The Managed Service Provider (MSP) space is evolving rapidly. What started as IT support for on-premise infrastructure, device management, and network troubleshooting has transformed into a broader and more complex ecosystem. Today, MSPs are at a crossroads: do they continue competing solely on price and support options, or do they evolve into cloud solutions providers by partnering with hyperscalers like AWS, Azure, or Google Cloud (GCP)?
With the rapid rise in MSPs, differentiation is becoming increasingly difficult. Many are providing the same core services, using similar technology stacks, and fighting for the same customers. The race to the bottom on pricing is intensifying, and the only way to stand out is by offering more value. That’s where cloud partnerships come in.
The Evolution of MSPs: From On-Prem IT to Cloud Solutions
The role of an MSP has dramatically changed over the years. Initially, MSPs provided essential IT support, managed networks, and handled on-premise infrastructure. But as businesses moved their operations to the cloud, demand for cloud-based services skyrocketed. Many MSPs have already made the shift, offering migration, cloud management, and security services. The real question now is whether to take it a step further and become an AWS, Azure, or GCP services partner.
Hyperscalers have become the backbone of modern IT infrastructure. Businesses of all sizes are investing in cloud-based solutions, from SaaS applications to fully managed cloud environments. MSPs that fail to align themselves with these shifts risk falling behind.
The Challenges of MSP Growth Without Cloud Partnerships
Many MSPs find themselves struggling with:
- Commoditization: Most MSPs offer similar IT services, leading to heavy price-based competition.
- Limited Service Offerings: Without advanced cloud solutions, MSPs have fewer high-value services to sell.
- Scaling Issues: Managing only on-premise or basic IT services limits revenue growth potential.
- Customer Expectations: Businesses expect their IT service providers to guide them into the cloud era.
Without evolving, MSPs risk stagnation. Partnering with a hyperscaler is an effective way to break out of this cycle.
Why Becoming a Cloud Partner is a Game-Changer
AWS, Azure, and GCP offer structured partner programs that enable MSPs to expand their service catalogs, increase revenue opportunities, and stay ahead of the competition. Here’s how these partnerships drive MSP growth:
1. Increased Revenue and Higher Margins
Partnering with a hyperscaler unlocks new revenue streams. MSPs can offer cloud migrations, managed cloud services, security solutions, and advanced analytics. These services come with higher margins than traditional IT support, providing a more sustainable growth path.
2. Expanded Service Catalog
A broader service catalog allows MSPs to differentiate themselves. Offering cloud-native services such as serverless computing, AI-driven analytics, and Kubernetes management makes your MSP stand out in a crowded market.
3. Stronger Customer Retention
Customers prefer working with partners who can manage their entire IT landscape. Becoming a cloud partner ensures your MSP can provide end-to-end solutions, reducing the risk of customers looking elsewhere for cloud-related needs.
4. Competitive Differentiation
Instead of competing on price alone, MSPs can position themselves as strategic IT partners. Certifications from AWS, Azure, or GCP add credibility and demonstrate expertise, making it easier to attract larger clients.
5. Potential for Acquisition
Larger MSPs and investors actively seek companies with strong cloud partnerships. Aligning with AWS, Azure, or GCP increases the likelihood of acquisition opportunities, offering a clear exit strategy for MSP owners looking to scale and sell.
Choosing the Right Cloud Partner
Each hyperscaler has its own strengths:
- AWS Partner Network (APN): Ideal for MSPs focusing on enterprise cloud solutions, security, and AI-driven applications.
- Microsoft Azure Partner Network: Best suited for MSPs serving businesses that rely heavily on Microsoft tools (Office 365, Dynamics, etc.).
- Google Cloud Partner Program: A great fit for MSPs specializing in data analytics, machine learning, and DevOps solutions.
Selecting the right partner depends on your existing customer base, technical expertise, and long-term business goals.
How Red Beach Advisors Can Help MSPs Expand into Hyperscaler Partnerships
Navigating hyperscaler partnerships is complex. Many MSPs struggle with certification requirements, go-to-market strategies, and operational changes. This is where Red Beach Advisors comes in.
Red Beach Advisors helps MSPs and MSSPs develop a strategy for partnering with AWS, Azure, or GCP. Our consulting services assist with:
- Understanding the partner network requirements and eligibility
- Structuring service offerings to align with hyperscaler programs
- Developing a go-to-market strategy for cloud services
- Expanding revenue streams through cloud-based solutions
- Positioning MSPs for future acquisition opportunities
If you’re considering expanding your MSP into cloud services, contact Red Beach Advisors at info@redbeachadvisors.com to discuss how we can help you navigate the transition.
The Risks of Ignoring the Cloud Shift
Choosing not to partner with AWS, Azure, or GCP comes with risks.
- Customer Churn: Clients may leave for MSPs offering comprehensive cloud solutions.
- Lower Growth Potential: On-prem IT support is shrinking, limiting revenue opportunities.
- Reduced Market Competitiveness: Competing on price alone makes long-term profitability difficult.
Final Thoughts: The Future of MSP Growth
The MSP industry is no longer just about IT support—it’s about providing cutting-edge cloud solutions. Partnering with a hyperscaler like AWS, Azure, or GCP isn’t just an option; it’s becoming a necessity for long-term success. MSPs that invest in cloud partnerships will see increased revenue, stronger customer retention, and greater differentiation in a crowded market.
For MSPs looking to grow, expand service offerings, and position themselves for acquisition, Red Beach Advisors is here to help. Contact us today at info@redbeachadvisors.com to start your cloud partnership journey.