Whether spinning up a website or building an app, getting started with the cloud is easier than ever. Most businesses, regardless of size, can do it on their own. But as companies scale operations and become reliant on the cloud, support from their provider becomes essential, Structure Research analyst Phil Shih says.
Support doesn’t come easily, though, especially for SMBs. Customer service from some of the biggest players can be so costly that it prices small companies out of an essential lifeline. And there’s also a serious skills gap in IT, which means that businesses simply might not have the in-house experience required for getting more out of the cloud. In other words, SMBs have no other option but to pay up or bow out of expanding their cloud usage.
Yet between bots, long wait times, and tiered customer service, the experience that businesses do pay for isn’t exactly a positive one. But there is good news: As competition in the market increases, support is becoming an opportunity for providers to differentiate themselves by developing different models in terms of both service and price. Listen to my full conversation with Phil below. He discusses some of the biggest frustrations he hears from companies about support and offers his advice for choosing the right provider based on specific support needs.
The following transcript has been slightly edited.
Mike Maney: As cloud complexity grows, so does the skills gap. And with lacking internal talent companies, especially small ones, are finding it increasingly challenging to handle cloud deployments and management on their own. They need support. But it’s far from affordable. Players like AWS, Google and Microsoft charge top dollar for even basic support, often making customers face long wait times, followed by conversations with experienced agents that ping pong them across tiers of representatives. In this conversation with Structure’s, Phil Shih, we’ll discuss key support challenges, as well as viable solutions, including alternative providers, managed services, and more. Welcome again, Phil.
Hey, nice to be back.
So affordable cloud support is increasingly essential, especially given the growing skills gap. There’s some of the stats that we’ve seen, the number of unfilled cloud computing jobs has increased by something like 94%. Since 2017, as businesses big and small try to attract scarce engineers, that talent pool just keeps shrinking. And that skills gap is expected to grow by 36% over the next five years.
So we’re going to continue to see this talent shortage grow in cloud especially among vulnerable SMBs. Their teams are small. So with companies pressed for resources, they have neither the time or talent to devote to cloud support, yet they often have no choice. So what are you noticing about the state of cloud support today? As cloud gets more complex, are providers giving users especially SMB? the help they need?
It’s a great topic and it’s critical. These days, just because, as you mentioned, this gap, just continues to get bigger, right? I mean, the pace of growth. And the pace of innovation moves significantly faster than the ability of organizations, service providers into individual end users to skill up on this stuff. It’s hard enough to skill up on it, it’s even harder to keep up on the pace of innovation that some of these big platforms are able to turn out. You see their product release roadmaps, and how many features they can put out in a three month timeframe, it’s substantial.
And it’s very tough to keep up, I think the other side of the coin is that support is expensive to deliver to a customer. It’s more difficult, it’s costly, it requires human beings, rather than robots and code. It is difficult to scale, as fast as you can scale, software, automation, and infrastructure. And so there’s just inherently going to be a lag, given those conditions, given that context.
And so with the pace of growth accelerated by the current environment, it’s getting worse. I hate to be the bearer of bad news, but that gap keeps growing, and it’s getting tougher on users and tougher on organizations to keep up. Depending on the size of organization you’re talking about, they’re faced with various challenges. Somewhere in the middle to larger part of the market, you can always use a consultant managed service provider, or some type of service provider, third party independent, that has scaled up the expertise and can deliver it to you to an organization as a service.
But for the lower part of the market, when you get mid down to small business where resources are scarce, the availability of support is just not keeping up with the requirements. Customers are kind of in a tough spot. And I think that’s where we find ourselves today, when it comes to small businesses trying to use the public cloud. It’s a great concept, scale and efficiency is delivered at a great price point. But you have to be able to keep up with it. And the way these clouds deliver support just is not necessarily suitable to everybody.
So that begs the question—and I think you’re leading there—are small businesses especially prone to this?
Absolutely. Just because, like you said, lack of resources, the inability to keep up, and that knowledge gap. It’s getting to the point where we could turn to that really tech savvy friend or you know, Cloud Guy. But that can only last so long, right? Maybe you can’t get away with that anymore. The more things you’re doing online, the more tools get complicated, the services get more sophisticated. It just becomes more of a challenge. And sometimes there’s no real solution.
I don’t think AWS and these guys are gonna all of a sudden open up a 24/7 365 support queue with people picking up the phone right away and saying, Hello, how are you? How can I help? I don’t think that’s happening very soon.
Right. I think that’s the other part, right? The price isn’t right. Neither is the experience sometimes, because the high cost of support can be prohibitive to small businesses. And then there are the other problems that come along too. Robot responses, and long wait times. The biggest one for a lot of people are tiered support structures that play ping pong with callers. Google’s premium support, which is designed especially for SMBs, costs something like a minimum of 12,000 US dollars a month. AWS support can run up to $15,000 a month, depending on the number of instances that users run.
Yeah, and those bots are tough to deal with. Technology has progressed, but I’ve tested them out, and I find them to be decent at answering the most generic questions. And then usually, when you get to something that a machine can’t handle, it’s like, ‘okay, hold on, sir, I will pass you along to another tier.’ Or ‘please read this user guide’. The younger generation, and people who are tech savvy can handle that. But that’s not everybody.
Reading through some pretty detailed user guides and following step by step. What if you do it wrong? Then what, then you have to revert back? You talk to the robot again? It just gets really frustrating. So that’s just another layer of difficulty and challenge.
Yeah. And let’s face it, when people are reaching out to support, whether it’s through a bot or through anything else, they’re not reaching out at the best time, right? They’re usually, you know, last resort, like, I’m struggling here. How do I do this? And want you want answers. There has to be a little bit of humanity to it.
Yep, it’s usually they’re calling in when they’re having something’s gone wrong. Or they don’t know how to do something.
I heard Linode is done hiring out of the retail sector for support. And talking to Rick Meyers, the head of support, I asked him why. And he goes, because I can teach people how to do technology. Here’s what you can’t teach people: How to be human and empathetic to people at their worst moment. And how to interact with people. So that’s a differentiator in a lot of cases, whether we’re talking about cloud or any other engagement, where we’re interacting with humans.
Yeah, and that’s just the thing. I guess the last point, before we move topics is that it’s just not within these big public clouds, business model, and operating structure to scale this kind of personalized support, or to scale a lot of human beings. We have service providers out there that have done that at quite a bit of scale, like Rackspace.
But you’re not going to see the public clouds do that. It’s never been their go to strategy. They pretty much have bet on the ecosystem, right? To help them out. They’re going to continue to build to scale and the infrastructure to make it is cost effective, and it’s feature-rich and innovative as possible, and let the ecosystem come in and handle the customer engagements. And there’s always gonna be that separation.
I always argue in the research we present that you got to think in terms of platforms. And you got to think in terms of service providers. There’s a very clear divide on one side and AWS, Google Microsoft here, they pretty much lie on one side, and the platform side and the service provider side, they don’t rely on third parties and partners. Not the worst thing, just different.
It’s often the first thing that gets cut when budget time comes around, or IPOs happen, or somebody is gearing up for their next funding round. It’s typically the easiest and first on the chopping block. So why is cloud support so expensive these days? Why isn’t it just baked into the cost of cloud?
You’ve touched on it with some of the experiences at Linode. It’s just tough to teach. Right? It can be hard to find the right people. And of course, humans cost more than machines. They are less repeatable. They’re not going to always be there. They may move on to another job, they may leave a job to have a family. The machine is always there. But a person has various different challenges. Once you translate that into the business context, I think, what you have is something that’s significantly more expensive, significantly more difficult to manage, and, of course, to scale.
And so then you have the growth in cloud, the increased volume of usage, and then the sophistication and the innovation, just moving in one direction. And we know which direction that is. So I think if you put that all together in the pot and mix it all up, you’ve got a pretty challenging situation that can only make this support something that isn’t going to get any easier or cheaper. It’s actually something that’s going to get more difficult and challenging.
It’s going to be the good side, for the people operating it, that when you have a challenge like this, there’s going to be certain solutions. And there’ll be winners who find a way around this. It’s certainly not insurmountable. I think that’s where the differentiation opportunity comes.
What are some of the challenges that users experience? I’m thinking primarily SMBs that don’t hit the spending level of real personalized support? What are some of the frustrations that arise?
The biggest ones are maximizing the usage and being able to scale and grow. It’s gotten to the point where it’s pretty easy to get online, get onto the cloud, start running content, a website, an application, and conducting e-commerce.
There’s so many tools now to make that possible. But once you’re there, the next step is to kind of get more efficient, optimize, maximize what you’re doing, whether that’s eyeballs or sales. And then scaling, increasing that capacity, whether that means setting up more infrastructure, whether that means adding different types of capabilities and services that are at your disposal that you don’t really understand. Setting up backup, failing over to another location—I find that that’s the biggest challenge is that somebody’s taking that next step with infrastructure.
Whatever you’re doing online, improving it, optimizing it, taking that next step, and doing something even more innovative with the technology to enhance the business or information and content that’s running on it. That’s really where I think the challenge has been for organizations. Small businesses just don’t quite have that knowledge.
Certainly the provider they’re working with has great information. They send out emails, they might occasionally call you. They got user guides, but the typical small businesses, the business owner or small group of people are probably pretty busy, are not necessarily tech savvy, and just don’t know what to do with all that information.
So it’s a challenge to get them to consume it, and then to understand it, and then of course, act on it. And so that’s the main stumbling block I see. I think it’s been around for a while. I think it’s only going to remain a challenge and get more multifaceted.
I wonder how much of the decision making process goes into support. If you’re an SMB, how important is support to you versus if you are a large enterprise? How important is having that human support to you?
That’s a really good question. Everybody needs support. No matter if you’re a 10 person, business or 1000, that human element is helpful and useful and desirable.
I’m thinking if I’m an SMB and my dad owned a small photo studio when I was growing up and I wonder—did he default to an AWS because that’s where everybody goes and then have to deal with going it alone and struggling to find answers? Or, look for a better fit, that might not have all the bells and whistles as AWS, but support that’s going to handhold them a little bit better? I’m thinking like a Linode. And I’m not trying to compare the two directly there, but it just feels like for an SMB, that’s a pretty significant decision that an SMB would make or a consideration they would have.
Absolutely, I would agree. The SMB has to be pretty careful about that. And usually the purchasing experience can dictate and bring that out. So if a purchasing experience is relatively easy, and might involve some people, then that gives them the comfort to go ahead and buy that service.
A typical small business might try to run on a public cloud, and may find that experience pretty challenging. Like, hey, I have to do this myself. I have to read the user guide, etc. Maybe I have someone on the team that can do that? Or maybe I don’t? And then they just might just say, Oh, wait, this service is not for me, I need to go look for something else. An independent provider or a more user friendly provider, or SMB friendly provider. It can start that process, the research and the procurement process. You might see people just saying, okay, that’s not going to work for me. I do need a different kind of experience or a different type of interaction. And that’s why I’m going to choose something else.
On the enterprise side, with more resources, more capabilities, more familiarity, it’s probably a different kind of path. They’ll have the ability to make that request. IT leaders can say, ‘Listen, I want this, this and this. I want a certain level of support experience. If not, go get me a third party MSP to help me manage it.’ Different trajectories, different pathways. But I would agree with the argument that on the SMB side, you can quickly hit that wall and say, ‘hey, I need something that’s just more support friendly, and it can come out in the research process or the procurement process.”
The Linode approach to this, there’s sort of a collaborative model to support where the agent picks up the phone, a human agent picks up the phone, and then sees it through the resolution, rather than using robots for routing. And it allows everybody that touches it to be empowered to solve the problem for the customer.
Now, what other avenues can users pursue to get the support they need? Is it just rely on self service resources? Or one of the things that we see a lot of? Partnering with a managed service provider, especially in the SMB space?
My advice would obviously be to keep an open mind. Use all the resources there at your disposal. Interacting with the provider, going through and reading the reference material, user guides, perhaps participating in some forums. Some forums out there that are pretty good as well.
But if that becomes a little too time consuming, and overwhelming, and not efficient and you hit a certain level of scale, that’s when it’s worth seeking a third party service provider’s help outside of the cloud platform. That’s probably not an SMB issue these days. I still think SMBs generally if you work with a good provider, they can help, and there’s enough information to make it happen. But I think as organizations grow and what you’re doing becomes more sophisticated, some assistance can help. That’s independent from the infrastructure platform itself.
I think that’s the future that you’ll see. Even SMB oriented clouds, alternative clouds are starting to spawn ecosystems of small companies or IT shops that say, ‘Hey, you know, we have an AWS competency, we can help you with that.’ And ‘hey, if you’re running on a node, we can help you with that. We can help with that, too.’ So that’s a bit of a way off.
But I think we’re moving in that direction. I wish I knew how fast but we’re moving there. But for now, I think, that gap, back to our kind of original theme, the gap still exists. It’ll probably be some time before it can close. But yeah, in the meantime, it’s about triangulating all those resources and finding the right experience that works for you, as an end user or business.
So last question. How important is support? Are you seeing vendors evolve their approach to support where we’re going to start to see prices come down as competition in the cloud market heats up? And then the ultimate question is, should it be priced differently? Should support be done differently?
Those are those are. We’ll try to tackle the first one. Do we see more competition? On that side? Absolutely. I think infrastructure, where do you find your differentiation, usually, in terms of features, tools and services. And then experience, which is typically a direct byproduct of support.
These are the places that providers are going as competition intensifies. As usership grows, that’s the way to stand out. Produce those good outcomes, to give people the tools and services that they can drive value from and get use out of. So absolutely, I think you’ll see that intensify, I think you’ll see that as a growing emphasis.
A good example is the portal experience, which is a way to support customers, and a venue for meeting customers. Kind of an online medium for meeting customers separate from call support. That thing that’s evolved a long way, since they’ve been around for, I don’t know, 15 years.
Now those experiences have become much more sophisticated, you can do so much in them, buy services, interact with your provider provision, provision services, turndown services, handle your account, billing, etc, reporting. That’s a good example of how things can mature and evolve over time.
The second part of the question, can it get cheaper, or should we price it differently? I don’t think there’s a uniform rule. That would be my first observation. I think it depends on each provider, and each end user, what their preferences and requirements are. I’m not against tiering support. I think it’s good for customers to have options.
The challenge is, obviously, for the operators to make that efficient for their business. But, you know, I can see where that can work for small businesses where maybe that’s that next phase we talked about, instead of working with a cloud platform, hiring an independent provider, maybe you can buy a super premium, let’s call it level of service that is very consultative. Maybe Linode builds a little pod or a little group within its organization to support that first special subset of customers. So I’m not against the tiering.
I think that’s a way to meet the diversity that’s out there. And I think as people get better, you know, you could see some that competition referred to making prices more competitive. But I think that that may evolve only for a certain tier, right? So, I think that as things continue to mature and evolve, there’s always going to be another level to reach and that can always be priced at a premium, I think.
So maybe the standard support gets commoditized a bit and becomes more price sensitive or competitive. But then there’s going to be room for that premium level. Again, to try to address that gap we’ve been talking about today and try to close it for customer.
Well, it is clear that support is a hot topic and one that is top of mind both from a call and a skills gap perspective for a lot of companies both large and small, and as well as, as individual developers, and quite frankly, the providers that they are working with, whether it is a public cloud cloud provider or an MSP.
So I appreciate you taking the time to talk with us again today. I’m still struggling. You mentioned the word portal. And it brought me back years ago to my days working with the Lotus team on knowledge management portals way back in the day, yeah, sorry.
I didn’t want to bring back bad memories if they were but I’m sure you know, since it’s in the past, you might look at it with it.
It’s a technology that’s been around and we still find it useful. So that’s good. Phil, thank you so much for taking the time and I look forward to our next conversation.
Right, thanks for having me again, and I look forward to that too.