New Opportunities for Services Providers Beyond Infrastructure within Next Two Years

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Digital revolution, being powered by Cloud, is leading to disruptive business transformation, with more and more organizations looking for business-centric integrated value -additions for growing and expanding their business, rather than just looking help for maintaining the infrastructure.

As per a study by 451 research on over 1700 respondents spread across 10 geographies, digital transformation is under way, as 41% organizations face significant industry disruption, 54% require significant operations and IT transformation and 42% plan major digital transformation for the next year.

The business goals of companies, enterprises and SMBs have evolved in the digital economy and the next generation business priorities include accelerated time to market with lower business and technology related risks, lower costs, improved product and service quality and increased revenue.

The organizations are living life in the fast lane with market disrupters like Uber or Airbnb, market makers like iRobot, Twitter or Facebook and under reinvention organizations like GE, capturing 52% of the market share. These organizations are undergoing high business and IT portfolio transformation and will migrate and have approximately 55% digital infrastructure within next 2 years.

In 2017, these organizations have allocated 74% of their hosting/cloud services budget for ‘beyond infrastructure’ hosting services and only 26% for infrastructure hosting services. With managed and security services holding steady; application and hosting services decreasing indicating direct to SaaS trend, professional services are the new ‘beyond infrastructure’ category that accounts for 25% of an organization’s spending.

Thus, organizations are spending more on managed infrastructure and services, where hosting or cloud infrastructure is bundled with at least one managed, security or application service. This changing mix of infrastructure, application and security services has given rise to next generation of managed services, where service providers have a two-year window of opportunity till this ‘beyond infrastructure’ spending gets in the steady state mode.

The professional services that address the needs of digital transformation include legacy systems or SaaS integration services, application modernization, backend or frontend integration, compliance and risk assessment, cloud business strategy, cloud platform training, network consulting for cloud environments, workload placement and cloud orchestration and management.

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