Microsoft, Google and Amazon are all chomping at the cloud market – problem or opportunity?

The Very Hungry Caterpillar is a favourite book in the Saunders household. My two eldest sons used to love it, and more recently my two year old son now demands I read it every evening. He corrects me on most of the items the caterpillar eats (“No daddy it’s not a gherkin it’s a cucumber!”), but I’m fine with that. When you read a book so many times, you can’t help thinking about it in other contexts, and it’s occurred to me recently that most service providers involved with Internet technology (call them ISP, MSP, whatever) are going through the same evolution that the caterpillar did.

Most businesses have to deal with change, but as I’ve written before in From ISP to MSP, the MSP industry leads the field when it comes to the pace of change. Much of this is down to the rate of development of technology and the insatiable demand our customers have to consume this technology, but much of this is the MSPs own desire to broaden its portfolio and capture more of the potential spend of its customer’s IT budget.

Like the newly hatched caterpillar, most service providers start with something simple and grow by doing more of it (one strawberry, two apples), but growing is expensive, and once outside investors get involved, the hungry caterpillar develops a real appetite. This is the stage I think most of the service provider market is in right now, the innocence of the early days has gone, and the urge to grow faster and faster has resulted in many service providers branching out into non-core areas of business like building huge assets of data centres. Some MSPs will argue that building data centres is a necessary, core area, but I disagree. The clue is in the name, service is what a service provider is all about, not assets (well not of the financial/physical kind).

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