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Historically, anytime there has been a sharp economic downturn, investments in IT have tended to suffer. Fortunately, the economic downturn brought on by the COVID-19 pandemic appears to be something altogether different.

Recent financial results, from Intel and Microsoft especially, indicate consumption of IT technologies is rising. Intel in its latest financial report noted that its Client Group revenues were up 7 percent, while the Data Center Group, which sells processors to both server vendors and cloud service providers, saw a 43 percent jump in revenue.

The degree organizations will continue to invest in IT in the second half remains to be seen. However, a global survey of 2,002 professionals conducted by Dimensional Research on behalf of Epicor, a provider of enterprise resource planning (ERP) software, suggests IT investments are now seen to be much more strategic than they have been in the past.

Survey respondents said their organizations over the next 12 months are prioritizing better technology (41 percent), working more efficiently (41 percent) and better planning (39 percent).

Key emerging technology trends over the next 12-18 months identified by survey respondents include 5G wireless networks (39 percent), cloud technology (38 percent), and AI and machine learning algorithms (32 percent).

Surprisingly, more than 80 percent of respondents report AI has delivered business value in two years or less. A full 86 percent see AI was driving growth overall, with 38 percent saying AI has made their organizations more competitive.

Big data analytics, meanwhile, is being credited with improving profitability (45 percent), increasing sales (44 percent) and optimizing operations (43 percent).

Betting on IT to get through the crisis

The expectation is that myriad digital business initiatives will sustain revenues and streamline processes in ways that meaningfully strengthen bottom lines.

Expectations of managed service providers (MSPs) are also changing. While there’s always interest in reducing IT costs, most businesses today are looking to IT to drive revenue and profitability across the business. MSPs that are solely focused on reducing IT budgets are not going to be asked to participate in what amounts to a much larger conversation. Rather, business and IT leaders are anxious to hear from MSPs on how IT can be applied to enable the business to both survive, and ultimately thrive, in the COVID-19 era.

MSPs that want to remain relevant to their end customers need a deeper appreciation for the role IT plays in how business operates. If the overall IT budget is only 3 to 5 percent of revenues, then saving 10 to 20 percent on backup and recovery costs isn’t a strategic opportunity. It’s a tactical issue organizations will determine they can address as time warrants.

The good news is there’s never been a better opportunity for MSPs to become a strategic partner for a wide range of customers that need a lot more than a technology advisor. MSPs need to become strategic business partners that are viewed as nothing less than indispensable. Anything short of that is simply one more supplier among many offering suggestions.

However, it’s not especially easy to become a strategic business partner. MSPs that aspire to achieve that status need to spend a lot of time with their end customers. While it may be difficult to find that time, it’s also no coincidence that MSPs willing to truly invest in developing deep ties with their customers are rarely asked to justify the cost of their services.

Photo: Karramba Production / Shutterstock

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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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