Web Hosts and Cloud Providers: Meet Your New Competition

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The term break-fix is not in the hosting sector lexicon. I first ran across the term in the title of an upcoming Ingram Micro Cloud Summit seminar, How to Transition Your Break-Fix Business to the Cloud. The “break-fix” business refers to your traditional neighborhood IT company. At the same time, IT’s transition to the cloud represents your greatest opportunity and greatest competitive threat.

The break-fix business is fixated on the fact that cloud services can eviscerate IT firms’ traditional business model. IT firms are built upon helping clients build and then fix the infrastructure. Cloud products are a direct assault on their products and  services. It only takes one capital letter and the phrase ‘as as service” to transform the words platform, infrastructure, communications, hardware, security, desktop or software into a business loss for most IT firms.

The terms VARs, MSPs and IT firms are often lumped together without any rhyme or reason, but hosting and cloud firms are included. Don’t feel lonely, there are 80,000 North American firms of various size that fit that description. And while those “other” IT firms seek to provide your services it opens up opportunities for today’s medium-sized player to expand its marketing channel.

Only the largest IT firms will actually become MSPs, as in owning the infrastructure, and provide a broad range of services. But when they do they will be big. Take the largest IT firm in the world, Ingram Micro. Some 4,000 VARS already use the Ingram Micro Cloud. The latest figures, now over a year old, indicate that its largest customers already gross over $10 million a year. The firm also has 200 support engineers that help VARs and MSPs with pre-sales support.

Your typical local IT firm will migrate to these super houses. Firms like Ingram Micro and Dell can white-label services to the IT firm which will continue to provide the local sales, service and occasional fit-it.

My question for my readers is why not you?

However, getting a bit philosophical, last month at Parallels Summit Serguei Beloussov confirmed my point by announcing with religious fervor: “Everything is IT, and IT is everything” and “Everything IT is cloud.”

Parallels is a Gold sponsor at the Ingram Micro Summit 2014.

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