Skip to main content

Cloud migration is a game-changer, particularly for growing enterprises struggling to develop top-tier infrastructure independently. Opting for a managed cloud service provider is a strategic move, offering smaller businesses the benefits of economies of scale in data storage, access to premium hardware, advanced software, and cutting-edge security and networking solutions. These packages typically include comprehensive backup and recovery services, along with exceptional tech support to tackle any hiccups.

Despite its clear advantages, managed cloud services seem like uncharted territory for many CTOs. In this guide, we'll break down everything you need to know: the essentials of cloud services, their pivotal role in contemporary tech infrastructure, the critical components of cloud technology, and the criteria for choosing an effective cloud service provider (CSP).

What Are Managed Cloud Services?

Managed cloud services are a curated approach to IT that see your tech needs outsourced to a cloud service provider that handles the more onerous tasks for you. CSPs provide daily management of network services, advanced data migration and management tools, AI and machine learning applications, and the expertise of multiple third parties in security and other niche areas.

Choosing managed cloud services comes with a host of compelling reasons, with cost savings often topping the list. For many companies, it's more economical to partner with a dedicated CSP that's already invested heavily in data centers and network services. Another major perk is access to top-tier professionals who manage coding and optimization. This means you don't need to recruit an expensive in-house IT team to do everything on-premises. Managed solutions operate seamlessly in the background. Think of it like a multi-talented chauffeur who doubles as a mechanic, tour guide, and personal chef, delivering a comprehensive suite of services for a fixed monthly price.

Key Players in Managed Cloud Services

The landscape of managed cloud services is dominated by a few major players, with a significant portion of the market dominated by Amazon Web Services (AWS), Microsoft Azure, and Google Cloud. These three giants collectively command 65% of the market, underscoring their influence and reach in the cloud services arena. AWS is particularly dominant, holding a substantial 32% share of the SaaS and managed cloud services market. Microsoft Azure follows closely at 22%..

Beyond these top three, the market sees a more fragmented distribution. Alibaba, IBM Cloud, Salesforce, Oracle, and Tencent Cloud collectively hold less than 15% of the market, each offering unique strengths and specialized services. For instance, Alibaba Cloud has a strong presence in Asia and is expanding globally, while IBM Cloud is known for its enterprise-focused solutions and strong data and AI capabilities.

Salesforce, primarily known for its customer relationship management (CRM) software, also plays a significant role in the cloud services market, particularly in the SaaS segment. Oracle, with its strong database and enterprise software background, offers cloud services that are deeply integrated with its software products. Tencent Cloud, part of the Chinese tech giant Tencent, is expanding its cloud services globally, leveraging its massive infrastructure and innovation in gaming and social media.

In addition to these major players, the market also includes smaller, more specialized companies like California-based Ayera Technologies. These niche providers offer custom solutions and cater to specific market segments or industries. They often provide more personalized services and can be more agile in responding to specific customer needs.

What Is The Role Of Managed Cloud Services In Modern Tech Infrastructure?

There's a big difference between modern managed cloud services and the IT you might be familiar with. By moving tech out of your office and into the cloud, you're immediately punching above your weight with things like security, scalability, and overall flexibility. Cloud services are a game-changer for overburdened CTOs. Here are some of the areas where you'll notice the biggest differences.

Digital Transformation

Managed cloud services are not just a component of modern tech infrastructure; they are a catalyst and enabler of digital transformation, providing the tools, flexibility, security, and scalability necessary for businesses to thrive in the digital age.

Gone are the days when adopting new business applications meant investing heavily in training IT staff or when emerging security threats necessitated costly retraining, seminars, and software upgrades. Not to mention the potential need to phase out recently acquired hardware.

The latest apps are readily accessible on the cloud, allowing you to seamlessly integrate them into your operations. Moreover, the security landscape is vigilantly monitored by experts that are proactively identifying and neutralizing threats long before they pose a risk to your network. This level of security expertise and responsiveness is a significant relief, especially for organizations without the resources to maintain such extensive in-house security operations.

Additionally, the hardware infrastructure underpinning these cloud services is typically state-of-the-art, offering performance and reliability that would be challenging and costly to replicate in a private data center.

Discover how to deliver better software and systems in rapidly scaling environments.

Discover how to deliver better software and systems in rapidly scaling environments.

  • By submitting this form you agree to receive our newsletter and occasional emails related to the CTO. You can unsubscribe at anytime. For more details, review our Privacy Policy. We're protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
  • This field is for validation purposes and should be left unchanged.

Scalability and Flexibility

With traditional IT infrastructure, scaling up often means significant investments in physical space, hardware, and additional IT staff. This expansion isn't just costly in terms of resources and energy but also risky. If the market takes a downturn, you're left with excess capacity and the tough decision of downsizing.

Managed cloud services addresses the scalability challenge. Whether your business is inching forward or skyrocketing, managed cloud services adapt seamlessly to your pace. Scaling up? A simple request can unlock additional resources in no time. Experiencing a seasonal dip? Scale down just as easily without the burden of excess infrastructure or idle staff.

Your business remains agile and responsive to market demands, free from the constraints of traditional IT infrastructure. It's about having the flexibility to grow or adapt at a moment's notice, ensuring that your enterprise is always poised for success, regardless of the market's ebbs and flows.

Innovative Solutions

Transitioning to the cloud doesn't mean you'll significantly reduce your IT team. Instead, it's about maximizing their potential. Managed cloud services handle the routine maintenance and operational tasks, liberating your in-house IT staff to focus almost entirely on innovation and development. Imagine shifting the dynamic from your tech team spending the majority of their time on server maintenance to dedicating themselves to creative problem-solving and rolling out new products. A cloud-centric approach allows your IT personnel to concentrate on driving forward tech solutions, while the experts at your cloud service provider manage the day-to-day technical operations.

Enhanced Security

There's another major upside to managed cloud networks, which is the massive boost to your security and regulatory compliance. For businesses operating at scale, maintaining a positive relationship with government regulators is crucial, particularly in sectors like finance, insurance, health, and other sensitive areas. These regulators expect robust network security and stringent data protection measures. 

Opting for a managed cloud service means accessing top-tier security solutions. These services, provided by major cloud providers, offer premier protection that would otherwise price most companies out of the market.

What Are The Key Components Of Managed Cloud Services?

You stand to get a lot out of managed cloud services, and the nice thing is that for many services you can pick and choose what you like and only pay for what you need. Here are some of the most important elements in a typical cloud provider:

  • Infrastructure Management: This is the acquisition, upgrades, modernization, maintenance, and operation of virtual servers and other hardware, such as routers, power supplies, and even environmental services such as fire suppression. It's also storage, backup, and disaster recovery. Infrastructure includes the nuts and bolts of your networking, including the forest of cables and wireless equipment, along with the staff to manage them. 
  • Security and Compliance: Your data is an asset, and you need high-quality data security tools like encryption, access controls, and loss prevention, to keep it safe. You have to comply with regulatory standards and reporting requirements, along with reliable threat monitoring and rapid response to new threats.
  • Performance Optimization: Managed cloud teams regularly review and adjust resources to keep up with changing usage patterns and trim the waste with advanced analytics and even some early machine learning approaches. 
  • Service Management: A managed cloud service can also save you trouble by offering a portfolio you can easily mix and match to meet your needs really well, which is more flexible than an on-premises approach you'd get with an in-house IT. You can also speed up rollouts of new products via the more flexible cloud architecture.
  • Support and Maintenance: Tech support is a huge expense for a lot of businesses, but good CSPs have 24/7 support and software maintenance, such as patch development and regular updates.
  • Governance and Reporting: On-premises IT workers shouldn't have to invest as much time as they do in documentation and reporting, but when you're on your own there's really no choice. Moving to the cloud lifts that burden, and it may even give you better and more transparent reporting overall.
  • Strategic Services: The teams who run your managed services are often highly skilled and full of good ideas. You can lean on them to help out with innovation and developing new applications to help you expand.

Implementing Managed Cloud Services In Your Organization

Making the switch to managed cloud services is a big step, and it matters if you can do it right. Here are some tips for pulling off the transition as smoothly as possible.

Steps for Successful Implementation

  1. Assessment and Planning: Step one is to take stock of what you're already working with and develop a picture of your infrastructure, workloads, and business needs.
  2. Migration Strategy: Use your picture of the inventory to develop a strategy for how to move over and what kind of timeline you're comfortable with. Outline in writing your benchmarks + technical and business goals. 
  3. Skill Alignment: Take the time to align your team's skills with the demands the transition is likely to bring. Extra training and even outsourced temp workers can be worth the investment here. Identify existing gaps in your in-house certifications and take the steps needed to get everyone up to speed before the move.
  4. Process Integration: As the transition begins, you're going to want to integrate the new processes with your current and ongoing needs. This is a moving target, so it can be helpful to keep up a schedule of regular assessment and policy changes to keep up to speed.

Common Challenges to Implementation

  • Resistance to Change: There's a natural conservatism to any organization, and your own enterprise is probably not exempt. Try getting the key stakeholders together to discuss upcoming changes before they're made, if only to reduce the strain on teams during a trying time.
  • Security and Privacy Concerns: Security is not negotiable during your transition to managed cloud services. At every stage, make security processes a key part of your planning, and err on the side of extra security tools rather than leaving gaps in your coverage.
  • Downtime and Service Disruptions: No matter how careful you are, sudden downtime is a real probability. Instead of just hoping for the best, develop a plan in advance with your provider and schedule planned cloud migrations during low-traffic periods to keep the risk as low as possible.

Best Practices for Maximizing Benefits

Continuous Optimization: Optimization is a process, not a goal. Schedule regular reviews and analysis of usage data to make sure your cloud service is optimizing resource allocation and keeping costs down. 

Strategic Partnerships: Your service provider is a partner in this transition, and it pays to treat them like a teammate. Schedule regular meetings with their teams to explore opportunities the transition creates for you. 

Leveraging Scalability and Flexibility: You can use the slack space that opens up during the transition to explore new applications and work processes. Adopting new cloud architecture gives you a rare free hand to explore new ways of networking and might open up whole new pathways to continued growth in the product life cycle.

Case Studies: Success Stories From The SaaS World

SEMRush Significantly Reduced Cancellations

SEMRush has been a successful digital marketing provider working on a SaaS model since its inception in 2008. Like many subscription-based services, the company's success depended on having a large number of ongoing customer accounts. 

The company's marketing director came up with an idea to leverage the company's managed services model to cut down on cancellations. SEMRush removed the cancel service button on its website, replacing it with a contact support button. Support tickets could be efficiently (read: cheaply) handled by the managed services team taking cloud tickets. That one move cut down cancellation requests by 10%, preserving SEMRush's position and keeping revenue strong.

Capital One Streamlined Risk Assessment

Capital One is an extremely large provider of sophisticated financial services, which means very tight regulation, security, and disclosure requirements for company data. From 2015-18, the bank moved all-in on public cloud infrastructure for basically every process. As part of the plan, Capital One started working on AI and machine learning algorithms its CSP offered into its risk assessments. 

As a result, new products roll out much faster than they used to, risk decisions are made more quickly than before, and the cost of documentation and reporting is as low as it has ever been. 

Lessons Learned And Best Practices

Managed cloud services are unmistakably the direction of the future, proven by a growing number of enterprises are making the shift.

Also undeniable is the value that automation and other cloud resources bring to DevOps. Their impact is so substantial that operating without them puts you at a competitive disadvantage. Even modest cloud platforms offer such significant enhancements that the future of IT teams seems destined to blend in-house innovation with the operational support of a trusted CSP.

Finally, adopting managed cloud services doesn't require an all-or-nothing approach. You can start small, adjusting your service level to match your business needs, scaling up or down as required. This flexibility, combined with the low barrier to entry, positions managed cloud services as a strategy with minimal risk and high potential rewards. It's an opportunity well worth exploring.

What Does The Future Hold For Managed Cloud Services In SaaS?

It's always risky to predict the future. But recent trends lean toward greater specialization and increasingly powerful tools for smaller players that used to be confined to companies with huge investments in IT.

Future cloud environments are set to democratize the digital landscape, enabling smaller enterprises to leverage managed cloud services to compete on par with industry giants.

Did you learn something surprising about managed cloud services from this article? To keep adding value to your enterprise, sign up for The CTO Club newsletter to stay on top of the latest developments.

FAQs: Enhancing Your Knowledge of Managed Cloud Services

What Are the Most Common Misconceptions About Managed Cloud Services?

A lot of CTOs think a cloud migration will be a huge disruption that they might regret later on. That’s not the case. The relative ease of getting started, combined with the current diversity of offerings, make this a fairly upside-heavy approach to data management.

How Do Managed Cloud Services Contribute to Innovation in SaaS?

One of the best things about managed cloud services is how it frees up your IT teams to invest more in innovation and less in daily housekeeping tasks. Instead of grinding all day to keep the existing systems working, your tech team can focus on rolling out new products and breaking new ground.

What Are the Best Practices for Managing Costs with Managed Cloud Services?

As positive as this shift can be, you want to keep costs down. Start by only buying into the services you need, with the idea of expanding later. Consider going large with major cloud providers who can offer discounts or freebies to induce new customers to sign on.

Katie Sanders
By Katie Sanders

As a data-driven content strategist, editor, writer, and community steward, Katie helps technical leaders win at work. Her 14 years of experience in the tech space makes her well-rounded to provide technical audiences with expert insights and practical advice through Q&As, Thought Leadership, Ebooks, etc.