Managed Services Declining – Wall Street Journal Report

July 5, 2016 — Leave a comment

downgraphIs Managed Services on the Decline?

I’ve Been Predicting This for 2 Years…It’s Here

This week the Wall Street Journal backs up exactly what I’ve been saying. Not that Managed IT, or Managed Services is going away – it’s not.  In fact it will grow. However, it’s the big guys that will profit – Microsoft, Amazon, etc.

Your business might be extremely healthy right now – but health is not always easy to measure. Are you measuring the right things? And if you do have to transition over time, how long will it take?

Big Cloud Providers Are Taking Over

“As more businesses move to the cloud, managed services firms say they’re being forced to change the way they do business”…your competition is “worried about competing [not with you, but]… with Microsoft Corp., Amazon.com Inc. and other big cloud firms,” according to a new report released last week…WSJ

Your clients and prospects, as they get more comfortable with cloud technology, and see larger firms, like Johnson & Johnson, moving their entire operation to the cloud, are starting to go directly to the larger cloud providers – as reported by CompTia this past week.

So while the market is expected to grow about 12.5% annually, you can expect margins to shrink by about 50%!   How healthy will your bottom line be if that happens?

It’s time to start thinking about your value proposition, and the next paradigm shift for resellers…basic IT Managed Services may be coming to an end as your core offering.

© 2016, David Stelzl

 

 

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