ITDM VS BDM MARKETING Channel DEI channel v i s ionmag . com Volume 21 Issue 5 SEPTEMBER - OCTOBER 2022 The Voice of the Channel Sponsored by THE MORPHING ‘MSP’ MODEL DARK WEB SECURITY Scan to Register for
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SEPTEMBER - OCTOBER 2022 CYBER PATROL 8 Containing Container Issues Effective container security controls becoming a must By Prof. Avishai Wool 12 Going Dark MSSPs should consider adding dark web monitoring to their security arsenals By Ben Jones BUYERS SIDE 16 It’s Still ITDMs’ Kitchens Cloud marketers must be careful not to underestimate the prevailing influence of IT decision makers By Martin Vilaboy 24 A Clouded View of Costs Executives seek to gain control of cloud computing costs By Bruce Christian CHANNEL MANAGEMENT 30 The Morphing ‘MSP’ Model The recent burst in cloud-delivery changes what it means to resell managed services By Martin Vilaboy 36 DEI Enters the Channel with Juniper’s Diversity+ Partner Program By Bruce Christian 40 Windstream Enterprise Shifts Perspective with New Focus on the Channel 42 Continuously Evolving, SolEx Adds Security to its Partner Story CORE COMMUNICATIONS 44 The State of Remote Work It’s still a hybridized world By Martin Vilaboy 52 Unlock More Communications with VTech Snom 54 Bicom Systems: A Letter to Our 18-Year-Old Self 56 Sage Management Looks to Transform Telecom with Blockchain 58 NHC Celebrates 20 Years with Continued Momentum 60 Telesystem: IT is All About Trust 62 Aircall Helps Enhance Customer Interactions 64 IntelePeer Bolsters CX with Automation 68 Touchstone Technologies Takes Testing, Reporting to the Next Level 6 Editor’s Letter 74 Ad index CONTENTS Volume 21 – Issue 5 4 CHANNELV ISION | SEPTEMBER - OCTOBER 2022 Scan to Register for
This month’s cover feature on the morphing MSP business model explores a theme in which few ChannelVision readers, if any, are not intimately familiar: the shift to cloud and SaaS procurement and delivery. Even so, recent data from Computer Economics point to a significant acceleration in this shift, most notably due to pandemic-imposed restrictions and shutdowns. Again, it’s no secret how capital spending has consistently declined as a percentage of total IT spending during the last 10 years. “Across nearly all sectors, capital budgets are becoming less relevant,” said analysts at Computer Economics. But 2022 saw a “sharp drop,” they continued, dipping to 13 percent. That’s down from 17 percent of IT spending the last two years and 18 percent in 2018. As recently as 2013, IT capital budgets made up nearly a quarter of all IT spending (24 percent at the median). Further showing just how much infrastructure has shifted to the cloud, data centers consumed nearly a third of IT capital budgets five years ago. “This year, that allocation has dropped to less than 18 percent,” said Computer Economics. The research firm does see a bit of a blip in capital budgets as companies look to “catch-up spending” after the forced delays due to the past two years of uncertainty. A capital IT uptick also is likely driven by infrastructure to expand support for remote workers, build out new digital processes and strengthen security and business continuity, “all of which rose in priority during the pandemic,” said the research firm. Spending Priorities by IT Initiative, All Sectors Cloud applications 79% Cloud infrastructure 70% Data analytics/Business intelligence 60% Digital transformation 57% Disaster recovery/business continuity 48% Systems/Data integration 45% Legacy systems 15% IT shared services 9% Automation 9% Source: Computer Economics Moving forward, however, the cloud – both infrastructure and applications – continues to be the overwhelming priority among IT departments, surveys suggest, with a full 79 percent of respondents increasing their spending on cloud applications. “While existing equipment must still be refreshed, the years of large capital expenditures in order to handle growth are nearly gone,” said the firm’s analysts. It’s largely why organizations including CompTIA, the Technology and Services Industry Association and Ingram Micro are advising their MSPs and IT shop partners and members to beef up customer experience and sales agencies skills. Anyone know a group of partners that are proficient in old school sales and customers relations? Accelerating the Model Morph LETTER Martin Vilaboy Editor-in-Chief martin@bekabusinessmedia.com Bruce Christian Senior Editor bruce@bekabusinessmedia.com Brady Hicks Contributing Editor brady@bekabusinessmedia.com Percy Zamora Art Director percy@bekabusinessmedia.com Rob Schubel Digital Manager rob@bekabusinessmedia.com Jen Vilaboy Ad Production Director jen@bekabusinessmedia.com Berge Kaprelian Group Publisher berge@bekabusinessmedia.com (480) 503-0770 Anthony Graffeo Publisher anthony@bekabusinessmedia.com (203) 304-8547 Beka Business Media Berge Kaprelian President and CEO Corporate Headquarters 10115 E Bell Road, Suite 107 - #517 Scottsdale, Arizona 85260 Voice: 480.503.0770 Email: berge@bekabusinessmedia.com © 2022 Beka Business Media, All rights reserved. Reproduction in whole or in any form or medium without express written permission of Beka Business Media is prohibited. ChannelVision and the ChannelVision logo are trademarks of Beka Business Media 6 CHANNELV ISION | SEPTEMBER - OCTOBER 2022
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8 CHANNELV ISION | SEPTEMBER - OCTOBER 2022 Organizations, now more than ever, are adopting container technology. Instead of powering up servers and instances in the cloud, they are using containers to run business applications. In turn, securing these containers has become equally as important as securing other digital assets that the business is dependent upon. There are two main pillars to think about. For starters, there is the code. Businesses want to be able to scan the containers and make sure that they are running legitimate code without any vulnerabilities. Next is the network. Businesses need to control access to and from the container (what it can connect to), both inside the same cluster, other clusters, and different parts of the network. To understand the role of container security within the overall view of network security, there are three points to consider. First, if you’re only concerned about securing the containers themselves, then you’re looking at nano-segmentation, which involves very granular controls inside the applications. Secondly, if you’re thinking about a slightly wider scope then you may be more concerned with microsegmentation, where you are segmenting between clusters or between servers in a single environment. Here you will want to enforce security controls that determine the allowable communication between specific endpoints at specific levels. Finally, if the communication needs to go further, from a container inside one cluster within one cloud environEffective container security controls becoming a must to securely manage application connectivity. Here’s some useful container best practices to help do just that. CYBER PATROL CONTAINING CONTAINER ISSUES By Prof. Avishai Wool
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ment to an asset that’s outside of the data center, then that might need to go through broader segmentation controls such as zoning technologies, security groups or a firewall at the border. So, there are all these layers where you can place network security policies. When looking at a particular connectivity request (say for a new version of an application) from the point of view of a given container, you should ask yourself: what is the container connected to? What is it communicating with? Where are those other sides of the connectivity placed? Based on that determination, you will then know which security controls you need to configure to allow that connectivity through the network. How does containerization correlate with application centric security policy management? There are a number of different aspects to the relationship between container security and application security. If an application uses containers to power up workloads, then container security is very much an integral part of application security. When you’re adding new functionality to an application, powering up additional containers, asking containers to perform new tasks whereby they need to connect to additional assets, then the connectivity of those containers needs to be secured. And security controls need to be regulated or changed based on what the application needs them to do. Another factor in this relationship is the structure of the application. All the containers that run and support the application are often located in one cluster or a micro-segment of the network. So, much of the communication takes place inside that cluster, between one container or another, all in the same cluster. However, some of it can go to another cluster or somewhere that’s not even containerized. This is actually a good thing from an application point of view as the container structure can be used to understand the application structure as well. Not sure about container orchestration? Here’s what to know. Container orchestration is part of a bigger orchestration play which is, in general, related to the concept of infrastructure as code. You want to be able to power up an environment with all the assets it requires and have it function simultaneously so you can duplicate it. There are various orchestration technologies that can be used to deploy the security policies for containers, which is an excellent way to maintain container-based applications in a consistent and repeatable manner. Then if you need to double it or multiply it by 100, you can get cookie-cutter copies of the same thing. How will container security solutions play out in the future? Organizations today have the technology to enforce security controls at the container level, but these controls are very granular, and it’s time-consuming to set policies and enforce them, particularly with issues like staff or skills shortages. Looking ahead, companies are likely to take a hierarchical view where container-based security is controlled at the application level by app owners or developers, and at the broader levels to ensure that the measures deployed throughout the network have the same degree of sophistication. Procedures and tooling are all evolving, so we don’t have a definitive answer as to how this will all end up. What are organizations going to be doing? Where will they place their controls? Who has the power to make the changes? When newer technologies are deployed, customer adoption will be crucial to understanding what makes the most sense. This will be interesting as there will be multiple scenarios to help companies master their security blueprint as we move forward. o Prof. Avishai Wool is CTO and founder of AlgoSec. CYBER PATROL 10 CHANNELV ISION | SEPTEMBER - OCTOBER 2022 How the What specific security concerns do you have about containers? Source: Tripwire, 2019 54% 52% 43% 42% 40% 38% 5% ITDM vs. BDM: ITDM Inadequate container security knowledge among teams Visibility into security of containers and container images is limited Inability to assess risk in container images prior to deployment Lack of tools of defectively secure containers Insufficient process to handle fundamental differences in securing containers Not able to assess risk in deployed containers I have no concerns about container security 0 10 20 30 40 50 60 Sourc Cost o t Cloud r spec Orga Organ “clou
According to Wikipedia, the “internet” is defined as “the global system of interconnected computer networks that uses the internet protocol suite to communicate between networks and devices. The internet carries a vast range of information resources and services, such as the inter-linked hypertext documents and applications of the World Wide Web, electronic mail, telephony and file-sharing.” Any good managed security services team will have the technologies and processes in place to protect its customers’ internet-facing assets. However, the description only goes so far as to scratch the surface of what the internet truly is. Consider the Internet like an iceberg: it extends far below the surface. This can create problems from a cybersecurity point of view because, similar to an iceberg, what security teams can’t see could be dangerous. Hidden below the visible top of the internet iceberg, or the areas seen using search engines for finding information, sits the deep web. The deep web makes up most of the iceberg mass and consists of everything that’s hidden from search engine indexing or “crawling.” Much of this information consists of organizations’ databases that shouldn’t be freely accessible, though these are 100 percent legitimate. Going even further, to the bottom of the iceberg sits the dark web, only accessible using specialist browsers and, though there are legitimate reasons for using it, the dark web also provides a home to threat actors and cybercriminals across the globe. While the dark web represents the smallest portion of the information iceberg, it may also present the biggest threat. Because it’s here that criminal intelligence is available in troves: credentials, IP addresses, open ports and personal information all can be found and shared amongst criminals on the dark web, which in turn can be used to facilitate attacks against organizations and individuals. Yet, although investing in both threat intelligence and technology is an accepted and instrumental part of any managed security service provider’s (MSSP) cybersecurity strategy, monitoring of the dark web is often overlooked; and this must change so that they can more adequately protect themselves and customers. The murky side The dark web, in and of itself, and similar to any technology infrastructure, is not an entirely bad thing. Indeed, just like the broader internet it can be a force for good – for example, an anonymizing medium where journalists, activists or individuals who need to evade persecution can communicate in relative safety. Or, as we have come to learn, it can be a place for evil where cybercriminal markets exist to trade in stolen and compromised data. It is this area where MSSPs could focus more attention to up-level their cyber threat intelligence capabilities. For instance, take the ransomware threat that exploded across the globe in the last couple of years. The criminal gangs behind these attacks, the likes of Conti, Grief and Lockbit, were all active on the dark web. Not only do such threat groups recruit “affiliates” who take on the reconnaissance and compromise steps of a ransomware attack in return for a share of the ransom, but it is also where both initial access brokers and remote desktop protocol brokers ply their trades. These brokers have marketplaces where stolen credentials and compromised accounts are packaged up and often auctioned to the highest bidder. With these types of information, ransomware affiliates can more efficiently and effectively buy their way into gaining an initial foothold within an organization’s network. MSSPs should consider adding dark web monitoring to their security arsenals CYBER PATROL GOING DARK By Ben Jones 12 CHANNELV ISION | SEPTEMBER - OCTOBER 2022
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While it depends very heavily on where a compromised organization is located, how many employees it has and, of course, its profitability, there’s a package for all budgets when it comes to the credentials market. A good rule of thumb is that lowerlevel, lower-privileged, employee credentials will typically be at the bottom of the pricing spectrum, and admin access to an organization’s network will cost much more. The outcome of these auctions and sales can be crippling for an organization targeted by a ransomware gang or other criminal endeavour, such as a DDoS attack for rent or the sale of “vulnerability exploit kits.” Knowing all this, it’s absolutely critical for managed security services teams who are charged with protecting their customers to have visibility into these dark corners of the dark web. It provides an early warning system when access credentials or IP addresses for an organization go up for sale and gives MSSPs crucial foresight that an attack may be imminent. Furthermore, being able to track dark web traffic going into and out of the organization could provide crucial telltale intelligence that something is awry. Dark web monitoring While dark web monitoring won’t prevent a data breach that has already happened, it will shine a light on credentials and other information, such as open ports or IP addresses, that have made their way into criminal networks. Though it should not be thought of as a replacement for existing cyber defences, dark web intelligence and monitoring can augment current threat intelligence capabilities and bring the visibility needed to head off threats before they can be acted upon. While generic threat intel usually involves the study of criminal actors, the domains they use, their IP addresses and signatures that are fed into firewalls and network detection systems, dark web monitoring differs in that it’s very much concerned with detecting attack precursors before an exploit can be executed. Both types of intelligence are essential to organizations of any size and are essentially solving different problems in unique ways. Similar to generic threat intelligence, it is possible to gain threat visibility in-house but is equally, if not more so in fact, expensive and difficult to do effectively. A huge amount of expertise and infrastructure is required to collect and analyse relevant dark web data internally. Which is why most organizations will look to a third-party solution provider such as an MSSP, and this is where they can add a huge amount of value by coupling good cyber-defensive capabilities with proactive scanning of potential threats to identify them at the earliest opportunity. Once MSSPs view a monitoring solution as a perfect, complementary, fit with their proactive cybersecurity strategies, getting a handle on ROI becomes much easier. In fact, given that such monitoring can be thought of as a workable – and with today’s everevolving threat landscape, essential – detection and prevention mechanism, it’s almost a no-brainer. It’s no secret that cyberattacks have huge organizational costs when they occur, from GDPR fines through to ransomware demands or the costs of having an organization shut for months at a time. An investment in dark web intelligence and monitoring pales into insignificance by comparison and, perhaps most importantly, can allow MSSPs to extend their threat intelligence capabilities and better protect their customers. o Ben Jones is CEO of Searchlight Security. CYBER PATROL Documents Financial Accounts Emails & Passwords Personal ID data set 40% Payment card data 63% Streaming 61% Personal emails 70% Driver’s license 35% Payment processing accounts 17% Other services 20% Voter’s emails 24% IDs 14% Bank accounts 10% Social media 8% Business email 6% Passports 9% Crypto accounts 10% Mobile phone 7% SSN 2% Gaming 3% Source: NordVPN 14 CHANNELV ISION | SEPTEMBER - OCTOBER 2022 SD-WAN adoption today vs. in 5 years Source: Altman Solon survey f r Masergy, February 2021 say that their ast year. 29 21 16 -79% of enterprises today have adopted SD-WAN to some extent In 5 years, -92 of ente adopt SD-WAN and 38% it at all loca Today 21% 54% 16% 10% 8% 25% 28% In 5 Years No SD-WAN Some SD-WAN Mostly SD-WAN Fully SD-WAN No SD-WAN Some SD-WAN Mostl SD-WA 68% gender, % of repondents omen Men Women avigate life nges Helped tak actions to prevent or manage burnout +5 +5 6% 12% 39% 43% Accounts Emails & Passwords Financial Documents Categories Sold on the Dark Web
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It’s fairly well documented how IT buying decisions are no longer made by one or two people within an organization. Rather, there is usually a type of “tech buying collective” that holds influence over decision making, with an average of six to eight key stakeholders possibly weighing in on the purchasing process of cloud technologies, show surveys by business IT member community Spiceworks. Often larger companies will have even larger buying collectives made of 10 decision makers or more. The research also suggests that the larger the group of decision makers, the longer the buying cycle. “There’s no single B2B buyer persona that accurately represents every IT buyer making purchase decisions,” said Spiceworks researchers. “Instead, stakeholders with unique needs, preferences and objections make up a buying collective.” Generally included in the buying collective are IT decision makers (ITDMs) who manage and support the technology on a daily basis and line of business decision makers (BDMs) who might be end users or might oversee the approval process. While this certainly means there are now more cooks in the kitchen who must be engaged and persuaded, the marketers and sellers of cloud solutions must be careful in their efforts to “convert the entire kitchen” not to lose sight of the fact that ITDMs are still the head chefs in the room, and their influence remains strong throughout the entire purchase process. Cloud marketers must speak to a circle of stakeholders, but it shouldn’t come at the cost of underestimating the prevailing influence of IT decision makers. IT’S STILL ITDMS’ KITCHENS By Martin Vilaboy BUYERS SIDE 16 CHANNELV ISION | SEPTEMBER - OCTOBER 2022
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“Our research on the cloud buyer’s journey shows members of the buying collective turn to internal tech experts early and often,” said Spiceworks researchers. What’s more, while both ITDMs and BDMs both tend to seek out the same information, ITDMs are more likely to consume marketing content than BDMs, and they are significantly more likely than BDMs to engage with tech marketing through webinars, in-person and virtual conferences, online communities, social networks and blogs, show Spiceworks findings. These types of marketing engagements cannot be underestimated, as it’s estimated that 70 percent of the buyer journey takes place before a sales engagement, said the Spiceworks report. Overall, 59 percent of all decision makers said they do the majority of their tech purchase research online, without speaking to a salesperson. Among ITDMs specifically, 64 percent said they avoid engaging with sales during this process (vs. 52 percent of BDMs). Among small businesses, three-quarters of ITDMs prefer researching primarily online without talking to sales. Cloud Gatekeepers While it’s true the initial evaluation of a new IT service may stem from a problem experienced by BDMs and the line-of-business end users who report to them, ITDMs largely remain the gatekeepers for new cloud solutions. Spiceworks’ analysis of the levels of engagement by ITDMs vs. BDMs throughout the various stages of the BUYERS SIDE 18 CHANNELV ISION | SEPTEMBER - OCTOBER 2022 Source: Tripwire, 2019 ITDM vs. BDM: When decision makers are involved during cloud buyer’s journey Source: Spiceworks ITDM vs. BDM: The most want d information during the cloud buyers jou y 65% 70% 68% 33% 47% 37% 58% 20% 27% 38% 22% 30% 36% 44% Determine need Evaluate solutions /vendors Recommend solutions/vendors Approve funds ITDM BDM Make final decisions Approve purchase Implement/ manage solutions Source: Spiceworks Transparent pricing information Detailed product or tech specs Product demo/ walkthrough Deployment guides Side-by-side feature comparisons High-level summaries Conversation with solutions architect Compliance (e.g, GDPR, HIPPA, SOX, PCI) ROI/TCO estimates 59% 51% 58% 49% 58% 47% 58% 46% 53% 48% 50% 44% 50% 42% 49% 38% 47% 40% ITDM BDM Source: Tripwire, 2019 ITDM vs. BDM: When decision makers are involved during cloud buyer’s journey Source: Spiceworks ITDM vs. BDM: The most wanted information during the cloud buyers jouney 0 10 20 30 40 50 60 65% 70% 68% 33% 47% 37% 27% 38% 22% 30% 36% 44% Determine need Evaluate solutions /vendors Recommend solutions/vendors Approve funds ITDM BDM Make final decisions Approve purchase m Source: Spiceworks Transparent pricing information Detailed product or tech specs Product demo/ walkthrough Deployment guides Side-by-side feature comparisons High-level summaries Conversation with solutions architect Compliance (e.g, GDPR, HIPPA, SOX, PCI) ROI/TCO estimates 59% 51% 58% 49% 58% 47% 58% 46% 53% 48% 50% 44% 50% 42% 49% 38% 47% 40% ITDM BDM
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buying process found that ITDMs are about twice as likely to be involved when it comes to determining need, evaluating solutions and recommending vendors. Perhaps not surprisingly, ITDMs become less involved than BDMs when funds and purchases are approved, and final decisions are made. And once a decision is made, ITDMs once again become the primary players to implement and then manage the solution on an ongoing basis, making them central to retention efforts. That’s especially important for cloud services, the Spiceworks report points out, in which recurring subscriptions are dependent on ongoing user satisfaction. “Because ITDMs will continue to evaluate the product over time, sales and marketing teams are advised to stay on ITDMs’ good sides if they wish to retain customers,” they advised. Even during the stages in which ITDMs are less involved in the decision making, their recommendations remain highly influential. “It’s a given that business decision makers trust IT professionals to make tech decisions and recommendations,” said the Spiceworks report, “but it may come as a surprise that BDMs also trust ITDMs’ business savvy as well. Indeed, nearly three-quarters of BDMs said ITDMs in their organizations understand business needs well enough to make informed tech decisions. Interestingly enough, “the inverse is not necessarily true,” Spiceworks researcher continued. While BDMs give themselves high marks for their tech know-how, ITDMs don’t necessarily concur. A full 58 percent of BDMs self-reported understanding tech well enough to make informed tech purchase decisions, but only 41 percent of ITDMs agreed. It should be noted, however, that IT decision makers in larger organizations had a higher opinion of their BDM peers, as 56 percent of ITDMs in large organizations (500+ employees) said BDMs understand tech well enough to make informed IT purchase decisions compared to only 34 percent of ITDMs in SMBs (1-499 employees). Looking specifically at the differences in marketing content consumption preferences, “ITDMs want to get a good feel for a product before making a recommendation to business decision makers,” suggested analysts at Spiceworks. Since cloud-based solutions lack tangible products, ITDMs say online demos/walkthroughs, tech spec sheets, how-to guides, handson labs and webinars are particularly important to gaining an understanding of what it’s really like to use the product before their organization makes a commitment. On the other hand, BDMs tend to gravitate toward word-of-mouth, valuing the opinions of existing users and analysts, showed the surveys. “For example, BDMs have a stronger preference than ITDMs for content that includes interviews, case studies, testimonials and third-party research.” Incidentally, BDMs are also more receptive to advertising or podcasts when evaluating a cloudbased solution. ITDM vs. BDM: Differences in Most Useful Content Types in Cloud Purchase Process Source: Spiceworks How-to demos/ walkthroughs Technical spec sheets How-to-Guides Hands-on-Labs Webinars or live online events Interviews with product experts Case studies Customer testimonials Articles/blogs Research reports Commercials/ promotional videos Podcasts 50% 31% 39% 28% 36% 24% 33% 20% 28% 19% 13% 20% 12% 18% 12% 16% 16% 9% 10% 18% 6% 10% 4% 8% ITDM BDM BUYERS SIDE 20 CHANNELV ISION | SEPTEMBER - OCTOBER 2022
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Cost and Security Perhaps the biggest difference in the type of content that resonates with each group of decision makers comes in the area of costs. While 62 percent of BDMs believe using public cloud is cheaper than self-hosting applications, only 46 percent of ITDMs believe this to be true. Overall, only 27 percent of U.S.-based ITDMs believe that using the cloud is cheaper than self-hosting. “This pessimism represents a challenge for tech marketers, especially because IT professionals might be initial gatekeepers that have the power to rule out a solution early in the buyer’s journey,” warned Spiceworks analysts. Another area of misalignment among ITDMs and BDMs is around payment preferences. Across all geographies, 55 percent of BDMs say their organizations would rather pay for tech infrastructure as an operational expense (opex) rather than a less frequent but larger capital expense (capex) compared to 47 percent of ITDMs. Among U.S. organizations surveyed, the gap is even wider: 44 percent of BDMs in the U.S. said their organization prefers opex over capex compared to only 27 percent of ITDMs. Likewise, BDMs are more likely to view adopting cloud technology as a way to reduce the need for potentially expensive hires or additional training. Nearly six in 10 BDMs said using cloud services can reduce the need for developing specialized IT skills and expertise in-house, compared to half of ITDMs. BDMs also are more likely than ITDMs (49 percent vs. 39 percent) to say their organization follows a “cloudfirst” technology strategy. Turning to the also-important issue of security, a plurality of IT buyers said cloud providers offer superior security compared to their own organization’s data centers, but significantly more BDMs hold this belief (59 percent) than ITDMs (50 percent). “Additionally, our data suggests some BDMs might have a blind spot regarding cloud security,” said Spiceworks researchers. When using cloud-based B2B solutions, companies essentially pay for the use of infrastructure and services maintained by a third party, continued Spiceworks researchers, potentially leading BDMs to assume their cloud providers will provide adequate security and safeguard everything. However, the “shared responsibility model” for security and compliance in the cloud says service providers (such as Amazon Web Services or Microsoft Azure) are responsible for the underlying infrastructure of the cloud, explained Spiceworks researchers. At the same time, customers are responsible for what’s running on top of that infrastructure, including their own data, access management settings, applications and configurations. “While we found that the majority of companies (55 percent) have evaluated and addressed the ‘shared responsibility model’ for security and compliance as part of their cloud strategy, there’s a disconnect between ITDMs and BDMs,” said the report. In small businesses (1-99 employees), for example, 57 percent of BDMs think that they’ve addressed the shared responsibility model compared to only 37 percent of ITDMs. The same phenomenon exists in medium-size businesses (100-499 employees), where 71 percent of BDMs think they’ve addressed the shared responsibility model, compared to only 44 percent of ITDMs. ITDMs and BDMs are much more aligned in larger organizations, where 73 percent of ITDMs and 70 percent of BDMs say they’ve addressed the shared responsibility model. Forced to consider a tech buying collective made up of stakeholders with unique needs, preferences and objections, marketers of cloud solution can no longer rely on a one-size-fits-all approach. Rather, they must have a grasp of the key differences between ITDMs and BDMs and the specific objections that might need to be overcome. At the same time, cloud solutions marketers must remain in tune with the types of messaging and materials that ITDMs in particular are seeking, as IT remains central to the cloud purchase journey despite its level of direct involvement in any specific steps along the way. o How important is optimizing spending and reducing the cost of existing cloud services? Source: Anodot ‘2022 State of Cloud Cost R port’ What are your top challenges to controlling cloud costs? yer’s journey ITDM vs. BDM Beliefs about Cloud Costs 0 60 37% 58% 20% 27% % al s Approve purchase Implement/ manage solutions 59% 58% Source: Spiceworks Cost of cloud cheaper than self-hosting Cloud reduces need for specialized expertise Organization prefers capex over opex Organization employs “cloud first” strategy 46% 62% 50% 59% 47% 55% 39% 49% ITDM BDM Very important Extremely important Somewhat important Hardly important 59% 30% 10% 1% Gaining true visibility into cloud usage and costs Complex cloud pricing Complex, multi-cloud environments 49% 50% 53% 22 CHANNELV ISION | SEPTEMBER - OCTOBER 2022
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Executives seek to gain control of cloud computing costs A CLOUDED VIEW OF COSTS By Bruce Christian The migration to the cloud continues rapidly, and according to McKinsey & Co., by 2024, most companies aim to spend $8 out of every $10 for IT hosting in the cloud. Morgan Stanley reported that CIOs say cloud computing will see the highest rate of IT spending growth in 2022. What agents in the channel should know – if they don’t already – is that cloud cost complexity also is growing. The ongoing rapid migration to the cloud combined with complexities in navigating cloud usage and costs has companies struggling to control their spending and minimize waste. Compounding these problems is the uncertainty of the economy and the question of whether a recession is just around the corner. According to a new study on the cost of cloud service by AI and DevOps cost management firm Anodot, companies face a cloud cost visibility crisis with implications on the bottom line. As cloud BUYERS SIDE 24 CHANNELV ISION | SEPTEMBER - OCTOBER 2022
spending becomes one of the most expensive resources for some organizations, IT, finance and C-suite leaders are prioritizing strategies and tools to optimize cloud spend, reduce waste and centralize cloud cost management. The 2022 State of Cloud Cost Report was compiled after a two-week survey conducted in June and July. As for annual cloud spend, about half of the 131 high-level IT executives surveyed said their companies spend less than $1 million annually on the cloud, while the rest spend more than $1 million. Fifteen percent said they are spending more than $5 million each year. More than half (53 percent) of the Anodot survey respondents say their biggest challenge in controlling costs is in achieving true visibility into their cloud usage and the costs associated with that. This is followed by the complexity of cloud pricing (50 percent) and the use of complex, multi-cloud environments (49 percent). The three issues are related, because it can be difficult to have visibility into every aspect of cloud usage with an associated cost when the environment is complex or stretched across multiple providers’ platforms. And, according to the survey, for companies with a multicloud strategy, managing and optimizing costs across providers is nearly impossible because of proprietary and dissimilar pricing models. So, the challenge of gaining visibility to control cloud costs has given rise to “FinOps,” an evolving cloud financial management discipline that allows organizations to get maximum business value by helping engineering, finance, technology and business teams to collaborate on the company’s datadriven spending decisions. However, even with FinOps, some of the respondents still feel they lack the visibility they need to improve cost management. Because a company’s cloud spending often occurs in siloes spread among different teams and perhaps many third-party cloud providers, communication and budgeting gaps emerge. While controlling cloud costs is a priority for IT executives, nearly half (49 percent) say the process is difficult, citing the lack of visibility into what services are generating costs and how they are allocated as the primary culprits. Optimizing efficiency Businesses with strong visibility can optimize cloud efficiency and spending by knowing what to do to save money. Anodot’s study estimated that a third of cloud spending is wasted by either going unused or underused. This wasted spending tends to raise operational expenses without providing any value. Visibility and the ability to measure cloud waste are critical in achieving meaningful reductions. The study points out that platformnative tools provide organizations analysis of resources running and actual usage, but actionable insight is limited. More than 90 percent of the responding IT executives say they believe cloud waste can be addressed through operational and strategic improvements. They say How important is optimizing spending and reducing the cost of existing cloud services? Source: Anodot ‘2022 State of Cloud Cost Report’ What are your top ch llenges to controlling cloud costs? Source: Anodot ‘2022 State of Cloud Cost Report’ What types of tools do you use to manage and optimize cloud usage? uyer’s journey Content Types 50 60 37% 58% 20% 27% % nal ns Approve purchase Implement/ manage solutions 59% 58% 58% 58% % Source: Spiceworks Very important Extremely important Somewhat important Hardly important 59% 30% 10% 1% Gaining true visibility into cloud usage and costs Complex cloud pricing Complex, multi-cloud environments Lack of centralized cloud governance Resource sprawl due to ease of provisioning 35% 49% 50% 38% 34% 27% 53% 27% Native tools Third-party solution that manages multi-cloud environments Multiple third-party solutions Built our own How important is optimizing spending and reducing the cost of existing cl d services? Source: Anodot ‘2022 State of Cloud Cost Report’ What are your top challenges to controlling cloud costs? Source: Anodot ‘2022 State of C Cost Report’ uyer’s journey 50 60 % 37% 58% 20% 27% 8% inal ons Approve purchase Implement/ manage solutions 59% % 58% 58% 58% 3% ource: Spiceworks than self-hosting Cloud reduces need for specialized expertise Organization prefers capex over opex Organization employs “cloud first” strategy 62% 50% 59% 47% 55% 39% 49% ITDM BDM Very important Extremely important Somewhat important Hardly important 59% 30% 10% 1% Gaining true visibility into cloud usage and costs Complex cloud pricing Complex, multi-cloud environments Lack of centralized cloud governance Resource sprawl due to ease of provisioning 35% 49% 50% 53% 27% BUYERS SIDE 26 CHANNELV ISION | SEPTEMBER - OCTOBER 2022
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the first step in reducing waste is to determine where it originates. And according to Anodot’s study, a review of any cloud bill identifies three elements: services, utilization, and unit price. Facets of each can be wasteful when not managed properly and when costs are not aligned to the business. Beyond the invoice, more data are needed to understand the minutiae of cloud spending. In fact, 63 percent of the companies surveyed say they “seem” to have their cloud costs under control, but 37 percent of the IT executives acknowledged that they have been caught off guard about the cost of their cloud services. That’s understandable, given the cloud’s pay-for-what-you-use pricing model. Pay as you go Because of cloud’s pay-for-whatyou-use pricing model, costs need to be managed carefully, or it becomes easy to lose track of what’s being used, Anodot’s study stated. This is especially true for organizations with large development teams that move quickly and tend to try new things. Unfortunately for those company, the surprise costs only are discovered when the monthly invoice arrives. Understanding a company’s “bottom line” also is necessary. If cloud spending increases or the invoices contain unexpected costs, and the company is not raising more revenue, the result is a diminishing bottom line. Because of this, cloud costs can no longer be considered an IT line item, as it is the entire company’s responsibility to raise revenue. Fortunately, cloud providers realize the dilemma facing organization, so they often provide their customers free access to basic cost management tools as part of a billing dashboard. In addition, third-party tools are available to manage and optimize the cloud environment. Such third-party tools tend to be more granular in the metrics they use and the information they provide to aid with cloud configuration, usage and cost control. In addition, many third-party tools work across cloud platforms, making it easier to manage multi-cloud environments. According to researchers at Anodot, native tools are those provided by the cloud platform providers, for example, AWS Cost & Usage Report, Billing Dashboard, and Cost Explorer from AWS; Azure Cost Management from Microsoft; and Cloud Console from Google. Other third-party tools, and even homegrown tools, often are part of the cloud cost management mix to gain more in-depth information or to measure costs across multiple cloud platforms. Containers have become essential building blocks for cloud infrastructure. Nearly three-quarters (73 percent) of IT leaders say they use container tools to build more cloud infrastructure. The promises of containers are shorter software development and release cycles, easier application upgrades and maintenance, better utilization of cloud resources, on-demand scale, and portability between clouds — all potential drivers of corporate revenue growth. At the same time, containers cost less than traditional virtual machines. However, a drawback of a container orchestration system such as Kubernetes is that it obscures an organization’s view into the true costs of each of its cloud services. What types of tools do you use to manage and optimize cloud usage? Source: Anodot ‘2022 State of Cloud Cost Report’ Employees with women managers are more likely to say that their manager has supported and helped them over the past ye r. Source: McKinsey & Co. 19 31 61 42 29 21 54 36 24 16 50% 38% 34% 27% 19% 68% Native tools Actions taken by managers to support employees, by manager’s gender, % of repondents Third-party solution that manages multi-cloud environments Multiple third-party solutions Built our own One third-party solution Men Women Men Women Men Women Men Women Men Women Checked in on overall well-being Povided emotional support percentage points Helped make sure workload was manageable Helped navigate work-life challenges Helped take actions to prevent or manage burnout +12 +7 +6 +5 +5 BUYERS SIDE 28 CHANNELV ISION | SEPTEMBER - OCTOBER 2022 ... cloud costs can no longer be considered an IT line item, as it is the entire company’s responsibility to raise revenue. (Story continues on pg 74)
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It’s no secret that managed services providers are among the most highly sought-after channel partners for vendors of all sorts of business IT and communications solutions. That’s particularly true among those providers looking for resellers that can go a bit deep into customers’ tech stacks and sell beyond the more transactional products. Certainly, MSPs in their traditional form have been part of technology indirect channels for at least two decades, even further if you trace them back to the days of the “application service provider” (ASP) model. But in order to keep pace with the complexities of today’s technology business landscape, the MSP model “is evolving rapidly,” said analysts at CompTIA, in the association’s 2022 report on trends within the managed services channel. The term MSP itself is increasingly less defined by one type of service provider, and with the acceleration of cloud and digitally delivered services, MSPs even are being advised to think and behave in ways that are more in line with the model of a traditional sales agency or cloud brokerage firm than an IT shop. Researchers at the Technology & Service Industry Association (TSIA), for example, report to seeing “a rapid separation of managed services providers into two classes, which we call 1.0 MSPs and 2.0 MSP.” By Martin Vilaboy CHANNEL MANAGEMENT THE MORPHING ‘MSP’ MODEL The recent burst in cloud-delivery changes what it means to resell managed services 30 CHANNELV ISION | SEPTEMBER - OCTOBER 2022
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