A survey of 200 senior IT executives working at organizations with more than 2,500 employees conducted by IDG Research on behalf of Insight Enterprises, a provider of IT services, suggests there is a high correlation between organizations that have launched digital business transformation initiatives and the adoption of managed services.

The survey finds more than two-thirds of respondents (67 percent) state that IT modernization is essential to enabling business transformation initiatives. On average 95 percent of respondents that have embarked on such efforts have outsourced one or more IT functions to a managed services provider (MSP). A full 84 percent added they have outsourced or started outsourcing cloud management to an MSP.

The survey also notes that only a quarter have achieved initial IT modernization objectives so there’s still much work to be done. Conducted prior to the economic downturn brought on by the COVID-19 pandemic, those survey results might potentially be even more relevant now. Organizations of all sizes are responding to the pandemic by relying more on digital processes to manage employees and engage customers. Most of those digital processes rely on either packaged Software-as-a-Service (SaaS) applications or custom applications deployed in the cloud.

Of course, over time it’s sometimes hard to distinguish between a customized SaaS application and an application written from the ground up using code created by a developer team. By the time many organizations are done customizing a SaaS application, it may be barely recognizable to any other user of that application.

MSPs can help these organizations

Regardless of how they get application code to the cloud, many organizations will need a lot of outside help managing and securing those applications. Most organizations were struggling to keep pace prior to the pandemic. Now that timelines for many digital business initiatives are being accelerated, fast approaching deadlines don’t leave much time to train internal IT staff on how best to employ, for example, DevOps practices to build, deploy, manage, secure and update cloud applications.

Naturally, the rate at which digital applications will be built and deployed will vary widely by vertical industry. Sectors such as the hospitality industry might not have the funds available to drive these types of applications. The fact is, organizations with deep pockets will be in a much better position to make investments that will not only enable them to survive, but ultimately thrive at the expense of rivals that might not be able to weather the storm nearly as well.

However, it’s also now apparent MSPs that have too closely aligned themselves with a specific vertical industry should reconsider their strategy. Just like an individual investor will get burned when they fail to diversify their stock portfolio, MSPs that put all their eggs in one vertical industry basket are bound to eventually experience hard times. No MSP should try to be all things to all customers. However, if all your customers are basically the same type of organization, any disruption to that industry will result in levels of pain most small to midsized MSPs are never going to be able to absorb.

Photo: metamorworks / Shutterstock

Mike Vizard

Posted by Mike Vizard

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications including InfoWorld, eWeek, CRN, Baseline, ComputerWorld, TMCNet, and Digital Review. He currently blogs for IT Business Edge and contributes to CIOinsight, The Channel Insider, Programmableweb and Slashdot. Mike blogs about emerging cloud technology for Smarter MSP.

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