Last updated on: February 03, 2020
Current trends in managed services
The advancements in the managed services industry are directly proportional to the advancements in IT.
Why?, you ask?
The answer is quite simple. MSPs are hired for their expertise with technology. To stay in business and ahead of their competitors, MSPs improvise—they make changes in their processes, technological infrastructure, and management practices.
Let's take a look at some facts about the managed services industry:
- 59% of IT services have transitioned from the traditional break-fix model to a managed service contract model.
- About 45% of organizations plan to partner with a managed security service provider.
- 42% of organizations deploy additional security software to protect data and applications in the cloud.
- As of 2019, 60% of companies were already on hosted cloud services.
- In 2019, IT outsourcing revenue was $66.5 billion.
Looking at these facts, we can deduce that companies from all around the globe are coming to terms with the fact that internal resources are insufficient to handle certain processes and business functions. To run a business efficiently and stay on top of changing market trends and industry regulations, MSPs are required.
Whether it's outsourcing, cloud services, IoT, or hyper-converged infrastructures, let's look at all the current trends that are disrupting the managed services sector.
Most established businesses have realized that an internal IT team just won't do. The ever-growing number of disruptions in the IT industry are quite expensive to keep up with. On the other hand, most small businesses can't afford to match the in-house support services that larger companies can maintain. Hence, outsourcing.
Even though data security concerns persist, 78 percent of businesses all over the world feel positive about their outsourcing partners. The US alone outsources over 300,000 jobs every year. This clearly paints a picture of how the trend of outsourcing is still quite prominent among businesses. MSPs can leverage this to capture a large market space.
The cloud industry has expanded its reach into every corner of the IT industry. It's gaining more affinity by the day, because even the smallest of businesses are aiming to be global and the ability to provide services from anywhere is facilitated by the cloud.
Cloud technology is already being used to build new platforms to improve businesses’ digital transformation. However, most organizations aren't capable enough to shift their processes to cloud platforms due to lack of skills and internal infrastructure. MSPs can help organizations easily utilize this technology in their business processes at an affordable price.
Automation is being adopted at the same speed as cloud computing or outsourcing. The IT industry is being revolutionized by automation, as it helps organizations reduce mundane, repetitive tasks, like data migration from one system to another.
Simple rule-based automated tasks are helping IT teams become more efficient. This not only reduces human error and resolution time but saves manpower for more critical tasks. MSPs with expertise in automation can offer huge benefits to business functions across enterprises (like HR, finance, travel, and marketing) and maximize businesses’ profitability.
IoT and blockchain
IoT and blockchain are some of the most disruptive technologies in the IT industry at present. While IoT connects devices over a network, thereby enabling devices to interact with each other without human intervention, blockchain is a distributed ledger that offers a decentralized and highly scalable environment to IoT devices, platforms, and applications.
Blockchain technology can be leveraged to specify the nature of communication between two devices and monitor the state of these devices. A combination of the two empowers IoT devices with enhanced security (resolving one of the biggest concerns regarding this technology currently) and brings much required transparency to IoT ecosystems.
Applications like smart contracts (built on blockchain technology and carried out when specific conditions are met) can improve IoT compliance as well as bring huge improvements in IoT features and thus improve the technology’s cost-efficiency. MSPs with expertise in IoT and blockchain can help organizations adopt these technologies and stay relevant in the market.
Hyper-converged infrastructure (HCI) combines storage, computing, and networking into a single system with intelligent software. This creates flexible building blocks that replace legacy infrastructure with a single infrastructure. This makes business processes more efficient, reduces data center complexity, and increases scalability.
In order to stay ahead, organizations demand simplified management, increased performance, and reduced time-to-market. To achieve that, technologies like HCI have now become a business necessity. MSPs can help businesses set up HCI since their team of experts come with an understanding of current and changing needs.
Mergers and acquisitions (M&A)
In order to stay ahead in the MSP business, an MSP either has to keep investing in new technologies and differentiating itself or engage in the world of M&A by acquiring another company or positioning itself as a business to be acquired.
Cybersecurity threats and a shortage of skilled professionals are driving small MSPs towards M&A. In order to provide a holistic service experience, more established MSPs have been acquiring organizations that help them bring everything under a single roof.
About 85 percent of enterprises are now using sensitive data in the cloud, up from 54 percent in 2015, and on an average, 9.3 percent of documents shared externally in the cloud contain sensitive content. Therefore, it's crucial for businesses to secure their IT infrastructure.
In order to do that, the foremost requirement is to identify all the at-risk touch points and provide solutions to secure them. Post in-house implementation of IT security services, it becomes crucial to find any shortcomings and monitor them. Ultimately, organizations should keep a contingency plan in place in case of an attack. A limited IT budget, lack of expertise in this area, and a shortage of resources make it impossible for organizations to do all this.
MSPs with expertise in data security can not only help secure their clients’ IT infrastructure but also provide 24x7 monitoring and help clients optimize their security measures and keep up with regulations. With increased risk of cyberattacks, more and more organizations will turn to MSPs in order to leverage their capabilities.
Infrastructure as a Service (IaaS)
In this model, service providers host the infrastructure elements that are usually present in an on-premises data center. This service includes elements like hardware, software, storage, servers, and networking components, along with the virtualization layer, to help organizations scale quickly to meet demands.
IaaS also enables organizations to cut costs, reduce the time spent managing in-house infrastructure, and improve service levels for their end users. This model completely eliminates wait times for hardware, other components, or on-site support.
Apart from that, the subscription-based billing model of IaaS offers many advantages to businesses in terms of scalability, cost, and security. A lot of MSPs and VARs are opting for this service model, as it is gaining more and more traction among businesses.