SM: So, tell me more. Here’s an interesting set of discussions that came out of my conversation with Jared, which [included] looking at the next decade. In the current scenario, his point of view is that there is about 60% of IT work, which is commodity work done in maintenance, backups, all sorts of IT activities that should be and could be automated but are not automated necessarily. Tier 3 is trying to automate all of these things, and they’re forecasting that over this coming decade, this 60% of IT work that is currently in the routine, boring, resource-intensive but automatable functions can be moved to the cloud.
JG: Right. I definitely agree with that statement and approach. We have a slightly different focus from that, but I certainly understand what he is saying.
SM: What is different in how you’re thinking about it and how you’re doing things?
JG: The opportunity that we see is as the world moves to the cloud, there are service providers who are looking for new revenue opportunities. Many of them are going to want to become managed service providers, in addition to just being service providers. What we want to do is work with them and help them create the right type of environment where they can be successful and we can help them be successful. So, our target audience is not so much the end client but the intermediary.
SM: So, you are looking to service the managed service providers, is that an accurate statement?
SM: I’m completely with you that managed services is becoming a significant delivery model for cloud computing and for IT in general. Whether it’s public cloud applications or security as a service, in some cases, we’re seeing both software as a service and business process outsourcing all combined into one managed service. Perhaps the best example of that is public health care IT company in Boston that is going like gangbusters called AthenaHealth. So, what are the unique needs of the managed service providers that you are experiencing, that are unique? How do see that evolving as we go along?
JG: Well, the market that we believe exists is that many managed service providers are not mature businesses or they’re service providers trying to become managed service providers. So, they don’t have the infrastructure. They don’t have the technical wherewithal. What we’re trying to do is position ourselves as their eyes and brains, I guess, where we can offer a superior level of service than what they could achieve themselves.
SM: What format does your positioning take? Do you create the services and white label it for them, or do you help them set it up? You provide consulting and services to set them up as sophisticated managed service providers?
JG: We want to tie into whatever they’re using, provide support, and then offer them our experience, our knowledge. It’s not so much a case where we want to be their representative. We want to be their support, so to speak, when they do not have the capability to deliver it themselves.
SM: Okay. So, let’s take a look at the hierarchy or market landscape of the managed service providers. On the one end of the spectrum, we have IBM that is a very, very good managed service provider. The IBM competitors on that front, the major outsourcing players, the Accentures of the world and even the Infosys, Wipro, data consulting services, all of these outsourcing providers are actually turning into managed service providers. So, I presume that IBM is not looking to you to help them set up their managed services. Are the others looking to [a company like Stratus] to set up the managed services?
JG: I can only think of two cases – on the immediate horizon – where an enterprise is speaking with Stratus about being their managed service provider. Our focus is more in the SMB market, mostly mid-sized companies, 1,000 people or less.
SM: But you told me you are powering the managed service providers. So, you’re saying that you’re not working with the large managed service providers; you’re working with the mid-sized managed service providers that service the mid-sized companies of 1,000 employees or less?
JG: Correct. Yes.
SM: Okay, got it.
JG: Our target could be an MSP that maybe has 50 people or 100 people, and then [that MSP] manages a certain number of clients. We would work with [that company] to help it offer that support to its customers.