The more things change, the larger the opportunity for managed services providers becomes. At the Gartner Symposium/ITxpo 2017 conference this week, Gartner predicted that not only will worldwide spending on IT increase 4.3 percent in 2017, but spending on IT services will also increase 4 percent in 2017 and another 5.3 percent in 2018. In all, Gartner says spending on IT services will reach $908 billion in 2018, and total IT spending in 2018 will reach $3.7 trillion.
Gartner analysts expect a wave of digital business transformation to lift IT spending across every major category. This week, Gartner forecasted that investments in a broad range of artificial intelligence (AI) capabilities, conversational interfaces, distributed ledgers based on blockchain technologies, event-driven IT platforms, augmented and virtual reality applications, advanced security technologies, and devices deployed at the edge of the network to drive Internet of Things (IoT) applications will all have a significant impact on IT spending in 2018. The analysts further predict that by 2022 AI, blockchain technologies, IoT, and conversational interfaces will have utterly transformed IT as we now know it.
Preparing for future challenges
The issue MSPs will need to contend with is determining precisely when and where the projected increases in IT services spending will arise. It’s already clear that many of the technologies that drive IT services revenue today are becoming increasingly automated. Updates to software will increasingly be automatically applied by vendors such as Oracle and VMware. That suggests the IT services revenue opportunity will be much higher up the software stack in the future.
Organizations of all sizes are trying to stitch together multiple digital business processes to create a better a customer experience while also sharply reducing costs. Whether or not these investments will create a sustainable competitive edge for those organizations is, of course, debatable. In practice, investments in digital business processes are the new table stakes. Organizations that can’t flexibly employ IT to adroitly respond to changing business conditions and events will fade away sooner rather than later.
Becoming a strategic business partner
Organizations aiming to survive going forward need to engage MSPs on a more strategic level. Most of the engagements with MSPs today are tactical, involving the outsourcing of one IT process or another. When IT becomes a critical component of that business, however, the relationship between the provider of IT services and the business needs to change. Not only will there be more interactions with line-of-business executives, MSPs will be expected to be intimately familiar with how the business operates.
That will be a major challenge for MSPs that have historically focused on IT implementation proficiency rather than business acumen. Most organizations will not be looking merely for a trusted IT advisor. They will require MSPs to function more like a strategic business partner that provides expertise in not just how to use IT, but also where and when to exploit emerging technologies. For far too many MSPs that may prove to be the toughest question they will ever be asked to answer.
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