Kyndryl, in its first year as an IBM spinoff, cemented strategic partnerships with all three of the big cloud service providers — AWS, Google Cloud and Microsoft.
On Tuesday, the IT infrastructure service provider formalized its role as a hybrid cloud MSP, announcing the creation of Kyndryl Consult, a business aimed at helping enterprises integrate and manage cloud-based and on-prem IT estates.
Those strategic partnerships aren’t just pieces of paper. They come with mutually beneficial benchmarks that incentivize both parties to generate a certain amount of revenue.
Kyndryl’s role in the relationship is to ease some of the inherent friction and uncertainty in implementing hybrid cloud, reducing the likelihood of unsuccessful deployments and unhappy customers.
MSP partnerships are a feature of the hybrid cloud landscape. Companies need guidance to coordinate complex deployments and tools to make seemingly siloed applications and data streams interoperable.
That’s not part of the current hyperscaler business model, which has created a growing space for MSPs to operate.
Spending on managed services for both cloud and on-prem infrastructure is expected to win a larger share of overall spending in 2023 IT budgets, accounting for 18% up from 15% this year, according to Spiceworks Ziff Davis’ annual survey.
The trend is reflected in the number of active partnerships between CSPs and MSPs. In North America alone, AWS currently partners with 50 MSPs, including Accenture, IBM and Infosys. Google has 36, and Microsoft lists nearly 70.
“What makes a partnership successful is they’ve got a cloud, and cloud does a lot of things,” said Harish Grama, Kyndryl’s global cloud practice leader, “but it’s also very complex.”
That complexity shows up in the form of unsuccessful deployments.
Nearly one-third of technology decision-makers surveyed in a 2021 Gartner report said their organization had suffered a cloud deployment failure in the last three years.
Reasons for these failures range from integration problems and poor choice of provider to inaccurate cost estimates and unexpected cost increases.
Deployment decisions
There are upfront questions that must be answered before a successful deployment, said Grama, who was managing director and CIO of cloud services at JPMorgan Chase from 2016-2018.
A bank has thousands of applications to manage — “a huge application estate,” Grama said.
The CIO has to figure out which ones to retire, which ones to lift and shift, and which ones to rewrite completely.
“That piece of work happens well before you even move your app,” Grama said. “If you do that piece wrong, then that error compounds as you get into the implementation phase.”
Banks are far from the only enterprises that stand to benefit from an MSP intervention. Nearly two-thirds of cloud buyers surveyed by Gartner reported their organizations work with MSPs or other outsourcing providers to implement and manage cloud.
MSPs provide valuable expertise in planning, design, implementation, migration, app modernization and support services, according to Sid Nag, VP analyst at Gartner.
“MSPs also provide the ability to address the technical debt that many organizations have today [and] skills shortages,” Nag said.
The CSPs have their own managed service offerings, but they benefit from the ability of third-party providers to integrate public cloud with on-prem systems and tailor solutions for individual clients.
“When you go to the hyperscalers and you tell them to do something bespoke, it's not their business model,” Grama said.
The hyperscalers are leaning on companies like Kyndryl to help clients implement cloud, Nag said.
“Who would you trust to do your managed services, a hyperscaler or a non-aligned MSP?,” Nag asked. “Especially in a multicloud world.”
Hybrid cloud realities
Some companies may have the resources to manage their application estate, including security, data integration and automation capabilities, in a multicloud ecosystem.
The sheer size of the cloud MSP market, forecast by Gartner to top $100 billion by 2025, indicates that companies are turning to companies like Kyndryl to manage the complexity of hybrid environments that may include two or more public cloud providers.
“If you've got this complex, sprawling application estate across on-prem and multiple clouds,” Grama said, “Clouds are going to spit out a zillion messages at you and you're not going to know what to make of it.”
Hyperscalers are building tools to enable migration to their cloud and facilitate operations in their ecosystem, according to Nag. “But they are not doing the service piece themselves,” he said.
When that service piece involves integrating public cloud with on-prem, an MSP with mainframe and cloud experience may be better situated than a pure cloud provider.
“Cloud service providers have their hardware, their infrastructure as a service, their platform as a service, and so on,” Grama said. “But at the end of the day, every one of them knows that the world isn't just going to switch to public cloud entirely.
For now, at least, it’s a hybrid world — one in which the hyperscalers are happy to partner with MSPs to encourage cloud consumption.
