2020 has been an eventful year to say the least, but at least it’s good news for the managed services provider industry coming out of it. Gartner predicts that despite the 5.4% slowdown in annual industrial IT spending in 2020 and increased volatility; spending is tracked to be on an upward spiral and is expected to reach $3.8 trillion worldwide in 2021 – an optimistic growth of 4% from 2020. By 2023, the managed service provider (MSP) industry is expected to reach a massive $282 billion by 2023.
A tremendous spur in digitization efforts to enable remote working and deliver essential services, such as education and health as well as hype automation efforts in 2020 are likely to push enterprise software into the strongest rebound at 7.2% in 2021.
The managed services and IT services provider industry is already set up to take advantage of the situation due to its low-cost of operations and the increased demand for enterprises globally to maintain seamless operations with remote management. This is good news especially for providers focused on automation software and cloud-based service delivery as companies accelerate to grow their presence in cloud-based online services and online working platforms out of strategic business viability.
Successful transition to full remote work culture has spurred a massive confidence boost in managing and delivering projects remotely and is projected to give a huge boost to offshore projects as they continue to provide significant cost-savings. Overall, the IT services sector is expected to return to high single-digit revenue growth in 2021-2022 driven both by the necessity of digital transformation and the standardisation of disruptive trends and technologies. Let’s take a look at some of the most exciting projected growth drivers:
Artificial Intelligence
The necessity to interpret and understand the world around us through safe technological mediums with less physical presence and overall human intervention has never been greater. As data collection only gathers momentum, sophistication in artificial intelligence and machine learning algorithms is now a necessity to devise intelligent solutions from parsing massive amounts of data.
Computer vision monitoring has already become de jure in many parts of social infrastructures and essential services the world over and we can expect a spur in better self-learning algorithms to help predict demand and enable basic decision-making without human involvement. As customer behavior patterns changed in 2020, we can expect consolidation and evolution of those behaviors going forward. It will become a necessity for businesses to ‘read’ and understand these shifts, minor and major, to be prepared and stay ahead of the game and businesses will start to have an edge when they are equipped with better business intelligence tools – powered by AI and ML.
AI will also be a massive enabler in healthcare services as it becomes increasingly capable of delivering intelligent assistance remotely, helping in assessment (especially, machine vision and emergency assistance). It will also help us in tracking prevalence of disease, monitoring, and tracking recovery of patients, managing healthcare systems as well as delivering remote health management services.
5G (and enhanced connectivity)
5G is the baseline enabler for all disruptive technologies in Industry 4.0. With 5G, we can expect to see some massive advances not just in connectivity (lower latency, better speeds and more), but also in strikingly new and advanced use cases for Internet usage as a whole. Disruptive technologies depend on the accumulation and processing of massive amounts of data safely and in real-time. This is what 5G networks and other high-speed networks promise to deliver in real-time even with advanced emerging services based on VR, AR, complex ML algorithms, IoT, industrial automation and more.
Internet of Behaviors (IoB)
With disruption becoming the norm in the industry, businesses need to focus on evolving through ‘architecting resilience’, as Gartner puts it. Business resilience can be based on three pillars: people centricity, location independence and resilient delivery. With evolving customer behaviors online, businesses are busy building intelligence tools that let them spot and study these behavioral events. The applications can be as basic as monitoring mask usage in employees and tracking health data. But primarily, Internet of behaviors (IoB) is focused on technologies that use facial recognition, location tracking and big data and associate these with behavioral events, like device usage or item purchase to build patterns and try and predict or/and influence customer behavior.
Distributed Cloud
Perhaps an offshoot of the edge computing movement, distributed cloud focuses on the delivery of public cloud services in locations closer to a business’ actual place of data collection/ business activity. This provides a number of benefits to businesses including lower latency, costs, and more agile infrastructure as well as fulfilling mandatory data residency requirements. Public cloud providers still take care of the operation, governance and evolution of cloud delivery systems, but will continue to evolve to provide distributed cloud services at the ‘point of need’ over the next five years.
Cybersecurity Mesh
The mesh is a mandatory component of the anywhere operations movement. Secure access to digital assets irrespective of location – both of the asset and the user trying to access it – that’s the mesh in a nutshell. In practice, it is a way of separating security policies with actual enforcement through cloud delivery of security services and identity becomes the perimeter of services, not physical or logical locale. So, whether the user is using proprietary hardware/ software or, accessing cloud applications from a device outside operational control (such as, a home computer) – both the proprietary assets and the user are secured by the security mesh.
Blockchain & IoT
As the name suggests, blockchain refers to units of data that can be added together to make a ‘chain’ – without the provision of taking data away or altering it and controlled by a consensus rather than any single entity – making it a highly secure technology. This renders the need for third-party applications to supervise or authenticate transactions null and void. This has exciting applications, especially in finance and banking, and many emerging areas of business and technology.
The Internet of Things (IoT) is already here and poised for exponential growth. In its essence, it involved ‘smart’ devices, i.e., devices that are capable of Wi-Fi connectivity and of talking to users and/or other connected devices through the Internet. These devices are often equipped with sensors to track data for operational intelligence and enables remote management in both local and industrial applications. IoT enables faster decision-making with less human intervention and enables us to maintain many iterative tasks and decisions in both home and the factory floor. Even the most conservative forecasts predict nearly 50 billion interconnected devices by 2030 and the industry is expected to reach 1.1 trillion U.S. dollars in 2022.
Anywhere Operations
Gartner predicts that as early as 2023, nearly 40% of organizations will deliver blended virtual and physical customer, stakeholder and employee experiences using anywhere operations. Essentially, this encapsulates the trend of remote working and anywhere delivery of operations – enabled by cloud, edge computing, distributed infrastructure and high-speed connectivity, like 5G. With customers, workers, vendors and business partners growing increasingly digital and remote for the foreseeable future, anywhere operations is now a business necessity, much like improved business intelligence through AI & ML.
