According to industry research, cloud managed services for IT will increase by more than 50% over the next five years. In fact, according to MarketsandMarkets, the managed service provider industry will reach a whopping $282 billion by 2023, which is a 56% surge from what the market saw last year.
The reason is that business leaders are coming to terms with the fact that internal expertise is no longer sufficient to run an efficient business. The changing market trends and industry regulations have a direct impact on their day-to-day operational demands. Not having the skill to keep pace with technology only holds back the efforts the business makes to grow.
That’s where a managed service provider comes in.
What is Managed Services?
Managed IT services refers to the practice of outsourcing certain business processes and functions to make operations more efficient and optimize costs. A managed service provider enables a business to focus on its primary operations, increasing their productivity and efficiency at growing in their target market.
A managed IT service provider is unlike the on-demand services. They continually monitor, maintain or manage, improve, support, resolve and report on business operations, ensuring they meet all industry regulations and market needs at all times.
Cloud managed services are helping businesses scale faster. But to match their changing needs, the managed IT service providers are seeing a paradigm shift in their technologies and processes too.
It’s clear from the above that a managed service provider doesn’t just help at technology adoption. They also help in controlling the ongoing expenditure, along with reducing the risks of adopting new technology.
While the market is already seeing an increase in the capital expenditure for cloud and managed IT services by businesses, the industry by itself is evolving.
This article lists all the trends that are set to change the managed service provider sector. Right from the cloud, automation, and outsourcing, to IoT and blockchain, hyper-converged infrastructures, enhanced security measures and more, let’s take a walk through them all to help you understand how managed service providers are evolving too in the wake of digital transformation.
Trends to Watch Out For Managed Service Providers
Cloud, Automation, and Outsourcing
Cloud technology is already being used to build newer platforms to improve a business’s digital transformation. But the application of a multi-cloud environment to enhance customer engagement is a challenge for most enterprises due to the lack of skill and infrastructure. A cloud managed services provider can enable such businesses to adopt the technology into their processes, with consumption-based pricing models, offering easy and affordable scaling.
At the same time, the IT industry is also seeing the adoption of automation. Removing redundant and repetitive tasks from their plate has helped teams become more efficient and get a substantial amount of work done in lesser time. But the automation needs for every business are different. That’s where a managed services provider comes in to offer and help implement custom automation across different business processes.
As mentioned before, business leaders have now realized that in-house skill is no longer sufficient to address the changing industry needs. That’s why you will now see managed IT service providers moving from the age-old SLAs (service-level agreements) to focus more on customer and employee satisfaction on a continued basis.
IoT and Blockchain
According to a report by IoT Analytics, the number of connected devices is expected to grow to 10 billion by 2020 and skyrocket to 22 billion by 2025. But to be able to leverage the two technologies, businesses need a deep skillset. Hiring or having to gain substantial knowledge of these emerging technologies is only time-consuming and inefficient.
With this report being a validation of IoT being the most talked about technology and it is safe to say that an MSP will play a huge role in helping enterprises adopt innovative technologies to remain market-relevant, in the future. Moreover, with a managed service provider handy, businesses can identify the knowledge gaps to optimize the cloud strategy across relevant business operations.
Running on commercial off-the-shelf services, hyper-converged infrastructure draws all the infrastructure of a company together. It connects computing, networking, and storage to create a single, easy-to-use system that enables the business to scale faster towards digital transformation.
A typical hyper-converged infrastructure includes virtual computing, virtual SAB and a virtual network, at a minimum. But implementing this infrastructure is also a complex process that requires care and expertise.
A managed service provider can help a business set up a hyper-converged infrastructure. Their team of experts can understand the current and changing needs of the enterprise, and help create and implement a single infrastructure that makes their business processes more efficient.
Mergers and Acquisitions
Another trend you can notice in the managed IT services sector is the increase in mergers and acquisitions – of tools that service providers use to operate their businesses. The reason for mergers and acquisitions to trend in the sector is the need to offer a holistic solution to target enterprises.
A managed service provider needs to be able to offer an integrated solution set. Not providing something that a business needs, is creating grounds for losing them to a competitor. So this year will definitely see MSPs seeking more mergers and acquisitions for IPs, managed security services and other skills.
With the number of cyberattacks increasing by the day, it is becoming important for businesses to secure their infrastructure. This requires them to first identify the touchpoints that are at the highest risk of being broken into, building out solutions to secure them, implement the solutions and then continually monitor them for any leaks. To implement such security efforts and put a contingency plan in place, a business needs to have the right skills.
One major challenge that most businesses – small to medium, face, is a limited IT budget. This restricts them from implementing the required security measures for their infrastructure.
Juniper Research reports that cybercrimes have accounted for trillions of dollars being lost. The amount totalling to $2 trillion for 2019 itself. That makes compromising on security a big no-no, no matter what the size of your business is.
That’s where managed security services come in.
A managed security service provider can help businesses secure their infrastructure. But in addition to that, managed security services continually monitor, defend, optimize security measures and regulations, and help businesses recover from cyberattacks.\
With industry requirements, standards and consumer needs changing by the day, businesses are now seeking result-based outcomes. They want to have pre-defined or expected standards documented clearly to be able to quantify results in real-time.
A managed service provider will now be seen using advanced analytics and reporting to state the impact of technologies implemented, and present concrete data. While this will give businesses an assurance of getting the most out of their cloud managed services, it will also nudge the managed IT service providers to continually upskill. They will be seen evolving their style of management and functions offered, also adding consulting services to their clients to help measure results.
Businesses are now venturing into new and emerging technologies to make their day-to-day operations more efficient, and result-oriented. But adopting those technologies isn’t just about having the right skills, but also resources to afford them – both in terms of the hardware and the software.
That’s where you will see the new-age cloud managed services provider offer infrastructure-as-a-service (IaaS). The service model delivers a computer infrastructure to support business operations, on an outsourced basis. Typically, a managed service provider will provide the required hardware, software, storage, servers, network components and a data center in the model.
The subscription-based billing model of IaaS will offer many advantages to businesses in terms of scalability, cost, and security.
Industry standards and regulations are always changing. Technologies are ever-evolving. Consumer engagement is getting redefined every day.
Simply put, opportunity comes to those who are prepared, and businesses need to keep up with the pace.
Now continually improving or getting new skills in-house is not a scalable model. It will take businesses months or even years to effectively implement solutions in their day-to-day processes. That’s why a managed service provider is becoming a must for fast-scaling enterprises.
With an expert managed service provider like Rapyder, you can implement the latest and upcoming technologies to improve business processes. With deep expertise in AWS cloud services, the team can help you address a wide range of cloud-based requirements.
Rapyder works with businesses to understand their strategic objectives – customer engagement, go-to-market, cost reduction, new products or being able to adopt innovation. Right from migration, DevOps, cloud computing services, security concerns, building a business from scratch on the cloud, the team creates solutions that are tailor-made to suit your existing and changing needs. They then work with your in-house IT and business teams to deploy the processes, methods, and tools.
Every solution presented or advice shared with your business is vetted by established research methods and years of experience in the managed service provider industry.
Want to know more about how a managed service provider can help your business with digital transformation?
Contact us today.