Digital Business Impact on Managed Services Providers

Every company regardless of the industry, moving into digital business. But what exactly is digital business. In simple words – creating new business model through which companies interact with consumers and devices (IOT). Using these new business models, companies creates new values for human and nonhuman customers. One good example is UK’s Atom bank has no branches or call center. All the bank related tasks and work are being handled by mobile apps. If we look at Shazam app, its business model of doing music identification all through a mobile app has made it one of the most popular app in the world. These new Digital Business model has large Impact on Managed Services Providers (MSPs).

Digital Business Impact on Managed Services Providers

In digital business, usually services and business model is very agile and normally capitalizing on many microservices from public cloud vendors (AWS/Azure/Google). DevOps is foundation for this kind of model and continuous development and release makes companies to respond to changes quickly. This in contrast opposite of the MSPs comfort zone which prefer stable and not-so-dynamic workload.

This creates both opportunity and challenges for IT MSPs. MSP can choose to either complement DevOps model with agile testing framework or start building their own niche focusing on industry vertical or solutions. In the short term enterprise are still looking to reduce cost. But in the long term they are trying to change the way they operate either going for Autonomous IT operations or working with MSPs who can constantly keep up to date with all the advancements happening in their industry vertical. This MSPs will also need to have capability to migrate and manage workload efficiently regardless of cloud vendor or technology.

For Infrastructure Managed Service Provider, following trends are expected in future:

1) Decline in revenue for traditional business
2) Customer expectation move away from infrastructure based IT to outcome based
3) Short term high demand for particular skill set focusing on cloud native features of hyperscale cloud vendors

To grow in the future, Infrastructure MSPs should

1) Come to agreement with hyperscale IAAS Providers (AWS, Azure, Google) to use and manage it for customers
2) Autonomous Agents and Things to bring pro-activeness in every aspect of support model
3) Provide a single pane of glass for multiple cloud services
4) Hire or build deep skillset in the cloud native features and DevOps process.
5) Build a industry vertical solution and expertise

For Application Managed Service Provider, following trends are expected in future:

1) Decline in revenue for traditional business
2) More and more application will be geared towards mobile and internet of things

To grow in the future, Application MSPs should

1) To keep up with fast development, testing procedures need to keep up to it.
2) Do not limit the service for management of application and platform. Move up in the food chain and relate the services to business outcome.
3) Have a niche involving internet of things and mobile related applications.
4) Increase capabilities for Platform-as-a-Service (PAAS) and Software-as-a-Service Portfolio.
5) Protect customer from vendor lock-down in the cloud
6) Build industry vertical solution and expertise

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