastructure and are still unsure whether you should move your IT environment to the cloud? Take the test with our e-book "Das kleine Cloudeinmaleins für IT-Dienstleister" and find out whether a cloud-based infrastructure makes sense for you. You can download the e-book here.

Cloud yes or no: These points help in the decision-making process

According to Xelon CEO Michael Dudli, IT service providers should consider four points to get a clear idea of whether a cloud solution is the right move or not.

1. Load peaks: Are there load peaks? "For very many classic end customers, this is not a particularly relevant issue, because they don't need twice as many resources on Monday afternoon as on Tuesday morning, because demand and growth are very stable. Covering peak loads is a key issue, especially for larger companies or software companies," Michael explains.
2. Team: The local operation of IT infrastructure requires power in the form of hours worked. According to a report by the Swiss ICT and Internet industry association (SWICO), all segments of the ICT industry in Switzerland say they have a hard time recruiting specialists. Is the recruitment of IT specialists a challenge for you? Only if no, the IT infrastructure should be self-managed in the medium term.
3. Know-how: Point 3 is related to recruitment and concerns the question: Do we even have the know-how to operate a cloud infrastructure or hardware infrastructure in our own data centre? Normally, you operate two data centres, because the infrastructure has to be highly available and fail-safe. Network issues come into play, such as multihoming. This means that data centre 2 is accessible when data centre 1 with the same IP is away. "If the corresponding know-how is available and can also be covered accordingly 24/7 and with holiday absences, you can operate the infrastructure yourself. If not, then over a long period of time it is probably very difficult to keep it running," says Michael. "We have a lot of clients who first tried running their IT infrastructure on-site (on-premise). That might have gone well for a year or two. But then they realised it was way too much effort and decided to migrate to the cloud," reports the Xelon CEO.

By sourcing cloud services, there is no need to build their own hardware and the time-consuming and costly recruitment of infrastructure experts is eliminated, allowing resellers to invest more time and energy in finding talent in other areas.

• Capital: When it comes to investing in IT infrastructure, the question is: do we have the capital to invest in hardware - yes or no? This is an important consideration when deciding whether to run an on-premise infrastructure or source services from a proven cloud infrastructure. Cloud storage is often billed monthly and is therefore the best option for companies that cannot or do not want to make huge upfront payments.

Hyperscaler packages are often not suitable for Swiss SMEs

A majority of IT resellers in Switzerland have recognised the opportunities of cloud service reselling and are aware of the importance of the new strategy in servicing SMEs and growing companies. However, resellers often lack the financial or human resources to set up their own cloud infrastructure or professional cloud services. The solution is to work with an external IT infrastructure provider. This provides end customers with a functional IT environment for their daily work. Cloud service integrators who know that their infrastructure is in good hands can concentrate more on their core business: customer care and the acquisition of new customers.

How do IT service providers who want to migrate their IT infrastructure to the cloud find the right cloud services provider? Big names like Microsoft Azure or Amazon Web Services often offer attractive pricing models. However, these predefined packages of hyperscalers rarely meet all the requirements of growing SMEs and are therefore not the right cloud partner for Swiss IT service providers and system integrators, whose target group usually consists mostly of small or medium-sized companies. The external cloud partner should know the Swiss SME landscape so that suitable cloud concepts can be developed for the end customers in cooperation with the IT service provider. Only in this way are IT service providers able to offer customised IT environments for companies of all sizes.

Download our e-book "The little cloud 101 for IT service providers" now. and get a checklist for choosing the right IT infrastructure provider.

When outsourcing the IT infrastructure, security has top priority

The company location also plays an important role in choosing the right IaaS provider. In times of data leaks and hacker attacks, most companies and their end customers probably want to know where their data is stored. The best-known hyperscalers have their headquarters in the USA, where access to company data is practised without judicial control by means of the Patriot Act. In Switzerland, on the other hand, this is not allowed.

By the way: Did you know that your own private cloud is not always more expensive than the prefabricated packages from hyperscalers? The high security standards and customised setup of a private cloud often seem more expensive at first glance than the public cloud offerings from Amazon, Google and Microsoft. However, research by Tech Target in 2020 shows that the horrendous costs of private clouds are largely a myth and that more than half of all SMEs do not ultimately save money with a public cloud from a large provider.

In the e-book "Das kleine Cloud-Einmaleins für IT-Dienstleister" (The little cloud 101 for IT service providers) we have compiled further resources for IT service providers who want to bring their IT infrastructure into the cloud. Download now!