The 20 is helping managed service providers all across North America solve the puzzle of growth. But what’s the story behind The 20 — where did it come from, and where’s it going?
The 20, like so many things, started out as an idea. It didn’t come to me all at once. It came in pieces, coalescing over time into a vision I just knew I had to make a reality.
But before we get into all of that, a little bit about me and my history in the IT space…
Two Decades of Struggle
I’ve always liked trying things. I learned at a very early age that if you want something, and it’s worth the effort, you go for it. You don’t hem and haw. You don’t let fear get in the way. You get moving.
In the early 90s, I saw an opportunity to make some real money in IT — the industry was clearly on the rise, and I wanted in on the action. So, I bought an IT company in 1992 and geared up to watch it take off.
That first year, things didn’t go as well as I’d been expecting. But I didn’t lose hope. I made adjustments — tweaking what needed tweaking, changing what needed changing — and geared up for a big year two.
But year two wasn’t much better. Growth remained slow. I wasn’t getting anywhere near my goal of breaking $1 million in annual revenue. I’ll be honest — it was a tough time!
Our service wasn’t the problem. When we did get a client, I knew we’d be able to provide them with top-notch service. The problem was getting that client in the first place. The problem was getting that phone to ring.
But I’m stubborn, and I wasn’t going to throw in the towel after a couple of hard years. In fact, I kept at it for eighteen years.
That’s right, I struggled to grow my company for almost two decades. And I’m not ashamed to admit it now — the reason I couldn’t crack $1 million for eighteen years wasn’t bad luck. It was ignorance. I knew IT, and I knew business. But I hadn’t consolidated my knowledge into a single framework for growing my IT business.
But in year eighteen, things changed. Instead of banging my head against the same brick wall, I discovered — well, “fell upon” might be closer to the truth — a better way of doing things. Because I was in the right place at the right time connecting with the right people, I was lucky enough to experience a radical shift in my perspective on how to grow a successful IT company.
The “better way of doing things” I came to embrace is now The 20 — a company that gives managed service providers (MSPs) the tools, knowledge and resources to grow faster and scale more easily.
The 20 represents my desire to help business owners skip the ‘decades of struggle’ I had to endure, and get straight to the fun part: growing like crazy. Don’t get me wrong, I think there’s a lot to learn from struggle, but I also think that when there’s a faster, easier way to get from point A to point B, you take it! Besides, I’ve spent my life in IT, and it’s my privilege to give back to the industry that’s given me so much. I’ve made my money, and now I’m having a blast helping others make theirs.
That’s enough about me. Let’s talk about what The 20 actually is, and how it’s changing what’s possible for small and mid-sized MSPs.
Strength in Numbers
I mentioned that The 20 started as an idea — a simple “what if” that sparked my curiosity and relit the fire in my belly:
What if we joined forces?
The “we” here refers to separate MSPs, all working on our own separate islands, struggling to grow. After eighteen years of struggle, I stopped asking how I could grow my IT company, and started asking how we could grow our IT companies. This simple shift in perspective had profound consequences and led to the development of The 20’s revolutionary business model.
So, one way to answer the question “What is The 20?” is in terms of who’s in The 20:
The 20 is a group of MSPs who work together, sharing knowledge and resources, along with a US-based 24/7/365 Support Desk and National Footprint, to outsmart, outpace, and outGROW the competition.
A lot of people hear this and assume, given our company’s name, that there are twenty of us — that The 20 consists of twenty MSP members. So let me clear up the confusion…
The 20 has a lot more than twenty members; we’re currently at 180+ members, and we expect that number to hit 500 by 2025.
Bottom line — there’s plenty of room here at The 20! If there’s a ‘tipping point’ where adding new members is no longer conducive to our group’s success, we haven’t even begun to approach it. As The 20 grows, so too do its individual MSP members. The bigger we are, the bigger each one of us can be.
Why, then, are we called The 20, if not for the number of members in our group?
Our name comes from the Pareto principle, also known as the 80/20 rule. It states that 80% of effects come from 20% of the causes. In business terms, 20% of the players in a given industry — the “vital few” — get the lion’s share, while everyone else fights over the scraps. “The 20” refers to our commitment to helping MSPs join the “vital few” — i.e., become elite MSPs that dominate the market.
But how does it actually work? How does being a part of The 20 help an MSP become “elite”?
3 Challenges MSPs Must Overcome
We defined The 20 in terms of who’s in it, but we can also define it in terms of what’s in it — the “secret sauce” we’ve distilled from the expertise of hundreds of IT experts and business owners.
Our MSP members are awesome, and it’s no coincidence — we choose to work with business owners with great attitudes and a desire to succeed. That said, you could, in theory, replace our MSP members with other MSPs, and those MSPs would find success the same way our current members have. Why’s that?
Because our model WORKS! Or, as we like to say, this sh*t is awesome! The reason The 20’s approach to MSP growth is so effective is that it helps MSPs solve their 3 biggest pain points:
Lead Gen
Sales
Scale
Let’s talk about why each of these is so crucial to growing a successful MSP.
Lead Gen
This is where it all starts — where all growth originates: generating leads for your MSP. If your phone (or medium of choice) isn’t ringing, you’re not going to have much success. That’s as certain as death and taxes. But how do you get leads?
Most MSPs rely on word of mouth. While there’s nothing wrong with word of mouth per se, as a primary means for lead generation, it’s not going to cut it. It’s too inconsistent, too difficult to control, and too reliant on your network’s reach. If you want the type of steady growth that will transform your growing IT company into a thriving enterprise, you need to adopt a systematic and scalable approach to lead gen. There’s just no way around it.
This is where The 20 comes in. We take our MSP members’ marketing to the next level using the latest and best strategies for lead gen. Yes, this means we use automation, but automation without a proven system is just a buzzword. Our mature marketing program is committed to not only producing leads for our MSP members, but cultivating those leads, and eventually, guiding them to the finish line.
Is it possible for an MSP owner to figure out all of this stuff on their own? Sure, it’s possible — but why not makes things easier on yourself? You’re busy running a business. Do you really have time to research and test different approaches to marketing and lead gen? By plugging into The 20’s elite marketing, your MSP can start seeing real and measurable results right away.
Sales
Lead gen without robust sales is like a great recipe without a cook: useless! If you want to grow your MSP, you need a proven sales process that takes leads and converts them into clients. The key word here is process: your sales efforts need to be systematic and repeatable (i.e., scalable) if you want to see real growth, because in today’s ultra-competitive IT industry, nothing less will suffice.
Remember, B2B sales, especially with technical services like those provided by an MSP, are much more complex than B2C sales. It can take anywhere from 12 to 16 touches just to get an appointment! At The 20, we help our MSP members take their sales to the next level using automation solutions to drive sales cadence. Plain English translation: We use automation to ensure that you interact with prospects frequently enough — and in the right way — to convert them into clients.
Scale
The final piece of the puzzle, scale is absolutely essential to MSP growth. Scalability refers to the ability to adjust operations — technical processes, sales, marketing, etc. — to meet greater or lesser demand. The more scalable your MSP’s operations are, the more quickly and easily you can adapt your services to take on more/larger or fewer/smaller clients.
Traditionally, your MSP can only scale up/down by following the ‘Field of Dreams’ method: If you build it, they will come. This approach involves building up your operational capacities by doing things like hiring technicians, and then hoping you’ll get enough clients to
vindicate the front end investment. But if you don’t get those clients, you’ll have — to stick with our baseball metaphor — an empty stadium. Luckily, there’s a better way…
The 20 allows MSPs to scale up and down much more easily; we give our MSP members access to resources like a US-based 24/7/365 Support Desk, which can be utilized on a consumption basis.
So, let’s say a potential client approaches your MSP, but they have way more endpoints than you’re used to dealing with, as well as several locations on the other side of the country. If you’re like most MSPs, you have to tell them, “Sorry, we can’t help you. We don’t have enough people or locations.”
But if you’re a part of The 20, you can tell them, “We got you covered”; your MSP can instantly scale up its operations by reaching into The 20 and pulling the resources you need to serve the larger client. Other MSPs in The 20 can ‘come to the rescue,’ and since MSPs in The 20 all share a single service delivery model, you don’t need to tell your ‘extended MSP family’ how you do business to bring them up to speed. That’s the beauty of The 20 model, and the key to our members’ unrivalled growth.
Future-Proof Your MSP with The 20’s Blueprint
It’s an exciting time to be an MSP. The market is expanding rapidly (one reputable study predicts that it will grow from $242.9 billion in 2021 to $354.8 billion by 2026). However, it’s also getting more competitive, and small and mid-sized MSPs will be left fighting over scraps unless they can figure out a way to compete with ‘the big boys’ (check out my Forbes article for a more technical breakdown of what’s happening in the MSP space).
The 20 can help your MSP be ‘bigger than it is,’ so that you can remain competitive in an increasingly crowded industry. When you become a member of The 20, you don’t give up your business, you just augment it with our powerful platform for growth and the collective expertise of our community of world-class MSPs.
Life’s too short to wait on greatness. So don’t be like me and wait until eighteen years have gone by to start working smarter. The 20’s blueprint doesn’t make sense for every MSP, but if it makes sense for yours, get in touch with us today and start your growth journey now.
Meet Hunter Buchanan, Support Desk Technician!
Hunter Buchanan quickly became a tremendous asset to the entire team at The 20. Read below to find out more about Hunter.
What do you do here at The 20?
I close as many tickets as possible.
Describe The 20 in three words…
Learning, Collaboration, and Improvement.
As a kid, what did you want to be when you grew up?
A professional hockey player.
What’s the most challenging thing about your job?
The most challenging thing about my job is having to learn all the details of the programs used.
What do you consider your greatest achievement?
I consider winning the state championship for high school hockey as my greatest achievement.
What do you think is the most important quality necessary for success?
The ability to learn, it’s impossible to make yourself better without being able to accept criticism and learn from your mistakes.
What do you like most about The 20?
The best part about working at The 20 is the people that I work with.
What do you like to do in your spare time? / What are your hobbies?
The Lerepco IT Group is an IT Service Provider located in Moorestown, NJ – part of the metro Philadelphia/Southern New Jersey area. My partner and I, each having about 30 years of IT experience, incorporated in December of 2013 with the idea of starting and growing our own IT practice.
How long have you been a member of The 20?
We’ve been a member of The 20 last spring.
Why did your MSP originally look to partner with The 20?
We were looking to have easy access to resources and expertise that would otherwise be expensive, inaccessible, or time-consuming to put in place. The idea was for The 20 to provide us the infrastructure to easily standardize our offering and scale our support team so that we could focus on growing the business.
Tell us about the biggest change in your business since joining The 20.
I am more focused on Marketing than ever before – especially social media.
What do you like most about being a member of The 20?
I appreciate that we benefit from The 20’s existing relationships with other MSPs and vendors. I like that we have an opportunity to talk to other providers that face similar technical and or sales challenges. I have already built new partnerships with other groups such as Netlogic and Axcient because of my relationship with The 20.
What do you think is the most important quality necessary for success?
As an IT person, I always thought that you had to provide the highest quality of skills and customer service to be successful. As a business owner, I quickly learned that if you don’t have a strong sales and marketing plan, you won’t have any clients to provide those services to! So yes, providing great service is critical to maintaining your client base, but I’ve learned that it’s imperative to invest time and money in Sales, Marketing, and especially a social media presence.
What are your biggest business challenges?
We are based in South Jersey where there is a strong and competitive presence with existing talented MSPs. So, for us being good technically is not good enough! Raising our Sales and Marketing plan to compete with those other MSPs in 2022 is our biggest challenge.
What are your areas of focus for 2022?
Sales! Sales! Sales! Growth! Growth! Growth!
What advice would you share with an MSP looking to scale their business?
Partner with someone like The 20 where you can get an economy of scale instantly – don’t try to build an entire IT team yourself. This will allow you to focus on Sales and Marketing – and growing the client base of your business.
Favorite blogs/podcasts
I don’t know that I follow any existing series of blogs or podcasts. I do read/watch/listen to a lot of different technical blogs/podcasts for educational purposes rather than entertainment purposes.
What brought you to The 20 & what keeps you here?
The technical scalability and ability to “borrow” ideas, marketing and techniques that work with other MSP’s.
What is the biggest problem The 20 solves for you?
Technical Resources and Scalability
Interested in becoming a member like The Lerepco IT Group? Click here for more information!
Taking Your Clients to the Cloud
A Perspective for MSPs
This article isn’t about why your MSP should be moving services to the cloud. It’s not about the value of cloud services to the typical small to mid-sized business. There are a million articles on those topics — including a few on this blog! Besides, if you’re in the managed services industry, you already know that the cloud is where it’s at — and where it’s going to be at for the next decade unless something drastic happens or an even better paradigm emerges.
As for your clients — the SMBs you serve — they’re likely warming up quickly to the cloud, and the many benefits it can bring their growing businesses. A survey published by Datto found that 93% of MSPs expect their clients to have at least half of their workloads in the cloud by 2024. The secret’s out — the cloud works, and it’s here to stay.
So, if your clients aren’t moving key IT functions to the cloud, it doesn’t matter what their reason is — maybe they’re just being complacent, or maybe they still don’t trust the cloud —it’s your responsibility as their MSP to get them on board. MSPs exist because the break/fix model is no longer enough; an organization chooses to work with an MSP in order to streamline their entire IT infrastructure in a way that allows for greater operational efficiency and overall profitability. You can’t help clients achieve this while also indulging their nephophobia (yes, that means a ‘fear of clouds’). Ten years ago, maybe you could, but not now. Not in 2022.
What is this article about, then, if not why your MSP and its clients should be pro-cloud?
It’s about how to get clients on board with cloud computing, and how to help clients who already are on board get the most out of their adoption of cloud-based services.
Conquering Clients’ Nephophobia
Assume Nothing
Unfortunately, many SMB owners are still fundamentally wary about the cloud. The very idea of cloud computing makes them uneasy — or, rather, their idea of cloud computing. It’s crucial to keep in mind, when broaching the topic of adopting cloud-based offerings with your clients, that many SMB owners still think of the cloud as … well, a literal cloud. In our first blog post in this series on cloud computing, we brought up a favorite joke among IT people: There is no cloud. It’s just someone else’s computer. The reason this joke is popular is because it contains, like any good joke, a strong element of truth. People often do believe — even if on an unconscious level — that the cloud is somehow less physically real than traditional computing technology.
Bottom line — don’t assume your clients know what the cloud even is, let alone how it can help their businesses run more smoothly. Before delving into the different cloud service models (IaaS vs PaaS vs SaaS) with a client, or explaining the many business benefits of cloud computing (greater scalability, agility, flexibility, etc.), make sure your client understands the basics: what the cloud is and how it works. Use analogies to get away from IT jargon, while bearing in mind that these analogies are often imperfect. If you patiently break down cloud computing into familiar concepts at the outset, it will save you lots of time and effort down the road when you need to persuade your clients to evolve their cloud infrastructure even more.
Keep It Concrete
Another important thing to keep in mind when discussing the cloud with clients is the importance of keeping the conversation concrete. When you are absolutely certain that a client understands what the cloud is, and you’ve started discussing the business benefits of cloud computing, don’t just harp on about greater ‘scalability’ and ‘business agility.’ Give the buzzwords a rest, and instead, describe concrete scenarios in which cloud-based services would be of help. This is where being intimately familiar with a client’s business is powerful. You know specific struggles your clients have had, crises they’ve endured. Don’t be afraid to bring those up. “Remember the time that server crashed …” Make them feel the need for cloud computing in their gut. Make it feel REAL.
Don’t Sugarcoat
Finally, while you don’t want to engage in fear-mongering, lean into making your clients feel the urgency of the need to move business to the cloud. Bring up a few statistics that show just how popular cloud-services are becoming. Tell them the SMBs that hold out on the cloud for a few more years will simply be too far behind to catch up when they finally decide to get with the program and adopt cloud-computing for major IT functions. In other words, tell them the truth.
Helping Clients Get to Cloud Nine
Let’s say you’ve got a client who has embraced the importance of cloud computing, and who has a basic grasp of the ways in which cloud-based services can help usher their business into the future. What now? Is your job done?
Not at all. In fact, that’s just the beginning. A client who’s eager to adopt cloud-based services — hopefully most if not all of your clients fit this bill — stands to get the most out of their migration if they conceptualize it in the right way. This is where you come in, as their MSP. By framing the value and role of cloud-based services in the right way for your SMB clients, you can help them commit more fully and enthusiastically to their cloud transformation. So, how should your MSP go about framing things?
First, it’s essential that you clarify what your role is as their MSP. Convey to clients — through marketing, through direct interactions, and most importantly, through your actions — that your job is to guide them in a continuous and ongoing digital transformation. In the context of orchestrating their move to the cloud, this means getting them to see that the migration isn’t a ‘one-and-done’ kind of deal. It’s not like once an SMB is ‘in the cloud,’ it can rest on its laurels. On the contrary, an SMB in today’s fast-paced digital world has to maintain and continually improve upon its cloud infrastructure, and remain on the lookout for the best cloud-based offerings on the market. This is of course a tall order, which is why
more and more SMBs and turning to MSPs for help with their cloud strategy. But the first step in getting your clients to turn to you for help is getting them to see the need for help.
Digital transformation expert, Bernard Marr, predicts that one of the biggest cloud trends in 2022 will be a shift in focus from “the deployment of cloud tools and platforms in order to improve a specific function … towards more holistic strategies centered on enterprise-wide cloud migration” (read Marr’s Full Forbes article here). This strikes us as spot on, which is why we’re urging MSPs to take initiative in explaining to their clients that when it comes to a business living in the cloud, there are levels. What counts as being a cloud-oriented business now is different from what will count in a year, two years … five years.
In fact, the term “digital transformation” might be a misnomer. A better term is “digital evolution,” as it better captures the ongoing nature of digitalization. If you can get your clients to adopt this perspective, you won’t have to twist their arm every time you want to introduce a new cloud-based service into their IT environment — they’ll be right there with you, eager to take the next step in their cloud journey.
Facilitate Your Clients’ Cloud Migrations with The 20’s Platform
The rise of the cloud presents your MSP with a golden opportunity. Moving your clients’ IT functions to the cloud was the first step. Now, in 2022, MSPs face a new challenge: perfecting and refining their clients’ cloud strategies to accommodate remote/hybrid work, repel cyberattacks, and integrate different (and currently somewhat disparate) cloud-based solutions into a cohesive whole. If you can do all that, you’ll add tremendous value to your clients’ businesses and earn even more of their trust.
It can be hard to ensure your clients get the most out of their digital transformation and cloud migrations. Are you using the best tools for the job? At The 20, we have worked with multiple vendors to create a scalable solution for MSPs using tools such as Nerdio, which makes it easy to set up Azure for SMBs and beyond, and Crayon, which enables organizations to optimize their cloud environments and get the most bang for their buck.
Learn more about The 20 — who we are and how we’ve helped hundreds of MSPs get to the top of the IT industry.
The Pareto Principle, or the 80/20 rule, states that 20% of any given causes lead to 80% of any following effects (give or take). What this means is that 20% of your effort is going to yield 80% of your reward, 20% of your sales will yield 80% of your revenue and so on. While every marketing or sales program mentions the Pareto Principle, very few describe how it actually applies to real life. Some materials will even tout it as a law: All you have to do is hit 20%, and you get a B in sales.
This isn’t a given, though. It’s going to work out like this over the long run, but certain niches in certain markets won’t follow this at certain scales, and there are factors that complicate it. The problem is that while 20% might get you 80%, the other 80% only gets you 20%. So, the question becomes exactly how do you get the right 20%?
This is the major implication of the Pareto Principle. While 20% gets you 80%, that 20% is only one-fifth of your prospective market. How can you apply this principle to actually make the most of it while reducing your risk? Do you bet on 20%, or how can you split the odds? How can the Pareto Principle be extended and shaped into other applicable rules?
Implications Of The Pareto Principle
While 20% gets you 80%, the other 80% gets you only 20%. Any campaign or endeavor is going to have to work out, whether it’s hitting the right 20% or not. If you aren’t targeting the right segment(s) of the market, you run the risk of 4:1 odds for hitting the jackpot. It’s not a zero-sum game, but statistically, you’re looking at an average of 6.4% for your 20% effort if your distribution and targeting are random (4% of the 80% jackpot and 16% of the 20% remainder).
Obviously, no one is hitting their targets at random. But many leaders fail to think through the implications of their decisions. Are you basing your decisions on actual data throughout the process, or are you making assumptions? Is your data solid, and are the metrics derived from it right?
The other implication of the Pareto Principle is that the rule tends to hold true on multiple levels. If you put forth 20% of the effort on a process, you can get up to 80% efficiency. As you chain processes, you’ll get diminishing returns as less effort is put in at any given step. Sometimes this means that you get more than expected with the right application; other times, people expect that the 20% they put in gets them 80% even though they skipped important steps.
Applying The Pareto Principle
The whole principle breaks down when you cut the wrong parts out. Relying on just the Pareto Principle to carry you is going to be a disaster, so how exactly do you actually apply it?
You obviously have to know where your 20% of effort is best applied. The other side to this is how much can you bring in bulk where you don’t know what matters? If cutting something reduces the work by a single percent, and is almost a rounding error in cost, is it actually worth cutting or not? There isn’t going to be an objectively right or wrong answer; it’s going to depend on what’s at play. You have to know what works and what doesn’t.
Since this is going to also stack, you need to know what the implications mean for a given task. If a task is central to your work but isn’t your specialty, should you try to rely on the Pareto Principle? It might be worth the gamble, but you’re probably not coming out ahead of the house. The more that you do, which depends on a given process, the closer you want to get to 100% efficiency. The same applies to stages you’re unsure of.
Extending The Pareto Principle
While the Pareto Principle is often parroted over and over, the fact that it is also referred to as the Pareto Distribution is largely ignored. The (more) recently popular “1-50 Rule” derives from this, stating that 1% of the tasks or effort can get 50% of the results. Mathematically, it makes sense. Basically, you run the Pareto Principle three times, and you find that with the right targeting, roughly 1% of the effort (20% of 20% of 20%, which is 0.8%) will get you about 50% of the results (80% of 80% of 80%, which is 51.2%).
Each mistake compounds. Hitting the wrong 20% means that you take your efficiency down a massive amount. One single miss, and your peak efficiency at 0.8% effort goes down to 3.2% of the results. You get in more than you put in, but you can’t rely on it, either, unless you know where to properly apply your shortcuts.
The Pareto Principle is extremely powerful when applied correctly, but it can quickly become a dangerous crutch. Is the principle working for you, or are you trying to work for it? Like anything, if you let yourself Dunning-Kruger the application, you’ll find that the essential 20% is always out of reach. The principle can help you or it can hurt you, but the only way to know which way it will go is to either rely on luck or science. What odds are you betting on?
2021 in Review
2021 was an amazing year here at The 20! We are proud of our accomplishments and the company culture we have established. Within the last twelve months, we have hit many milestones.
Here are some of the highlights from the past year…
Closed nearly over 45,000 tickets!
Increased our footprint in 24 markets
74 new employees hired
Featured in over 50 articles and publications
Received 10+ awards
Published 80 blog posts
Established 4 new vendor partnerships
Held 50+ webinars
Produced 300+ pieces of marketing collateral for MSP
Attended 52 events (Check out our 2022 event calendar here)
Not to mention, we had 300+ attendees at our VISION’21 Conference! Make sure you save the date for VISION 2022, to be held October 4th through October 7th.
Check out our 2021 in Review recap video
Meet Tony Holmes, IT Support Desk Specialist!
Tony Holmes quickly became a tremendous asset to the entire team at The 20. Read below to find out more about Tony.
What do you do here at The 20?
Technical support for various MSPs.
Describe The 20 in three words…
Welcoming, Innovative, Fast Paced
As a kid, what did you want to be when you grew up?
As a kid, my occupation aspirations changed from a Doctor to a lawyer.
What’s the most challenging thing about your job?
The most challenging thing about my job is keeping up with the various technologies and procedures dealing with the different msps we support.
What do you consider your greatest achievement?
I considered owning my own business for over ten years to be my greatest achievement, but this pandemic made me realize my greatest achievement is yet to come!
What do you think is the most important quality necessary for success?
Persistence.
What do you like most about The 20?
The way everyone here is willing to share their level of expertise with one another.
What do you like to do in your spare time? / What are your hobbies?
I enjoy a good cigar and listening to music in my spare time. My other hobbies are sound exploration through modular synthesis and music production.
IaaS, PaaS and SaaS: Different Clouds for Different Crowds
Picking the right technology solutions for your organization can be daunting, especially if you’re going it alone or if you’re just not a ‘tech person.’ Selecting the right cloud services is no exception. But you don’t have to be overwhelmed by the cloud.
First off, it can be tremendously helpful to familiarize yourself with what ‘the cloud’ even refers to; when you have a basic understanding of what the cloud is (a way of giving people and organizations IT services and resources that utilizes the internet) and what it’s not (it’s not a place, it’s not in the sky, its performance does not tend to fluctuate with the weather), the idea of moving to the cloud becomes much less scary. So, if you haven’t already, check out the first blog in this series for a straightforward overview of cloud computing, and the second to learn about the top 3 benefits of moving your business to the cloud.
In this piece, we’ll be looking at three types of public cloud service models that individuals and businesses can use:
Infrastructure-as-a-Service (IaaS)
Platform-as-a-Service (PaaS)
Software-as-a-Service (SaaS)
If you’re a business owner thinking about making more use of cloud computing, what you want to know is: Which service model is right for my organization?
This article will help you get a handle on IaaS, PaaS and SaaS — what they are, how they differ, and what benefits you can expect from each. But remember, when it comes to receiving guidance on large-scale IT projects, there’s no substitute for having a strong IT team behind you, either in-house or outsourced. A managed service provider (MSP) can be especially helpful for business owners who are looking to make significant changes to their IT environment.
IaaS, PaaS and SaaS: Buffet or Menu Items?
If you think IaaS, PaaS and SaaS present three mutually exclusive options, think again. Instead of asking which one is right for your business, you should be asking: Which combination of cloud service models best suits my business? There’s no rule saying you have to use only one of the three. Much like a buffet, you could — if it makes good business sense — have a little of each. Indeed, a lot of businesses, especially larger enterprises, use more than one, and oftentimes some combination of all three.
Less Responsibility = Less Control
IaaS, PaaS and SaaS — that’s the order in which you generally see the three cloud service models listed, and there’s a reason for that. IaaS is the most basic type of cloud service model, followed by PaaS, and finally, SaaS. In this context, “basic” is defined in terms of how much control over your IT environment you’re ceding to your cloud provider. So, with IaaS, you’re giving up the least amount of control, and with SaaS, you’re giving up the most. More specifically, with IaaS, you’re moving the fewest number of IT functionalities to the cloud, and with SaaS, you’re moving the most.
Check out this chart depicting exactly which aspects of your IT environment you’re handing over to your cloud provider under IaaS, PaaS and SaaS. As you can see, with all three types of service models, you have fewer IT responsibilities compared to a fully on-premises set up.
SaaS might seem like an attractive choice if your preference is to not have to worry about IT. However, it’s important to keep in mind that less responsibility also means less control. The more of your IT environment you choose to host on the cloud, the less control you have over it. SaaS, for instance, leaves very little room for customization, as SaaS products pretty much come “as is.” In some industries — such as financial services — regulations require certain levels of control over data for security purposes, and some cloud service models might not allow you to achieve those levels. Bottom line: know your industry.
IaaS vs PaaS vs SaaS: A Closer Look
IaaS
Now that we’ve taken a look at the three types of cloud service models from a ‘bird’s-eye view,’ let’s zoom in and look at the specific features of each. This will help you begin to get a clearer idea of which one(s) best serves your business’s needs.
We’ll start with IaaS. IaaS, as its name suggests, delivers IT infrastructure on an on-demand basis. This infrastructure typically includes servers, networking and storage. IaaS can be a good option for smaller businesses that don’t have the time or money to establish their own data center, and need infrastructure quickly and cheaply. It can also make sense for companies that want to leverage the general benefits of the cloud (scalability, cost-effectiveness, etc.), but still require ample control over their applications and IT infrastructure.
PaaS
PaaS gives your company the same cloud-based services as IaaS, plus a few more (namely, operating systems, middleware and runtime). PaaS is a popular cloud service model for software developers, as it enables them to build applications in a quick and scalable fashion using a cloud-hosted platform. Developers who use PaaS don’t have to worry about maintaining and managing operating systems or software updates, as those are handled by the cloud provider. As a result, they can put all their energy and focus into creating and testing new apps.
of cloud service used by individuals and organizations, and it’s not surprising as it’s also the easiest to use. SaaS involves the delivery of applications over the internet to users. Chances are, your organization already utilizes SaaS (popular apps such as Gmail, Google Drive, HubSpot, and the apps in Microsoft 365 are all SaaS offerings). The primary appeal of SaaS is convenience; you’re getting a ready-to-use application, and all you need to use it are a web browser and an internet connection. This means no downloads or installations, as SaaS offerings are hosted entirely on remote servers.
The advantage of SaaS — that it requires very little from your organization in the way of IT management — is also the source of its main limitation; because SaaS products are hosted on the cloud, they don’t typically allow for much customization. However, if you don’t require a high degree of customization from your apps, SaaS can be a perfect solution. SaaS is also suitable for short-term projects and apps that aren’t used very often (e.g., tax software).
Concluding Remarks
If you’re looking into cloud services for your business, and the choice between IaaS, PaaS, and SaaS is making you anxious, take a deep breath and remind yourself …
The fact that you’re looking into matters more closely and researching the different types of cloud service models means that you’re miles ahead of the business owner who is avoiding the cloud altogether, whether out of sheer bias, fear, or simple complacency. The businesses that aren’t fully confident navigating the world of cloud services aren’t the ones that should be worried. It’s the businesses that aren’t even entering that world that need to be concerned, because they’re the ones who aren’t prepared for the digital future.
Besides, the three types of cloud service models all share the general benefits of cloud computing: increased business agility, greater scalability, cost-effectiveness, and robust BDR. So, a gradual migration to the cloud, involving some trial-and-error, is far superior to the strategy of ignoring cloud computing altogether and stubbornly doing everything on-premises.
This doesn’t mean you can choose any type of cloud service model and expect it to do wonders for your business. Adopting cloud-based computing is tied up with various challenges, such as maintaining your security posture, integrating cloud solutions with your on-premises infrastructure, and so forth. And so, migrating to the cloud should be done with care, deliberation, and the help of a trusted IT provider or in-house IT team. That’s the only way to make sure you maximize the benefits of cloud computing for your company.
That said, even if it takes you months — or years even — to find the right cloud-based solutions for your company, by deciding to take steps toward becoming a cloud-based business, you’re ensuring that your business is on the right track. That’s because cloud services have evolved to the point where it’s simply not sensible to opt out entirely. Staying away from the cloud isn’t being ‘down to earth’ so much as it is being a ‘stick in the mud.’
The Top 3 Benefits of Moving Your Business to the Cloud
They say “numbers don’t lie.” If that’s the case, then cloud computing is certainly the way of the future. According to a report put out by the IDC (International Data Corporation), public cloud spending will increase to nearly $500 billion by 2023. To put this figure in context, public cloud spending reached $229 billion in 2019. Another study performed by MarketsandMarkets™ projects that the global cloud market will more than double between 2020 and 2026, when it is expected to balloon to a whopping $832.1 billion.
Behind this pronounced growth is a simple fact: More and more individuals and organizations are migrating to the cloud. Again, the numbers speak for themselves. End-user spending on cloud services totaled $270 billion in 2020, and a forecast from Gartner has that figure increasing to $397.5 billion by 2022. Research from Flexera indicates that 94% of businesses already use the cloud in some capacity.
The trend is obvious: there is a mass migration the cloud services.
But is the hallowed cloud everything it’s cracked up to be, or just another pie in the sky? Why are businesses moving to the cloud in droves? Are they simply following the latest trend, or is cloud computing the real deal — something with concrete and measurable benefits for growing businesses?
In this article, we’re going to break down some key benefits of cloud computing. When you understand what cloud services can do for your business, it’s easier to enter the cloud market at your own pace and on your own terms.
Benefit #1: Cost-Effectiveness
The desire to spend less on IT is one of the main reasons why businesses are flocking to the cloud. There is research suggesting that lowering costs is the primary reason behind nearly half of all businesses’ moves to the cloud. But does cloud computing really help companies save money?
In short, yes. That doesn’t mean adopting any kind of cloud services will lower your costs just like that. Like most significant shifts in your technology strategy, the devil’s in the details. That’s why it’s crucial that you have IT experts whom you trust to help you navigate the transition from on-premises infrastructure to cloud-based architecture. Working with an IT provider such as a managed service provider (MSP) can be a great idea for a growing business that needs help with their overall IT strategy. Moving to the cloud isn’t a one-and-done kind of deal; it’s a process, and without someone to guide you, it’s easy to lose control of the transition and end up suffering losses as a result.
With that said, let’s look at a few ways in which cloud migrations typically help organizations lower their IT expenses.
Trading Capital Expenses for Variable Expenses
Cloud computing removes the need for on-premises IT infrastructure — not all of it, but a sizeable portion. When business owners move to the cloud, they can utilize vital IT resources, like storage and processing power, without having to purchase and maintain onsite hardware to host those resources.
This can be a huge source of savings, as servers aren’t cheap, requiring vast amounts of electricity not only to run, but keep cool. Overheating servers can be an utter catastrophe, as high enough temperatures can fry hardware beyond the point of salvageability.
Economies of Scale
When you receive IT resources through the cloud, the relative cost of those resources compared to their implementation on-premises tends to be lower. This is due to economies of scale. But what are those?
The short answer is that economies of scale are gains in efficiency that result from producing something on a larger scale. How does this relate to cloud computing? Well, the datacenters housing the servers that host the most popular cloud services (AWS, Azure, Google Cloud, etc.) are definitely “on a larger scale” than almost any on-premises set-up. In fact, they’re downright huge, each one containing tens of thousands of servers. The biggest ones use as much electricity in a day that a small town uses in an entire year, and the tech giants who run these colossal facilities spend top dollar on cutting-edge approaches to the delivery of cloud services.
In the ongoing battle over the cloud market, efficiency is the name of the game, and, for a small-to-medium sized business (SMB), keeping up with cloud providers like Amazon and Microsoft is becoming increasingly difficult. Just as a small farm will have trouble growing corn as cheaply as a big industrial farm, so too will an SMB have trouble spinning up IT resources as cheaply as a massive datacenter run by a multi-billion-dollar tech company.
And so, it’s like they say — if you can’t beat then, join them — which is exactly what thousands upon thousands of companies are doing: opting for cloud services in order to get IT resources at a cheaper rate.
Elastic Scalability
Cloud services are delivered on a pay-as-you-go basis, which means you pay more when you need more of a particular service, and less when you need less. This ties into the benefit of flexibility, which we will be discussing shorty, but it also means lower overall costs. You pay for what you need, instead of pouring money into IT infrastructure that you only need to use — or use to its full capacity — some of the time.
For some businesses, having a datacenter onsite is like paying a personal chef a full salary to prepare just a few meals a year. If you find that your organization is paying for more IT resources than it consumes, now is a good time to look into cloud-based services, as it could save you tons of money. With cloud computing, you pay ‘by-the-meal,’ to build on the previous analogy; when your business is hungry — i.e., when it needs more of a particular IT resource or tool — you pay for however much of that resource you wish to consume.
Fewer IT Staff
On-premises IT infrastructure needs to be taken care of, and that requires IT experts on your payroll. We mentioned the importance of keeping servers at the right temperature, but that’s only one of many tasks that your IT team will have to deal with if you keep everything on-premises. When you throw in the opportunity costs that arise when your IT staff is busy with looking after onsite servers — i.e., the price of them not doing other things to help your business — the price of on-premises infrastructure can quickly become unmanageable for your growing business.
Adopting cloud-based services allows you to employ fewer IT experts, and frees up any IT staff you do have to pursue projects that make better use of their time and talents. This means one thing for your business: savings.
Benefit #2: Speed and Flexibility
Cloud computing gives businesses more speed and flexibility. But what does that mean? An analogy can help here. Think about the way electricity works. When you need more electricity, you get it, and you don’t have to wait. You turn on your television, and voilà — you receive more electricity. And when you finish binging your favorite show and decide to finally turn your TV off, the electricity that was flowing subsides. Moreover, your electricity bill goes up and down with the amount of electricity you use.
Cloud computing works in very much the same way (although the analogy is far from perfect). Let’s say a game developer comes up with a popular app that quickly attracts thousands of users, then tens of thousands, then hundreds of thousands! If the hardware and software required to host the game are on-premises, the sudden explosion in users could be a big problem; simply put, the game developer might not have enough servers on-premises to accommodate its product ‘going viral,’ and acquiring and setting up the required number of servers quickly enough just might not be feasible or affordable.
But if the game is hosted on the cloud (i.e., on remote servers in a gigantic datacenter) the company can simply scale up the number of servers it needs to keep pace with demand. And if people get tired of the game, they can scale back down (i.e., rent fewer servers).
This is the speed and flexibility of cloud computing in action, and for a business that needs elastic scalability, it can be the difference between success and failure.
Benefit #3: Greater Productivity
The fact that cloud computing allows workers to access information quickly and from anywhere on the planet — all they need is a device with an internet connection — means businesses that use the cloud can serve their clients and customers much more rapidly and smoothly.
It also means that the rise of remote work and the need for cloud computing go hand in hand. Simply put, if a business expects remote work to be a continuing part of its operations — and many businesses are — pivoting to the cloud will be not only wise, but essential, as it will allow remote workers to do their jobs effectively and without falling afoul of compliance regulations.
Another way cloud-based services help businesses run more smoothly and productively is by providing robust backup disaster and recovery (BDR) solutions, along with an array of policies and technologies devoted to helping keep businesses’ data safe. Popular cloud providers like Amazon and Microsoft have data centers all over the world, and are able to keep your business’s data in multiple locations. So, if for whatever reason (natural disaster, cyberattack, etc.) your data gets wiped out at one of the datacenters in your public cloud provider’s vast network of facilities, you won’t lost that data altogether. This is a huge benefit, as downtime is far from cheap.
Moreover, it’s standard for cloud providers to guarantee certain levels of service in a service level agreement (SLA). Reviewing that document with a trusted IT expert — and even legal counsel — can help assuage any fears you have about the type of security that you’re getting from a cloud solution.
Despite a growing body of evidence that the cloud provides better security than on-premises IT infrastructure, there is still a widespread distrust of cloud services based on the belief that moving to the cloud means letting your information ‘float freely’ in a less-than-secure environment. This concern is not entirely unfounded. Security in the cloud is far from infallible, and migrating to the cloud doesn’t mean that your organization can simply forget about security. Keeping information secure has to be a joint effort, involving you, your employees, your cloud provider, and — if you have one — a trusted IT partner such as an MSP. But with the right cloud solution, your organization can actually experience more security, better BDR, and enhanced compliance.
Concluding Remarks
We began this article with a simple question: Why are so many people and businesses turning to cloud computing? It turns out the answer is simple …
Businesses are adopting cloud-based computing services because doing so brings a host of benefits! It isn’t the ‘allure’ or ‘mystique’ of the cloud that is attracting so many users; it’s the proven functionality of cloud services. Cloud computing is continuing to evolve, and the technology — like any — has room to grow. But businesses that wait around for the cloud to reach its full potential before adopting cloud-based services are likely to get left behind, whereas businesses that jump on cloud computing now — and do so thoughtfully and with a sound strategy — can boost their bottom line and achieve new levels of efficiency.
What is Cloud Computing?
You hear about ‘the cloud’ a lot these days. The IT term has worked its way into popular culture, and most people have some idea of what cloud computing involves. But what exactly is the cloud? Where is the cloud? There’s an undeniable mystique surrounding cloud computing, but it’s not the strange and elusive technology many take it to be.
In this article, we’re going to answer the question ‘What is cloud computing?’ in simple and straightforward terms. It will be the first in a series of four blog posts on cloud computing. The second will take on the topic of how cloud-based services can help businesses grow, the third will focus on the three different types of cloud service models (IaaS, SaaS and PaaS), while the fourth will be about the importance of cloud computing in the managed service provider (MSP) space.
There is No Cloud
Perhaps you’ve seen this bit of tech humor displayed on a t-shirt:
There is no cloud. It’s just someone else’s computer.
They say the best jokes are rooted in truth, and this one is no exception. The truth in question is at the heart of cloud computing — what it is and how it works. Here’s a succinct definition of cloud computing:
Cloud computing refers to the delivery of IT services over the internet on a pay-as-you-go basis.
But here’s the thing, the IT services and resources that are commonly provided over the cloud — servers, databases, storage, networking, software, and more — do not exist in the ether, floating free of any physical basis. Like any computing technology, cloud services live on computers, and more precisely, on servers.
So what makes cloud computing so special? The answer to this question brings us back to the above joke: When you move certain IT functions to the cloud, you’re choosing to use someone else’s computers. More specifically, you’re choosing to store and access your data using servers that are located in huge datacenters owned by cloud providers such as Amazon (AWS), Microsoft (Azure), and Google (Google Cloud).
As opposed to what? Well, as opposed to your own computers (on-premises IT infrastructure). This contrast is at the heart of what makes cloud computing such a powerful technology, but it’s also a common reason why individuals and organizations are wary about moving to the cloud …
The Cloud is Nothing to Fear
A recent report on cloud security found that 75% of enterprises are either “very concerned” or “extremely concerned” about how secure their information is in the cloud. Moving essential IT resources to the cloud — to remote servers that you don’t have physical access to — can sound like a scary proposition; on an intuitive level, business owners might feel like they will have less control over their IT environment and
diminished security simply because there is an instinct to keep the things we care about close. It’s the same instinct that drives some people to store cash under their mattress instead of in a bank.
But migrating to the cloud can have huge benefits. Contrary to what some people think, when you move data, apps, and other IT resources to the cloud, you’re not trading security for convenience — it’s more nuanced than that. In fact, there are ways in which the cloud offers businesses a more secure place to store information, as datacenters owned by large cloud providers are protected by top-notch physical security.
On top of that, migrating to the cloud can be hugely beneficial to a growing business’s bottom line. Stay tuned for the second installment in our four-part series of blog posts on cloud computing, where we discuss in more depth how cloud computing can help businesses grow and flourish, while simultaneously protecting critical data.
Now that we’ve defined what cloud computing is, let’s take a look at the different types of cloud computing.
There is No Cloud … There are Many!
Public vs Private vs Hybrid
There are two ways to categorize different cloud-based services: by deployment model and by service model. Let’s start with the deployment categorization, which distinguishes between three types of cloud computing services:
Public Cloud
Private Cloud
Hybrid Cloud
A public cloud is shared and utilized by multiple organizations, and the cloud infrastructure is owned and managed by a third-party cloud provider. Microsoft Azure is an example of a public cloud. The idea of sharing infrastructure with other organizations might give some business owners pause. But here’s the thing, moving certain IT resources and services to a public cloud doesn’t mean that your organization’s data will be accessible to other businesses. You’re only sharing infrastructure with other businesses, not data.
Two key benefits of migrating to a public cloud are cost and scalability. Letting remote servers host your organization’s IT resources means you don’t have to buy, set up, and manage your own on-premises infrastructure. This can save you a lot of money. A study done by Avasant Research found that companies fully utilizing cloud resources cut IT expenses by 15% on average.
Also, when you use a public cloud, you can scale up at the drop of a hat. Need more computing power? Rent more servers. Need less? Rent fewer. This allows you to flexibly and near instantly adjust the amount of IT resources you’re paying for based on your ever-changing needs.
Private clouds are used by a single organization. The IT infrastructure associated with a private cloud can be on-premises or remote, but the bottom line is that it is dedicated to one organization, which allows for greater control and customization compared to the public cloud. Businesses in the healthcare, financial, and governmental sectors frequently use private clouds for the sake of compliance with government and industry regulations.
Hybrid clouds involve elements of both public and private clouds. A hybrid cloud environment can allow organizations to utilize a private cloud for sensitive data or for minimizing latency (how quickly a network can process data), and a public cloud for workloads that require quick scalability. Hybrid cloud services can also enable a company to make a gradual transition from on-premises infrastructure to cloud computing, instead of migrating all at once.
IaaS vs PaaS vs SaaS
There are three types of service models in cloud computing:
Infrastructure-as-a-Service (IaaS)
Platform-as-a-Service (PaaS)
Software-as-a-Service (SaaS)
These types of cloud services can be delivered via public or private clouds, and they can be understood as forming a hierarchy of responsibility. In plain English, each one represents a greater degree of outsourcing: IaaS hands over some IT resources to a third-party cloud provider. PaaS hands over more. SaaS hands over the most. So, going from IaaS to PaaS to SaaS can be thought of as moving further and further away from fully on-premises IT infrastructure.
So which one is the best?
It depends! Which service model makes sense for a particular business comes down to the particular needs and goals of that business. IT expert Paul Korzeniowski puts this point nicely: “Companies are looking to move daily business services to the cloud. That change is only possible if they can tailor cloud services to their own operations.”
Working with a trusted IT provider who truly understands your business and its goals can be tremendously helpful when it comes to investing in the right type of cloud service model. Watch out for the third installment in this series of blog posts about cloud computing, where we will do a deeper dive into IaaS, PaaS, and SaaS, and the respective benefits of each.
Concluding Remarks
The cloud isn’t so much a new technology as it is a new way of utilizing and mobilizing technology that has been around for decades. In other words, cloud computing isn’t a new kind of IT resource, but a new way of delivering familiar IT resources to individuals and organizations. The reason is exists, like any innovation, is that it helps solve certain problems. Namely, cloud computing provides faster, more flexible, and more cost-effective IT resources — benefits that we will discuss in more depth in our next installment on cloud computing here on The 20 blog: The Top 3 Benefits of Moving Your Business to the Cloud. Don’t miss it!
