The Risks of MSP-Hosted Environments: A Client Transition Case Study

Background

We’ll be diving into the challenges we faced when transitioning a new client from their previous Managed Service Provider (MSP). Their existing setup, with all production servers, data, and backups residing within the previous MSP’s private datacenter, presented a unique and complex migration landscape. This scenario revealed some critical issues that we’ll unpack here, demonstrating how we navigated them to ensure a smooth and secure transition for our new client.

Navigating the Challenges

1. Offboarding Fee: The former MSP demanded a substantial “offboarding fee” to cover the costs of exporting and transferring the client’s production data. This fee amounted to a five-figure penalty for canceling their services.

2. Limited Access: The offboarding MSP only permitted user-level access to the hosted environment, citing security and liability concerns. This restriction forced us to rebuild the entire environment from scratch on a new platform, migrate all users, data, and software, without any visibility into the underlying infrastructure.

3. Significant Disruption: The transition caused significant disruption over several months, with numerous issues arising as old workflows were reestablished in the new environment. Additionally, over 300 hours of billable labor were incurred, along with the offboarding fee and standard onboarding costs.

The Hidden Costs of MSP Hosting

Many MSPs offer to bundle hosting services as a value-add, but this often results in clients being locked in with “golden handcuffs,” creating barriers to changing providers in the future. This example highlights some of the potential pitfalls of allowing an MSP to host your environment:

High Exit Costs: Substantial fees for offboarding and data transfer.

Limited Control: Restricted access to your own environment.

Operational Disruption: Significant time and resources required to transition to a new platform.

The Solution: First-Party Licensed & Fully Managed Cloud Hosting

To ensure the stability and continuity of your environment, it should always be hosted on platforms and accounts owned by your business. Here’s why on-prem hosting in Microsoft Azure, managed by your MSP, is a superior choice:

1. Full Ownership: You maintain complete control over your environment, ensuring easy transitions if needed.

2. Enhanced Security: Microsoft Azure provides robust security features, protecting your data and infrastructure.

3. Scalability and Flexibility: Azure’s scalable solutions allow your environment to grow with your business needs.

4. Cost Efficiency: Avoid hidden fees and reduce operational disruptions with a transparent and predictable cost structure.

Choosing to host your environment on-prem in Microsoft Azure, managed by your MSP, offers greater control, security, and flexibility. This approach not only protects your business from the hidden costs and operational disruptions associated with MSP-hosted environments but also ensures your ability to adapt and grow with future opportunities.

Interested in Learning More?

Concerned about migrating from your current MSP? Contact us today for a free consultation and discover how we can ensure a smooth and secure transition to a modern cloud environment.