By Scott Fuhriman, TierPoint VP of Sales and Product Development
Editor’s Note: This feature is part of a continuing series of snapshots chronicling TierPoint’s evolving corporate story. Fuhriman is based in TierPoint’s data center in Spokane, Washington. Click on the follow button on the bottom right to receive these stories in your inbox weekly.
Cloud computing adoption and rising security threats are fueling demand for managed services. One study found that in North America alone, cloud and managed service providers (MSPs) generated $154 billion in revenue in 2014. It isn’t tough to do a Google search and find projections substantially more than that for the current year.
I mention this as a backdrop to share a little bit about TierPoint’s journey into managed services and why we see more and more small businesses to mid-enterprise interested in bringing on an MSP either as part of a cloud service or in their own data centers. My team is based in the state of Washington. Our managed services journey is slightly different than our offices in different states, but it is fair to say that customer demand is moving the company to grow our managed services portfolio nationwide.
When I came on board 10 years ago, I felt that a lot of the managed security services available in the market were more set and forget services rather than strategic, customer-centric operations services. There was a clear need for a higher level of service offering that protected a client’s network perimeter and core. We decided to move ahead developing our own offering that was inclusive of our customer service model.
About 4 years ago, I was involved in defining and launching our Infrastructure-as-a-Service (IaaS) Cloud offering. This is a pretty complex endeavor due to needing to understand data center infrastructure, storage systems, networking, virtualization, orchestration and many other technologies used to deliver flexibility for the customer. Having learned the importance of establishing a partnership and trust with our managed security customers, it was important that our cloud services were delivered with a high-touch consultative approach to deliver and meet the customer needs and enable the value the service can offer. Along the way we have found customers relying on our expertise to help them transition to the Cloud and manage their environments effectively.
Then a couple years ago TierPoint launched a cloud based backup service offering locally. Although this is mostly a self-service type offering with the customer capable of fully managing the backups themselves, TierPoint is still actively managing the infrastructure and platform that delivers this service so organizations don’t have to.
Trust as a Market Barrier
We spent a year designing our managed security service. As you can imagine, we put great effort into earning client trust because that still remains as one of the toughest barriers to entry into the MSP market. No question, it was a big challenge that took time to overcome and now we are managing well over 1,000 security devices across the country as we have built trust and a track record of success.
One thing that helped us earn trust initially with our managed security was that we offered a no cost network security analysis and report to potential customers providing visibility of concerns and potential threats that they didn’t know existed in their environment. Fast forward to this year and security is now reaching board level visibility but remains a very specialized endeavor that many organizations need help with. Trust is key to providing this kind of service capability.
Compliance Requirements Also Driving MSP Demand
We are seeing more organizations that want to adhere to a popular compliance standard like PCI DSS even if it is not a requirement for their industry. They want the benefits that compliance offers such as risk reduction and better data controls. These companies are investing in the right technologies and tools but struggle supporting and maintaining them on a regular basis. When this occurs, the company is spending money but not realizing the full benefits of the technologies and tools. A recent Verizon study found that “just 28.6% of organizations remained fully PCI compliant less than a year after a successful PCI validation.” This is a human resource issue more than anything else. Companies often do not have the time or staff to devote to paying close attention to network security matters. This is a major impetus for managed security services market growth today. Concurrently, the types of threats continue to evolve, there are more ways to get inside today’s networks and new technologies and solutions need to be implemented and actively managed. This is fueling the need to hire outside experts to manage those capabilities.
Two Managed Security Services Trends
MSPs are embracing a big data approach to predict security events and determine root causes of events such as breaches. We can produce security reports with incredible granularity in moments today versus the days that is used to take. Again, if you hire an MSP, you need to make sure they are reviewing data and alerts regularly for an accurate picture of what is going on in your network.
At first, public cloud was the dominant cloud type then private cloud solutions came into prominence. Today, we’re seeing hybrid cloud really take off as a mix of public and private clouds along with colocation options. Data needs a secure path to flow to and from the cloud and a client production site or colocation. MSPs are assisting organizations to implement and manage advanced technologies such as DDoS protection, virtual system encryption, intrusion detection/prevention and other services to help keep data and communications secure in these cloud environments.
What is Next?
The market is going to continue to evolve. I see customers wanting to continue to move up the stack of managed services offered in the Cloud. We are already seeing increasing requests to manage the operating systems and certain underlying application components and we have begun to offer capabilities around this. In the next several years I believe customers will expect increased management capabilities of their systems.
Another challenge that will become increasingly difficult to deal with is data management on massive scales because organizations and services are and have been collecting information from all kinds of new sources. The Internet of Things is one of those drivers of new ways that will need to be created to keep data growth and management in check. This translates to more demand for services that can help organizations survive and thrive data management challenges.
Privacy will continue to be a concern so we could see more mandated data protection requirements and more breach notification laws. Addressing industry and regulatory rules will demand a huge amount of resources. It is possible that innovations in flash technologies, machine learning and security management software may make it more viable for organizations to feel they can address security internally. Though I think in most cases, outsourcing will still be the most efficient and effective way to manage certain security aspects of an organizations overall security program.
Finally, I believe experienced and skilled workers in the IT industry are getting more difficult to come by as the largest companies are sucking the available talent up to keep up with their growth. This means that there will be a smaller pool of people to choose from and their capabilities to properly support organizations will suffer. I think this will also lead companies to need more outsourcing.
For TierPoint’s part, the lessons we learned early on about delivering managed security and cloud services should serve us well moving forward. Managed means moving. It is continuous skill development and retention, change management, monitoring and reporting and not simply installing a product and forgetting about it until it breaks or needs to be replaced. The future of managed services is alive and growing.