Managed Services

As part of 451 Research's ongoing coverage of the impacts of the COVID-19 outbreak, we thought it would be interesting to reach out to a number of our datacenter provider contacts to see what they are learning from all this, and how they're adapting, or even innovating, in response to the current challenges

'Paranoid' provisioning has allowed many to bring services online in a fast and efficient manner as the world comes under COVID-19 lockdown (in fact, it has provided the opportunity for many to test contingency plans, in many cases with success).

The importance of having real-time information that we can trust, feeling safe about the goods we purchase, and getting what we need as easily as possible without wasting time and resources has been highlighted by COVID-19.

A widespread shortage of cloud expertise has exposed an opportunity for managed service providers to fill the void and address new organizational challenges. Successful service providers will need to acquire and provide expertise in cloud technologies while also seeking partnerships to take advantage of new opportunities.

The cloud space continues to evolve as hybrid/multi-cloud emerges as the key organizing principle for increasingly heterogeneous IT, cloud-native technologies enter into IT environments, and complexity (and lack of in-house skills) creates a new landscape for IT operations. Enterprise workloads are on the move, and they're transforming.

Based on the M&A pace through the first seven months of 2019, full-year spending on acquisitions in the hosting/managed services market is tracking to about $3bn, according to 451 Research's M&A KnowledgeBase. Assuming the back half of 2019 plays out the way the year has gone so far, the value of announced transactions in the sector would be less than one-third the annual spending in any of the previous four years.

Finding service providers that can be trusted has become a key concern for enterprises, particularly as cloud and service providers play an increasingly larger and critical role in enterprise strategies. At the same time, service providers are fervently working on ways to prove they warrant trust from their customers. But maybe, in all these cases, it really isn't about trust. Maybe what enterprises are looking for is proof.

According to 451 Research's Voice of the Service Provider: Differentiation & Vendor Selection 2018, 86% of telcos, MSPs, systems integrators, MSPs, colos and SaaS providers are currently partnering with the largest of public cloud providers. This is a major shift from 7-10 years ago, when service providers were in a race to provide compute- and storage-based services for the lowest price.

Over the last decade, consumers and businesses around the world have fanatically embraced technology, becoming increasingly dependent on all things digital. At first, many were wary about embracing tech like the cloud for mission-critical functions or private and protected data, but those fears were quickly overcome by the fear of being left behind in an increasingly digitized economy. Now that blind trust is being questioned and a collective unease is beginning to rise.

In a multi-cloud, hybrid IT architecture world, where applications are deployed as microservices, the use of service meshes is becoming an important (although not mandatory) component of cloud-native architecture.

Organizations are beginning to discover that identity and access management (IAM) is a key component to controlling user access to critical information across the entire enterprise ecosystem while ensuring compliance with corporate policies and regulations.

Business communications are transitioning into an open, software-defined ecosystem that will enable intelligent, communications-enabled workflows for customer and employee interactions. We look at the role that programmable communications will play in this transformation and outline the four key attributes that will define the emerging business communications ecosystem.