Adoption Trends in Managed Services Tailored Services Offer Greatest Appeal, Especially in the Mid-Market
Sep 09, 2016
Managed services continue to gain popularity among enterprises, as a means to reduce complexity and gain expert support as they manage their IT environments. To corroborate providers’ reports of managed services acceptance in the market, we turn to the most recent Frost & Sullivan Cloud User Survey.
Based on responses from IT decision-makers, Frost & Sullivan looked at the IT challenges that are likely to drive a managed services decision. We also examined which businesses are adopting managed services and which services they are adopting, as well as what they expect of their managed service providers (MSPs).We present results by business segment and industry, to determine differences in expectations and adoption trends.
We focus particularly on managed cloud services, which are among the most commonly-used managed services for businesses of all sizes. According to the survey, managed cloud adoption will double in the next two years, to 71% of businesses. This popularity underscores the complexity of implementing cloud computing in the business, and the need that many businesses have for expert support. Survey results also showed that, regardless of size or industry, businesses seek out MSPs that can tailor services to meet specific business outcomes, and that are willing to back their services with Service Level Agreements (SLAs) that support specific customer priorities. These are the most critical needs that respondents voiced when considering their choice of a managed service provider.Security, compliance assurance, and support for business continuity and disaster recovery were other key criteria driving the MSP choice.
On the whole, we find that businesses are increasingly requiring their managed service providers to have some “skin in the game” in terms of providing services that meet specific business outcomes. With the ever-increasing competitive landscape, heightened requirements from lines of business, and security threats mounting on a daily basis, businesses are looking for service providers that can help them leverage technology in a way that is most effective for their specific organization.
This is especially true when it comes to cloud utilization. With more than 90% of US businesses seeking outside assistance to help with their cloud strategies and implementations, there is clear need for managed cloud services that offer more support than the traditional, self-service cloud allows. Results from the most recent Frost & Sullivan Cloud User Survey corroborate this.
Providers in the managed service space have opportunity to gain greater market share and customer base by aligning themselves with customer demand. When considering managed service offers, most businesses want to work with providers that will share responsibility for business goals by tailoring services that will help to drive business outcomes. This need is greatest among the mid-market segment, which often faces the same demands, and vies for the same customer set as larger organizations, but does so with smaller budgets and fewer resources. Thus, a managed services partner that is invested in the customer’s success is one that will be highly sought after in the marketplace.
It’s also important to note that many companies, across both size and industry, are less focused on price than factors such as service parameters, security, compliance, and easy visibility. Price remains a factor, but it’s less important than other criteria.
There is also opportunity for MSPs to tailor services based on industry. High tech firms comprise a large segment of managed service users, and they are highly discerning in their choice of provider.
The more that providers can tailor services, or provide offerings that are designed to suit the needs of businesses within different industries or market segments, the greater the likelihood that customers will make a buying decision for managed services.
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