IaaS for MSPs: A practical guide to building profitable cloud services

Infrastructure as a service (IaaS) is becoming a bigger opportunity for managed service providers (MSPs), cloud service providers (CSPs), hosters and telecommunications providers.

Clients still need compute, storage and networking. But many are rethinking where those workloads should run.

Rising public cloud costs, VMware migration pressure, data sovereignty requirements and demand for more predictable service models are creating a new opening for providers that can deliver secure, managed cloud infrastructure.

For MSPs, the opportunity is not simply to resell virtual machines. The bigger opportunity is to package infrastructure into repeatable cloud services, including self-service IaaS, provisioned infrastructure, managed IaaS, migration services, backup, disaster recovery and security operations.

This guide explains what IaaS means for MSPs, which business models to consider, how to package services for margin and how Acronis Cyber Frame can help service providers build IaaS offerings with integrated cyber protection, management and automation.

Infrastructure as a service gives clients access to cloud-based infrastructure resources such as virtual machines, storage, networking and public IPs. Instead of buying and maintaining physical servers, clients consume infrastructure on demand.

For MSPs, IaaS is more than a hosting model. It can become a recurring service line that combines infrastructure delivery with provider expertise.

An MSP can provision resources, define service tiers, manage backups, monitor workloads, handle support, provide migration assistance and attach higher-value services such as disaster recovery or managed detection and response (MDR).

A simple IaaS offer may include:

• Virtual machines with predefined CPU, memory and storage profiles
• Virtual networking, firewalling, VPNs and public IP options
• Backup and recovery policies
• Monitoring and support
• Integrated cyber protection, including anti-malware, anti-ransomware, EDR and XDR
• Optional disaster recovery, migration and managed operations

The strongest IaaS strategy is usually not built around raw infrastructure alone. It is built around a clear client outcome: predictable cloud infrastructure, local control, simplified migration, better workload resilience or managed operations.

Providers can also attach higher-value services such as backup, disaster recovery and managed security to increase resilience and margin.

IaaS adoption is being shaped by several client pressures.

First, many organizations are reviewing public cloud spend. Public cloud platforms are powerful, but not every workload needs hyperscaler-native services. Steady-state workloads, databases, line-of-business applications and test environments can become expensive or difficult to forecast when clients rely on complex usage-based billing.

For clients reassessing hyperscaler spend, public cloud repatriation can also create a path to more predictable costs, local control and managed infrastructure services.

Second, VMware migration has become a board-level and IT-budget discussion for many organizations. Clients running VMware private cloud environments are evaluating alternatives, especially when renewal costs, licensing changes or long-term platform strategy become concerns.

That creates opportunities for service providers that can support VMware to cloud migration, workload modernization and ongoing managed infrastructure services.

Third, data sovereignty cloud requirements are increasing. Some clients want local or regional infrastructure, clearer control over data residency and a closer relationship with the service provider responsible for the environment.

For MSPs, this creates a practical opening: become the IaaS service provider that gives clients cloud flexibility without forcing them into hyperscaler complexity or unmanaged infrastructure.

The fastest starting point is to resell IaaS through a cloud reseller platform. This model works well for MSPs, value-added resellers (VARs) and partners that want to launch cloud infrastructure services without buying hardware or operating a data center.

This approach is similar to a cloud hosting reseller or cloud services reseller model, but with more room to differentiate if the provider adds onboarding, support, backup, disaster recovery or managed services.

Best fit:

• MSPs that want fast time to market
• Providers that do not currently own infrastructure
• Teams that want to validate client demand before investing in private cloud infrastructure
• Partners that want to offer white-label cloud services under their own commercial model

The main advantage is speed. The MSP can package, sell and support infrastructure services while the underlying platform operator handles the infrastructure layer.

A second model is to build and operate your own cloud. This is a better fit for CSPs, hosters, telecommunications providers and mature MSPs that already have infrastructure skills or want more control over location, performance and long-term unit economics.

This model can support private cloud infrastructure hosting, sovereign cloud services and a multitenant private cloud offering. It is especially relevant when clients want local control, regional hosting, predictable pricing or an alternative to an existing VMware private cloud architecture.

Best fit:

• Providers with data center, colocation or hosting capabilities
• Providers that want control over workload location and infrastructure design
• Clients with data residency or sovereignty requirements
• Providers that want to improve margin through utilization over time

The trade-off is operational responsibility. Running private cloud infrastructure requires skills in virtualization, networking, storage, backup, recovery, security policy and capacity management.

For many MSPs, the most attractive model is managed IaaS. Instead of selling infrastructure as a self-service utility, the MSP sells a managed business service.

In this model, the provider may take responsibility for provisioning, monitoring, patching, backup verification, recovery support, incident response, routine changes, service reporting and defined service-level agreements (SLAs).

This is where IaaS management becomes a value driver rather than just an operational task.

Best fit:

• Existing MSP clients that already trust the provider
• SMB and midmarket clients that do not want to manage infrastructure themselves
• Regulated or risk-averse clients
• Service-provider IaaS environments that need operational support
• Clients that value outcomes over infrastructure components

Managed IaaS also creates more room for margin because the provider is not competing only on virtual machine price. The offer can include onboarding, migration, support, backup, disaster recovery, security monitoring and premium operations.

A strong IaaS service provider platform should help MSPs deliver infrastructure consistently, securely and profitably.

The most important capabilities include:

• Provisioning of virtual machines, networks and storage
• Multitenancy to support multiple clients with logical isolation
• Client self-service for low-touch or zero-touch provisioning
• Centralized management for operations, policies and visibility
• Backup and disaster recovery to improve resilience
• Security controls to reduce client risk and support managed security services
• Automation and APIs to simplify repeatable delivery
• Billing and PSA integrations to support recurring revenue models
• White-label delivery so the provider can build its own branded service

This is where a multitenant cloud management platform becomes important. MSPs need more than compute. They need the operational foundation to package, sell, secure, support and scale the service.

Acronis Cyber Frame is designed for this use case. It enables service providers to deliver IaaS with integrated cyber protection, management and automation, while supporting both Acronis-hosted and service-provider-hosted deployment models.

IaaS security risks are one of the main reasons clients may prefer to work with an MSP instead of managing infrastructure alone.

Common IaaS security risks include misconfigured access, weak backup policies, inconsistent patching, poor monitoring, unclear shared-responsibility boundaries and lack of tested recovery processes.

Important cloud IaaS security considerations include:

• Who is responsible for operating system, application and workload security?
• Are backup policies included by default or sold as an add-on?
• How are security alerts monitored and escalated?
• Are disaster recovery options available for critical workloads?
• How is tenant isolation enforced?
• How are client permissions and self-service limits governed?
• How are recovery requests handled?
• How are SLAs documented and reported?

MSPs should define these boundaries clearly. A self-service IaaS package may leave operating system and application management to the client. A managed IaaS package may include monitoring, patching, backup verification, incident response and recovery support.

IaaS backup should not be treated as an afterthought. It should be part of the core service design, with clear policies for retention, recovery objectives, testing and client responsibilities.

The best IaaS offers are easy to understand and easy to sell. Avoid leading with dozens of raw infrastructure line items unless the client specifically wants that model. Most MSP clients prefer clear packages.

A practical packaging structure could look like this.

For technically capable clients that want control over virtual machines, storage and networking.

The MSP provides platform access, quotas, billing, basic support and service availability. The client manages the operating system, applications and day-to-day workload operations.

For SMB and midmarket clients that want help getting started.

The MSP provisions virtual machines, applies standard templates, configures guardrails, assists with sizing and supports initial migration or onboarding. The client still handles most ongoing workload administration unless managed services are added.

For clients that want the provider to manage the environment.

The MSP takes operational ownership based on the service tier. This may include monitoring, patching, backup verification, incident response, recovery support, service reporting and defined SLA commitments.

This model aligns well with recurring revenue because the provider is selling operational accountability, not just infrastructure capacity.

MSPs can price IaaS in several ways.

Per virtual machine or per resource bundle is often the simplest starting point. The provider defines packages such as Starter, Business and Performance, each with a set amount of CPU, RAM, storage, backup scope and support.

Tiered service packages work well for managed IaaS. For example, Essentials may include virtual machine infrastructure and business-hours support, while Advanced and Premium add faster SLAs, patching, monitoring, optimization or 24/7 support.

Fixed monthly management fee plus usage works well when the MSP wants to separate infrastructure consumption from management value.

Project fee plus recurring revenue is especially useful for migration-led deals. The provider charges for assessment, design, migration or onboarding, then converts the client into a recurring IaaS or managed infrastructure service.

The goal is not to be the cheapest virtual machine provider. The goal is to deliver secure, resilient infrastructure with pricing that reflects the service outcome. These pricing examples are illustrative only; actual results depend on pricing, utilization and operating model.

Migration can be a strong client onboarding motion, especially for VMware migration, selected cloud repatriation and private cloud modernization projects.

Instead of treating IaaS migration as an optional add-on, MSPs can package it as a structured service:

• Assessment and workload discovery
• Sizing and target environment design
• Migration planning
• Test migration or backup-based staging
• Cutover support
• Post-migration validation
• Ongoing managed infrastructure services

This is especially relevant for VMware to cloud migration. Many clients know they need to evaluate alternatives, but they may not have the internal skills or time to plan the transition.

MSPs can reduce risk by starting with workloads that are easier to migrate and support, such as line-of-business applications, steady-state databases, test and development environments and selected repatriated workloads.

MSPs can also position IaaS as a destination for clients planning VMware migration and looking for a more predictable infrastructure model.

Acronis Cyber Frame helps service providers deliver IaaS with integrated cyber protection, management and automation. It supports two deployment paths, but they should not be treated as equal starting points for every MSP conversation.

For most MSPs, Acronis Cyber Frame Cloud is the default starting point. Cyber Frame Cloud is Acronis-hosted infrastructure delivered through the Acronis console. Acronis operates the infrastructure; the partner provisions and manages client workloads.

This model is suitable for providers that want to launch IaaS quickly without owning or operating infrastructure.

Acronis Cyber Frame Local becomes the lead option when infrastructure control, data location, sovereignty, performance design or long-term infrastructure economics are strategic. It is designed for providers that want to run cloud infrastructure on their own or colocated hardware.

Cyber Frame Local should be planned as production infrastructure, not as a small or single-node deployment. Production deployments require a minimum of three nodes, five or more nodes are recommended, and larger environments should ideally use 10 or more nodes.

This gives service providers a clear path: start with Cyber Frame Cloud for speed and minimal infrastructure burden, lead with Cyber Frame Local when control or sovereignty is strategic, and package either model as managed IaaS where the provider wants to monetize service delivery rather than infrastructure alone.

The most successful MSP IaaS offers are not built around selling the cheapest compute. They are built around client outcomes:

• Predictable cloud infrastructure
• Easier VMware migration
• Local or regional hosting
• Better resilience
• Simplified backup and recovery
• Managed operations
• Security and monitoring
• Clear support ownership
• A path away from infrastructure complexity

For MSPs, this is the difference between selling infrastructure and building a cloud services business. The first competes on price. The second creates recurring value.

Learn how to choose the right IaaS business model, package your offer and price for margin in the guide How to build a profitable IaaS business with Acronis Cyber Frame.

IaaS for MSPs is a way to deliver cloud infrastructure services such as virtual machines, storage and networking to clients. MSPs can package IaaS as self-service infrastructure, provisioned infrastructure or managed IaaS with support, backup, security and disaster recovery services.

IaaS can be profitable when it is packaged and priced correctly. Margin depends on the provider’s business model, infrastructure costs, utilization, service attach rate, support cost and operational efficiency.

MSPs should avoid selling only raw virtual machine capacity and instead build offers around managed outcomes, migration, backup, disaster recovery and security.

Common IaaS security risks include misconfigured access, unclear responsibility boundaries, inconsistent backup policies, poor monitoring, unpatched systems and untested recovery processes.

MSPs can reduce these risks by defining service tiers, applying standardized security policies and offering managed IaaS services.

MSPs that want fast time to market may start by reselling IaaS. Providers with hosting capabilities, data center operations or sovereignty requirements may choose to build private cloud infrastructure.

Many providers can start with a cloud model and add a private or local model later as client demand grows.

IaaS gives clients a destination for VMware workloads when they want to modernize, reduce licensing exposure or move away from existing VMware private cloud environments.

MSPs can support VMware migration through assessment, sizing, migration planning, cutover and recurring managed infrastructure services.