IaaS Market Soars in 2023: Promising Opportunities for MSPs

Demand is growing, but to capitalize on this market, you need to find ways to add value.

IaaS market growth

Infrastructure as a Service (IaaS) provides an appealing opportunity for organizations – and to managed services providers (MSPs) – in 2023. The Business Research Company predicts that the global Infrastructure as a Service market will expand at a 19.4 percent CAGR from 2022 to 2023 and reach $96.93 billion. They also expect strong growth to continue through at least 2027, reaching approximately $189 billion by that year.

Although staying informed of analyst predictions is important, MSPs can also gain valuable insights on the demand for IaaS from their peers, including these members of The ASCII Group.

Angel Rojas, Jr., President and CEO of DataCorps, says, “With the economy tightening, many businesses will be looking at ways to avoid capital expenses, so Infrastructure as a Service is a fantastic way to deliver value to those businesses.”

Paul Parisi, President and Founder of SaviorLabs, says his clients are starting to inquire about using IaaS.  He does, however, offer a caution.  “Most clients think they’ll save money because they do not need to have IaaS managed,” he comments.  It is wise to advise your clients that this isn’t the case. As Parisi says, “IaaS has almost zero effect on management.”

Best IaaS Candidates

Several industries, including banking, healthcare, education, manufacturing, retail, and others, are adopting cloud services at a rapid rate, which should help propel the IaaS market. Rojas believes, “There is a great opportunity to approach businesses looking to upgrade their infrastructure. Right now, we are focusing on businesses in industries that have not yet adopted cloud or IaaS as a tool to modernize,” he says. “There are still industries that fall into this category, and the opportunity for growth is tremendous!”

IaaS Business Drivers

Beneficial features of IaaS attract organizations to the model. Rojas comments, “People choose IaaS for their own reasons, but the biggest drivers are economic advantages, including renting vs. owning and capital preservation, and, when combined as a cloud solution, the opportunity to consolidate and streamline IT operations is incredibly attractive.”

Parisi notes the benefit of optimizing scale – along with a caveat. He says, “You only need to pay for what you use. But this brings up a critically important issue. Someone needs to track the spend. It is far too easy to leave systems running that are not doing anything. Many organizations using IaaS and other cloud-focused solutions get wake-up calls in the form of larger bills than what they expected.”

Mistakes to Avoid

As with any solution you provide to your clients, there are pitfalls to avoid and tips that help ensure your clients get the most value.

According to Rojas, the biggest mistake providers make is to focus on IaaS as the only solution they sell.  He says, “If all you have is a hammer, every problem is a nail. It rings true with IaaS. A business that adopts IaaS without a compelling business use case will likely run into performance issues that technology cannot solve because they weren’t a technology problem to begin with. Aligning with the client or prospect and their value streams is critical to the success of an IaaS project.”

Parisi says to ensure your clients have a clear understanding of Infrastructure as a Service. “The expectation, even if it is unspoken, is that IaaS will be cheaper and have all these benefits,” he says. “While these are not necessarily unrealistic expectations, they need to be diligently managed.”

In addition to managing clients’ expectations, Parisi says it is also important to communicate clearly and effectively and maintain detailed documentation.

Rojas adds, “Come alongside the client and understand their challenges so that you can deliver a solution that solves their pain.”

About The ASCII Group, Inc.

The ASCII Group is the premier community of North American MSPs, MSSPs, VARs and solution providers. The group has over 1,300 members located throughout the U.S. and Canada, and membership encompasses everyone from credentialed MSPs serving the SMB community to multi-location solution providers with a national reach. Founded in 1984, ASCII provides services to members including leveraged purchasing programs, education and training, marketing assistance, extensive peer interaction and more.  ASCII works with a vibrant ecosystem of major technology vendors that complement the ASCII community and support the mission of helping MSPs and VARs to grow their businesses. For more information, please visit www.ascii.com.

Kelly Allred

Kelly Allred is a freelance writer with more than a decade of experience and with multiple publishing credits. Her special interests include healthcare, technology, marketing, and sociology.