Welcome to the Hybrid World

Karl Palachuk

As we get ready for a successful 2016, it's a good time to look at some mega-trends in our business. It’s also a good time to examine some of the “common wisdom” we’ve heard in the past year and evaluate how much it should influence us going forward.

One rule of thumb you can count on is that any statement of absolutes is almost certainly wrong. (Did you notice how carefully I worded that?) For example:

Cloud First

  • If you don’t move to the cloud, your business will die
  • If you’re not 100% managed service, your business will die
  • Office 365 is the only option
  • If you’re still talking about Managed Services, you’ve already missed the boat
  • Everything is cloud; Managed Services is dead

Many evangelists have over-stated both the speed of adoption and the readiness of the cloud to fill our needs. In the meantime, physical servers keep chugging along, gigabit-Internet is not universal by a long shot, and practical solutions rule the day.

Managing-CloudI think the most powerful mega-trend in technology today is the hybrid reality. Hardware, software, and services are solidly divided between on-premise and cloud. And you can expect this reality to continue for another 5 to 10 years.

This trend is not due to old line of business applications or clients who don’t understand the cloud. Those things exist, but the mega-trend is driven by much more powerful forces: Businesses are spending money wisely, putting computer resources where they make the most sense, and maximizing their existing investment.

It starts with the existing investment. You can make a very strong argument that “the best” solution for a client is a 100% cloud-based storage with cloud backup. But if they’ve got a great server with a great onsite backup, does it really make sense to abandon that and instantly move everything to the cloud? In most cases, the answer is no.

It normally makes more sense to move services to the cloud one at a time. That way the client gets the highest value from their existing investment. And when you move some key services off the server, you actually extend its useful life.

For example, if you move Exchange to the cloud, you have a lot of excess computing capacity on that server. If you then move the backup off site, you extend the life of the server even more. After all, if its only functions are active directory logon and file storage, it’s basically a very powerful NAS (network area storage) unit.

The example above also represents the wise allocation of resources. Sometimes a local server is just the right decision. Whether it’s because the client has a lot of large files (such as CAD or graphics) or lots of users who would stress a network connection, there are lots of reasons for a fast local server. Eventually it gets backed up to the cloud. And maybe someday the Internet connection will be fast enough to eliminate on-site storage. But maybe that won’t happen. Maybe some clients will always want active directory and storage onsite.

This all boils down to the one skill small business owners excel at – spending money wisely.

Hybrid Managed Service / Hybrid Cloud Services

Hybrid-CloudI have enjoyed delivering tech support with a 100% managed service model for more than a decade. At the same time, I work with many consultants who are 50% to 90% “break fix” or “support on demand.” Many companies have never tried to adopt a total managed service model. After all, they’re making lots of money selling blocks of time. So they’ve added monitoring and patch management to blocks of time and they’re making more money than ever.

Those kinds of very practical decisions define the current SMB (small and medium business) environment. So no one should feel like they’re left out or “behind the curve” if they haven’t adopted a 100% managed service model. In fact, it makes you wonder about those pundits.

Our channel is about to grow very quickly as a series of service niches start merging together. The Internet of Things and the future of connected devices will be built almost entirely on IPv6 for one simple reason: As of last November, we are officially out of IPv4 addresses. So any business that needs to deploy thousands (or tens of thousands) of devices will have to use the wide open IPv6 address space.

At the same time, industries that are moving to TCP/IP will start merging into the general SMB consulting space. That means we’ll be selling signage, VOIP, security, cameras, point of sale, and business machines AND all the people who started with those technologies will move toward managed service offerings.

Interestingly enough, I’m not sure we have a good name for the technology world that will dominate the next 10 years. It’s certainly not post-managed services. It’s not post-on-premise. It’s not 100% cloud. It’s not even based primarily in IT infrastructure. It truly will be a hybrid of all the options at once.

And as usual, you have three simple options for guiding your business in the next five or 10 years. You can be on the leading edge and make money by forging straight ahead and blazing the trail; you can wait for the bubble in the middle of the trend and ride it from the “new” stage to the commodity stage; or you can wait until all the risky work is done and make money in the commodity market as the next trend is emerging.

Only you can decide which strategy is best for your company. I think the hardest part about running an IT consulting business in the next 10 years will be deciding which opportunities you want to focus on. The good news is that opportunities will continue to multiply for the whole decade ahead of us. You just have to figure out how you’re going to get your share of the business.