Managed IT Services: Top Reasons Behind the Rise in 2022

Salt and FuesselCloud Computing

Managed IT Services is a growing industry. The global managed services market size is predicted to reach USD 267.35 billion in 2022, and with the growth rate of the Australian IT Services Market currently at 9.2%, it’s estimated the value of the Australia Market will be $44.3 Billion by 2025.

Despite predicted growth, it’s not necessarily smooth sailing for managed IT service providers (MSPs) as technology and clients’ needs change at a rapid pace. Keeping on top of change and ensuring managed services staff can meet client expectations will be the biggest challenges MSPs face as they continue to grow in 2022 and beyond. The very nature of the services offered is set to transform, yet MSPs are expected to also continue to offer existing niche on-premises services at the same time.

So let’s have a look at some of the current trends in managed IT Services, and how we see the industry changing in the near future.

Managed Service Providers will diversify their service offerings

One effect of the pandemic has been to jolt businesses out of comfort zones. Enterprises across industries have had cause to add or diversify income streams, and/or change aspects of their business models entirely.

Providers of managed IT services are no exception. Whilst it may appear we’re in a safe zone since we supply services to other businesses, many of us will have experienced secondary impacts to those experienced by our clients. With clients changing business models, or potentially having reduced budgets to spend on IT solutions, the take up of outsourced IT services may have decreased. Supply chains have also been disrupted across the board, and procurement of hardware may have proven a challenge.

MSPs have therefore pivoted to ensure ongoing viability. A trend will likely be that MSPs will diversify offerings. For example, IT Service Management firms that only provide managed services will be more inclined to morph into hybrid models—offering an expanding range of cloud computing services and IT consulting services like IT project management, IT Strategy and IT resourcing. There will also be an increased emphasis on training staff to provide this ever-increasing range of specialty services, in order to get an edge on competitors.

MSPs will amplify the focus on CX

Whilst MSPs already focus on customer needs as part of their regular managed service offering, they’re expected to ramp up the focus on quality customer experience in 2022.

Why? With Enterprise Service Management (ESM) becoming more ingrained in modern businesses, there’s an expectation that services outside the realm of IT will become better for staff.

Employees desire a streamlined and effortless user experience when they use work tools. Hence, IT Services firms will double-down on improving the IT service experience, but also consider ways to cater to business needs outside the scope of IT.

They will work with other departments to offer services and solutions customised to unique business needs, or personalised for particular users, in a way that is not jarring to the user. Services will be consolidated when possible, to create a smooth user experience.

Managed IT Service Providers will invest in their own

With constant advances in technology, it’s an ongoing challenge for managed IT service firms to find and retain specialised IT professionals. Given it’s a job-seeker’s market, it’s not always easy to entice people with the right skill-set, especially when they may be receiving competitive offers elsewhere.

With this challenge in mind, more managed IT services firms will focus on staff retention, and on providing their consultants with opportunities for further training so that they can increase their number of certifications. (This may include specialised training provided by vendors.) This way, IT services providers know their staff are skilled in new specialisations before dispatching them to clients.

Managed IT Service Providers will provide deep thinking on digital transformation

In 2022, the move to digital services is set to continue, with most SMBs endeavouring to take on digital transformation in order to stay competitive. Businesses without the internal expertise to process such transformations will look to IT consulting firms for help in seeing their projects through the complex stages of moving to digital.

In a recent TechTarget article, it’s suggested SMBs will seek out virtual Chief Information Officers (vCIOs) to assist them with moving forward with digital projects. From the perspective of an IT service firm, such a role may be allocated to one, or a collection of specialist IT consultants, who will help not only with technology adoption, but also with strategic planning activities, such as reviewing the risks of adopting new tech, developing cybersecurity plans, introducing hybrid work environments, and controlling ongoing expenditure.

In this regard, professional consultants from managed IT services firms will take more of a deep-dive into understanding a business’s true goals, what they need, and what the ongoing business risks are, before they commence work.

Managed Service Providers morph into Cloud Service Providers

IT Services firms currently face the reality that many clients are purchasing technology directly from online marketplaces, rather than using the MSP’s procurement services—thus removing a potential revenue source that was once lucrative for MSPs.

Whilst losing this revenue stream may seem unfortunate, MSPs are discovering that clients still need ongoing support managing their cloud computing services.

Hence, it’s expected that more MSPs will offer cloud services management in place of, or in addition to, traditional managed IT services and procurement, (meaning they may, in the most part, become Cloud Service Providers, or CSPs.) There will be less emphasis on IT hardware and software sales, and more on providing great customer experience across the span of a client relationship.

A 2022 CompTIA report into trends in Managed Services 2022 also predicted that more MSPs will:
align themselves with third-party cloud services, offering added assistance to manage customer workloads across multiple cloud environments, and focus on providing high-end security services that will allay concerns amongst customers about the safety of using the cloud.

AI for automation will go mainstream

There’s an ever-growing demand from businesses to deliver faster, more cost-effective services, and one way of achieving this is by automating business processes to reduce repetitive tasks.

AI is set to help with this automation process, however there are challenges with getting AI to deliver on ROI. Introducing automation through AI can be costly, and requires specialised skills to succeed. We often see that businesses have the best of intentions to deliver automated solutions, but the level of expertise required to achieve this and the amount of work involved, has left many automation projects hanging.

MSPs are increasingly being sought to step in and help with getting automation projects that are on hiatus to launch, or to guide new automation projects from inception to delivery.

In a recent article published by appen on the connection between managed services and AI, they mention the following examples where managed IT services will assist with the development of AI for automation.

  • Data Collection and Annotation– MSPs handle the end-to-end data preparation pipeline, including collection and annotation processes.
  • Model Development and workflow management– MSPs offer support during model development phases and manage workflows during the build.
  • Security assistance– MSPs offer security assessments, data protection and compliance surveillance.
  • IT Support– MSPs offer ongoing IT support to reduce workloads for onsite staff.
  • Analytics and Monitoring– MSPs take care of analytics needs by offering ongoing key metrics monitoring, pre and post deployment.

For more on predictions for AI automation, this MicroFocus article shares further insights.

Managed IT Services to support solutions for remote workforces

The very existence of managed IT service providers has shown businesses that important IT services can be provided offsite. If a business was already working with an MSP, they were likely already working to a degree in the cloud, and the transition to remote work when the pandemic hit was less jarring.

If a business wasn’t set up with remote work IT solutions, the pandemic required their urgent assembly. To get these integral systems up and running quickly, external IT service providers were brought into the fold.

In 2022 and beyond, it’s predicted the embrace of remote working solutions will continue. The genie is out of the box for industries where remote work is viable. Businesses have realised that staff can work effectively outside of the business’s physical premises, (and they can reduce office rental expenditure and its accompaniments at the same time).

External IT service providers will play a key role in helping businesses optimise productivity, by assisting with introducing new remote working tools, such as virtual desktop infrastructure (VDI), and creating user experiences that support off site workers.

Agile methodologies become the standard

Agile project management methodologies have become popular in organisations over the past decade, and this is set to continue, with more projects being conducted using agile methods.

It’s expected most managed IT Services firms will offer consultants educated in agile methods, so that when they enter a workplace, they can operate with an agile mindset, and seamlessly communicate with businesses running agile projects.

Currently, Technetics managed IT services in Melbourne has consultants with expertise in agile project management methodologies like SCRUM and kanban, and in 2022 and beyond, it’s expected that all staff will have agile experience.

Managed IT Services firms will become more accountable

It’s expected that IT Services firms increasingly focus on the collection and analysis of data related to their own productivity, and on reporting this to clients. There will also be more of a focus on agreed outcomes, before work commences.

Why this focus? As the managed services industry continues to expand, it’s increasingly important for individual managed service firms to prove their worth. If they don’t, their competitors will. So ensuring expectations are clear at the outset, and data is captured throughout the entirety of the client relationship, is vital.

In summary,

The future for the Managed IT Service industry is bright, but MSPs need to evolve to cater to changes in the market. MSPs will continue to offer current services, but will expand their range, to cater to the ways in which client businesses are evolving. They will become increasingly focussed on CX, and will become more outcomes-focused, using automated data collection and analytics to report back to clients on the value their services deliver.

Technetics Consulting

For assistance with getting to the bottom of how your business can grow using the latest IT solutions, contact Technetics managed IT services in Melbourne.