IT and Business Insights for SMB Solution Providers

Cloud or Bust

RedNight Consulting is all-in as a cloud service provider, and with the current signposts, is encouraging clients to make the leap to public cloud with bundled premium services. By Chris Ploessel
Reader ROI: 
Just selling cloud products is not a profitable business model. You need to create your own IP.

Rednight Consulting launched as a cloud service provider (CSP) and consultancy with a “burn the boats” mentality. There is no Plan B.

That’s how strongly I believe in the trend toward the adoption of public cloud infrastructure. Private companies are no longer owning and managing their own infrastructure and public cloud providers have become very reliable. We believe there is a strong market for an MSP offering around cloud.

It’s a trend I could see coming, first in the late 1990s when I was a CIO for a large mortgage company that was an early adopter of virtual servers and virtual desktops, and then as a consultant with an MSP that offered private cloud and desktop as a service (DaaS). Although private cloud was going gangbusters, the transition to public cloud had started, and from 2013 to 2015 it really ramped up with AWS, Microsoft Azure, and even IBM. Meanwhile, it was taking a lot of work to maintain private cloud offerings. You need engineers, data centers, and 24/7 support. I seized the opportunity to start my own company around public cloud infrastructure.

It’s a misconception (sometimes propagated by resellers) that you can’t receive white-glove service to help with migration to a public infrastructure. That’s exactly what is occurring with the rise of cloud brokers and CSPs. We’re advocating for our customers, we know the public providers’ capabilities, and we come up with a strategy for their business along with a project plan. Then we help with the migration and provide managed services on top of that.

I started with Amazon Web Services. Amazon was huge and there was a lot of momentum and innovation around AWS, so I was all-in. I went to re:Invent, Amazon’s IT cloud conference, got certified, and started experimenting. It’s a good, solid platform; easy to use; and the console and tools are much easier to use compared with a private cloud. Furthermore, I believe VDI (virtual desktop infrastructure) is the future. Our strategy is to educate midsize businesses around virtual desktops, and Amazon has a neat offering called WorkSpaces. I now have half a dozen customers onboarded, with processes in place, and I’m starting to diversify, because Microsoft and Google are right on Amazon’s heels. What’s exciting to me is Microsoft’s partner network; partners are its salesforce, whereas Amazon does sales directly.

The Secret Sauce
Just selling cloud products is not a profitable business model. You need to create your own IP. My vision is to do a couple of things differently. First, bundling MSP services is key. We’re doing migrations for a fixed fee, but providing managed services with an unlimited support package. On top of the customer’s cloud usage we have a premium markup that covers that support—backup, tech support, patching, updating, and monitoring. If we’re doing our job, there shouldn’t be a lot of help desk calls. It’s similar to the insurance model. You have a pool of money coming in, and if somebody crashes, you’ve got to spend money to get the customer’s vehicle fixed, but your customers are not all going to have problems at the same time.

Second, we’ve created our own software bundles. We bundle Office 365, Exchange Online, anti-virus, MDM, backup, and unlimited tech support. This is the user side of things.

We tell our customers there are two pathways or phases to cloud. The one we’re passionate about is “lift and shift”—move what you have to cloud, then work on consolidating and optimizing. The initial move to the cloud is not about saving money; it’s about reliability and expansion. The second pathway is to reconfigure your applications to be cloud native and optimized for the cloud provider’s APIs. This is where the cost savings come in.

When we talk to prospective customers we survey them like a traditional MSP—we look at their infrastructure, core business applications, locations, people—all through a moving-to-cloud lens.

Some customers want to stay on premises, so we refer them to another local provider. We are only supporting very minimal on-premises infrastructure. For example, we will handle a branch office with a firewall for a customer, but we try to keep our hands out of larger projects.

The hardest thing I’ve had to do is turn away business, especially as a startup. I’ve come across opportunities for a big on-premises deal multiple times, but I’ve turned it down. If I start going in that direction, I’m going the wrong way. We won’t take a deal that doesn’t at least have a component of cloud, and this focus has helped us ramp up more quickly. I tell customers that when they’re ready for cloud to come back to us and one already has. It’s the right thing to do for us and for them. We’re sticking to Plan A.

Chris Ploessel
President
RedNight Consulting

FOUNDED 2015

LOCATION Aliso Viejo, Calif.

NUMBER OF EMPLOYEES 4

WEBSITE www.rednightconsulting.com

COMPANY FOCUS RedNight Consulting provides guidance and migration leadership to SMBs considering a transition to the cloud or between cloud providers.

FAVORITE PART OF MY JOB I enjoy the early discovery and trying out new products, so I can bring innovative solutions to customers to help them optimize their businesses.

LEAST FAVORITE PART Being on call 24/7 until we are able to add more staff

WHAT PEOPLE WOULD BE SURPRISED TO KNOW ABOUT ME I climbed Mount Kilimanjaro.

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