IDC Survey: MSPs Face Various Challenges in Managed Cloud Services Market

The roles and opportunities for managed service providers (MSPs) have rapidly become complex as enterprises are continuously transitioning to the cloud. Simultaneously, competition is at an all-time high in the managed cloud service market as organizations expect solutions and leadership from their providers.

The latest survey by the International Data Corporation (IDC) has examined all the necessary service and business requirements that the managed service providers and their ecosystem partners are supposed to invest in to optimize their market opportunities. Moreover, this will also provide them with a competitive advantage in the market of managed cloud services.

Notable Findings from IDC’s Managed CloudView 2021 survey include the following

  • Critical Metrics – Only a few organizations have shifted their applications and infrastructure entirely to the cloud. It can be speculated that the organizations will speed up this process in the coming years with a transition rate varying by industry and country. As per the expectations, the overall cost savings from managed cloud services in 2021 is 40%. It has increased by 3% in a year as in 2019, it was 37%.
  • Enterprise Maturity – Clients are more inclined towards using managed cloud services to drive new revenues, create agile IT, and improve customer experience. However, there are still concerns about ensuring service level agreements (SLAs), security, and performance of IT for critical applications. Organizations have also indicated that they are planning to modify the budget on these services on a considerable note in the next 12 to 24 months.
  • Sourcing Strategy – A greater number of organizations prefer working directly with a managed service provider to take care of their public cloud provider and any assets hosted on the public cloud provider platform. This helps in ensuring top-notch communications and Service Level Agreements (SLAs) are met too. It has also been seen that most of the firms are also inclined toward using the management tools of each public cloud provider.
  • Advanced Automated Technologies – 40% of the firms have already started using no-code/low code capabilities as a significant part of their managed cloud services. Another 30 to 35% of organizations are planning to do the same in the next two years. Enterprises are looking for highly efficient IT operations and aligning consumption of IT with individual needs when it comes to utilizing cognitive/AI as a part of managed cloud services.
  • Operational Expectations – Enterprises using managed cloud services consider CoEs (Centers of Excellence) as the most crucial unit to ensure operational excellence. In addition to that, centralized command centers and business units for public cloud providers are equally important in a few sectors. To help reduce carbon emissions from their data centers, various organizations look to cloud service provider.
  • Private, Public, and Hybrid Clouds – On one hand, most of the firms prefer to re-architect their existing IT assets to provide clouds over buying pre-built private clouds. On the other hand, they also like to utilize public cloud services instead of private clouds to meet a series of requirements as a part of managed cloud services. As a part of the hybrid cloud strategy, the role of the public cloud is to provide access to public IaaS cloud capabilities that are missing in the private clouds and meet the requirement for surges in demand.
Photo David Tapper, program vice president, Outsourcing and Managed Cloud Services at IDC
“Ensuring success in the managed cloud services market will require that managed SPs provide a means of adapting their talent, technologies, processes, and organizational structures to meet client needs,” said David Tapper, program vice president, Outsourcing and Managed Cloud Services at IDC.

“Ensuring success in the managed cloud services market will require that managed SPs provide a means of adapting their talent, technologies, processes, and organizational structures to meet client needs; integrate professional services into managed cloud services; emphasize customer centricity; and work with cloud service provider partners to optimize matrix position and market opportunities,” said David Tapper, program vice president, Outsourcing and Managed Cloud Services at IDC. “In addition, they will need to invest in sustainable offerings for the socially conscious customer; create a business operations center; incorporate an intelligent, unified multicloud management platform; implement a robust governance model; and build centers of excellence and labs for cloud platforms.”

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