Three Realities of Modern Business that are Driving Managed Services adoption

By Bill Padfield, Senior Executive Vice President, Transformation & Platform Services, NTT Ltd.

Bill Padfield, Senior Executive Vice President, Transformation & Platform Services, NTT Ltd.

The managed services space has weathered the digital disruption storm and continues to grow. More services are available in more ways than ever before. Businesses are readily embracing the newfound flexibility in selecting technologies and processes perfectly suited to their business with a cost-effective, on-demand service wrap.

Like so many industries, the managed services sector has had its fair share of disruptions – cloud, new competitors, big data, machine learning – but it hasn't led to the doom and gloom scenario many predicted. Managed services have gone from strength to strength, with the industry projected to be worth over USD 280 billion by 2023. Asia-Pacific has been identified as the world’s fastest managed services market and it has been predicted to grow from $28.03 billion to $64.01 billion by the year 2021.

Here are three critical trends likely to drive managed services adoption even further.

1. The rise of consumption-based business models
How enterprise organizations consume technology has historically sat in either expensive on-premise solutions or complicated outsourcing models.

More business customers are looking for their enterprise technology experience to match how they consume television, music and other applications. Take Spotify, for example – a music streaming service that provides unrivalled access to music, on whichever device and in whichever location a user desires. It's a no-contract, monthly subscription and is an infinitely cheaper option to clogging your shelves with CDs or downloading specific albums to a digital device.

Look no further than Apple’s recent announcement that it’s finally killing off its iconic music platform iTunes, a bloated app that has been clogging up Apple’s software ecosystem for 18 years.

Streaming service Apple Music will take up the mantle, although it can be argued it overtook iTunes as Apple’s primary music platform years ago, as consumption-based models began dominating the consumer market.

And now enterprises are demanding that same level of availability and consistency with the apps they use in their professional lives. Gone are the days of buying millions of dollars' worth of IT assets, sitting them in a spreadsheet and worrying about whether they're going to deliver some tangible value. Clients are demanding providers build the technology assets, make it available to them exactly when needed, charge only for what they've consumed and managed it for them.

2. Increasingly complex IT environments
You can't afford to fall behind in the enterprise technology space. There's pressure to innovate, and while keeping up with fast-paced digital advances. Implementing the latest technologies and platforms without proper consideration and integration into existing systems can spell disaster. It's not worth going alone.

Managed service providers are the ones doing the heavy lifting to reduce complexity across IT systems and tools. Cloud technologies and platforms are getting more complex to manage, especially when you're consuming from multiple IT environments dotted around the world. Several different third parties may need to be involved, creating unique hybrid infrastructures and resulting in complicated IT management. Without proper controls, IT teams will feel pain. That, and businesses may face gaping holes in IT security.

Typical feedback from CIOs is that they want employees to focus on solving business problems, not managing technology. Increasingly, businesses are handing over the challenging issues in their technology, infrastructure, and process space, so that they can spend time on their own innovation goals. Not only this, there's a rise in enterprises outsourcing the design and creation of their infrastructure environments, setting up long-term, scalable solutions.

3. The growth of 'everything' as a service
The last few years have shown that as consumers, we will gladly pay a price to make our lives easier. The same is true for enterprises. Businesses are getting more comfortable with managed services as the concept of 'everything as a service' takes hold.

There's a rising demand for managed service providers who can offer bundled services that not only address infrastructure and apps – but also tie it all together. It's no longer just about Infrastructure as a Service or Software as a Service, the bundled approach includes security, consulting and other services. More so, managed services with regional specializations and vertical knowledge offer market insights that help support future technology decisions.