How are Regulated Industries using Managed Services?

Government is tightening rules and regulations on data storage and security especially in regulated industries such as healthcare, and financial services. These sectors include doctor’s offices, banks, and credit unions, where sensitive information is collected and stored. Firms in these industries are leveraging the expertise of Managed Service Providers (MSPs) to setup and manage compliant IT environments. Hence, these providers are on the front lines ensuring data security and navigating a myriad of laws and regulations on behalf of their clients.

According to AMI’s Global Model, SMBs across the world are spending almost $63B on remotely managed services, this spending is forecasted to grow at 15% CAGR by 2021. SMBs in regulated industries such as Banking/Finance and Healthcare account for nearly 20% of this spending and is forecast to grow at 12% CAGR by 2021. This represents overwhelming opportunities for MSPs in these industries especially in providing specialized managed services such as security, storage and networking to mention a few.

MSPs serving these industries are handling responsibilities above and beyond handling managed services. The focus is not only on keeping people and systems working, but also on making sure they work in a legally compliant manner. These MSPs typically have a dedicated compliance and security department that stays on top of regulations such as the Health Insurance Portability and Accountability Act (HIPAA), and the Payment Card Industry Data Security Standard (PCI DSS). In case of a successful hack, investigators determine whether the victim organization followed all laws, had appropriate policies and procedures in place, and if the IT department was properly designed and capable of handling the security needs. The aim is to examine if the IT department was susceptible to that breach or hack. MSPs serving these industries need to be diligent and take an active role in encouraging their clients to update their policies and meticulously follow procedures.

A recent study conducted by AMI shows that MSPs are increasingly focusing on these regulated industries to expand their portfolios and customer base. Larger MSPs with more than $10M in annual revenues are forming vendor partnerships with the needs of their regulated industry clients in mind. The top of mind concern for these MSPs while partnering with vendors, be it an Remote Monitoring & Management (RMM) vendor or a Professional Services Automation (PSA) vendor or a hosting platform provider, is to ensure that they carry relevant compliance certifications and audit credentials. In addition, serving regulated industries and demonstrating vertical industry specific expertise allows MSPs to stand out in a crowded, commoditized MSP market. AMI’s MSP Study shows that MSPs focus on services such as Disaster Recovery as a Service (DRaaS), and Archiving as a Service (AraaS) especially in regulated verticals. It is imperative to store/archive historical data as well as to have systems up and running all the time with fast up time in case of an outage.

The stakes are high for businesses as far as security and compliance are concerned. Businesses are looking for ways to offload these cumbersome tasks on experienced partners in order to focus on their core missions. So, MSPs are increasingly targeting these regulated industries that cannot afford to be lenient with their security standards.

~Kunika Sodhi, Associate

HP: Focused on Form and Function

We had the opportunity to attend HP’s pre-launch event where the company unveiled a series of new laptops and workstations to meet the needs of all market segments. HP has shifted its focus to an “Office of the Future” concept with the launch of 13-inch Spectre x360 convertible business notebook. This year, the x360’s fingerprint reader comes embedded on the side of the laptop to provide easy access when in tablet mode. AMI’s Global Model predicts that, within the SMB Market, 2-in-1 PCs will surpass growth of Desktop PC and Notebook PC spending achieving a CAGR of 22% by 2021. SMBs are quickly adapting new technologies and spending towards multi-functional devices and certainly Notebook and Desktop PCs are no exception.

The second generation Spectre 13 is a design marvel and as HP claims it is the world’s thinnest touchscreen laptop with an optional 4K display. The all new “Ceramic white” finish looks great, which is made from aluminum that has been treated with a smooth white coating. Spectre 13 ships with eighth-generation Intel processors and HP is promising up to 11 hours of use. HP is positioning the Spectre 13 amongst high-end laptops with cutting edge technology and even better design than many of its competitors.

In the desktop series, HP launched the EliteOne 1000, a new all-in-one PC. Most parts are hidden in its wedge-shaped base that can be opened to access its storage, RAM, processor and even display which is upgradeable. There are three displays to choose from- 23.8”, 27” and 34” which is a diagonal curved display that provides an immersive and engaging visual experience. This modular design and easily upgradable parts will provide significant benefits to Managed Service Providers(MSPs) as the idea of Desktop as a Service(DaaS) becomes increasingly popular among SMBs. According to a recent MSP research study by AMI, spending is expected to reach $3.4 Billion by 2021.

 

Another new feature HP launched this year is the ability to add HP’s “Sure View” tech which works as a privacy guard to make the screen harder to read by prying eyes. This feature is especially useful for travelling professionals that want to protect their privacy while on the go. Although this feature drains more battery, it can be switched on and off with ease and it works as intended. In the quest of workplace centric design, HP also introduced PhoneWise; an application targeted at business users that provides smartphone notifications on workstations/laptops so you are always connected to your mobile device even when it’s out of reach.

All the user-friendly design changes are part of HP’s new strategy of giving customers exactly what they want. Company is putting lot of efforts into Data collection, Machine Learning and AI to research the web for product reviews, and its regularly conducting surveys to find out what customers want and eliminating red flags by making design changes. Gone are the days of bulky laptops and workstations with multiple components and thick designs. HP is trying to replace the workplace products by bringing beautiful consumer centric designs to the workplace. According to AMI’s Global Model , worldwide spending on Notebooks and Desktop PCs within the SMB segment is expected to reach $71 billion by 2021. Clearly, HP is aiming to win over the business segment with the launch of these flashy laptops and workstations. It is safe to say that with these new features and designs, HP is investing time and money in the right direction.

~Ankit Mehta, Associate

Got MSP?

Managed Service Providers (MSPs) are upping the stakes in the current cloud land grab. By rapidly expanding their portfolio of service offerings they expect to capture larger share of wallet. Their customers are aligned with this approach as they seek out full-service providers able to meet all their technology needs.

A Growing Market

By 2021 MSPs will deliver close to 25% of all technology products and services globally, up from 18% today. This is an impressive business transformation story – thousands of IT resellers and systems integrators (most of them small companies with less than $10M in revenues) have displayed a clear vision and competent leadership in enhancing their organizations’ capabilities and infrastructure to keep revenues growing in this challenging business climate.

The number of MSPs worldwide will grow from 50,000 to 75,000 between 2016-2021, with the total IT products/services they deliver growing from $500 billion to over $1 trillion during the same time.

Their services portfolios, which initially included pure infrastructure services such as storage, security essentials, compute power, web hosting, and application hosting, have now grown to include value add and higher margin services such as disaster recover/business continuity, e-discovery, vulnerability assessment, compliance management, application management, SaaS, and mobile device management among others.

Business Challenges

Despite being in a high growth business, MSPs face tough challenges which require constant attention and fine tuning of their business models. Some of the top challenges are:

  • Differentiating their services from those of other MSPs is a top priority to counter margin erosion and hyper-competition.
  • Absorbing newer technologies, tools, and solutions, packaging them for client consumption, and providing follow up services requires a constant learning and training.
  • Investing in datacenters is yet another critical challenge, which is often detrimental to smaller MSPs.

How Technology Vendors Can Help

Technology solution vendors that are supplying to MSPs can often play a big role in helping MSPs address these challenges. By fully understanding the nature of MSPs operational and business needs, vendors can design their products and programs to enable their MSP customers to win in the market-place.

Key features can be built into products and programs to make them a nuts-to-bolts solution, or packaged to work with other third-party solutions typically used by MSPs. Examples of the types of features that MSPs would like vendors to include in their solutions are:

  • Automation of overall solutions architecture.
  • Automation of customer on-boarding and migration processes.
  • Dynamic and predictive throughput/capability scaling.
  • Performance monitoring and predictive dashboards and controls.
  • Vertical industry-specific sales, marketing, and technical know how.
  • Vertical industry-specific compliance and reporting features.
  • Online university – modular online training videos and certification.

These are some of the insights we have uncovered in our tracking of the worldwide MSP segment. For additional insights and a detailed description of our MSP tracking service and various deliverables click here.

Alternatively, please email John Rezac (jrezac@ami-partners.com) for more details or to schedule a webinar that will walk you through our MSP coverage and insights.

~Deepinder Sahni, SVP

5 SMB Pros and Cons for the Cloud

You take the good, you take the bad, you take them both and there you have, the facts of life. The feeling of nostalgia for that staple of 1980s television The Facts of Life notwithstanding, the good and the bad can be applied to that ever-expanding network we call the Cloud. At an event hosted by Rackspace, your intrepid blogger was brought up to speed on recent developments and how the company is working toward its corporate goal of being “The preeminent IT services company in the world”.  The cloud is the primary focus of Rackspace and numerous competing companies all over the world. There are challenges to face but also opportunities to seize. Let’s look at the challenges that Rackspace identified with the cloud and then put an SMB focused lens on reasons for subscribing or not subscribing to cloud solutions.

All data equal?
SMBs are putting data on the cloud

Top Challenges

The topics on analyst day covered all facets of the Rackspace portfolio and numerous employees shared their subject matter expertise. Additionally, several customers shared stories about their transformation with Rackspace and how their business has changed over the years. The cloud presents both an opportunity to customers as well a challenge and we’ll see that difference in position can be a matter of perspective. Continue reading “5 SMB Pros and Cons for the Cloud”

MSPs to capture $1.0T in ICT spending by 2021

Large numbers have a certain aura to them. We almost disrespect these figures by using abbreviations. One trillion dollars written out looks like $1,000,000,000,000 and for those wondering, such a sum would weigh approximately 10,000 tons (9,071.85 short tons) when carried around in the largest denomination US currency currently in circulation, the ever popular $100 bill. To have such transportation and storage problems… For the sake of preserving the “0” key, we’ll stick to the $1.0T abbreviation for the rest of this piece, but there is no shortening the drive of MSPs to capture an increasing share of global information and communication technology (ICT) spending across the SMB and Large Enterprise space.

MSP spending capture growth
$1.0T in spending capture… that’s a spicy meatball

 

 

 

 

 

 

 

 

 

 

 

How are MSPs winning?

There are a host of factors contributing to the rise in MSP spending capture toward the $1.0T plateau. As with any business, Continue reading “MSPs to capture $1.0T in ICT spending by 2021”

SAP SAPPHIRE NOW – May 2017

SAP Leonardo Tackles Digital Transformation 

SAP has made digital transformation less amorphous by announcing Leonardo – a collection of tools, technologies, and methodologies branded under the “Leonardo” umbrella, that allow for structure in the way businesses can begin to envision and plan for being more digital.

With SAP S4/HANA at its core, Leonardo aggregates IoT, Machine Learning, AI, Design Thinking, Big Data, and Blockchain into a complete system with accelerators (pre-packaged frameworks) for various vertical industries.

Leonardo is clever packaging and branding of multiple technologies and solutions, which will allow businesses to envision and plan the nature of digital transformation they want to undertake and shape. It is an important first step in getting conversations started, and moving business executives away from a state of digital-confusion to structured digital-exploration and activation.

SAP’s Digital Boardroom solution encapsulates how a highly digitized business may work and make data driven decisions in real-time at the highest levels of management.

The go-to-market on Digital Transformation will entail Continue reading “SAP SAPPHIRE NOW – May 2017”

Global Model 2017

Your intrepid blogger wanted to take some time out to give you an update on the Global Forecast Model that AMI uses to track everything from small business spending on IoT hardware in the UK to shipments of smartphones in Brazil. For brevity, we simply refer to it as the GM. Each year, the GM is updated to give actionable insights on the Information and Communications Technology (ICT) space.

Highlights

Aside from the SMB space, which is our primary focus, the GM also provides insights across the entire commercial spectrum as well as the public sector. Home Based Business (HBB), large enterprises (1,000+ employees), and the government and education sectors are analyzed to provide granular insights into the industry. As long as a person is involved, AMI tracks the business. Granted, once Skynet finally goes online, Continue reading “Global Model 2017”

IBM PartnerWorld 2017

Last week, AMI-Partners attended IBM’s PartnerWorld Leadership Conference in Las Vegas, held at the Cosmopolitan Hotel & Casino. The trio AMI dispatched to the desert came back with new insights and information on how IBM is working with business partners to deliver solutions to customers of all sizes. On a less technical yet allegorical front, we also heard stories ranging from catching a cow to hitting an olive tree with a stick. Keep reading to the end for those accounts, but for now, a brief recap from our trip with highlights from a few breakout sessions.

Viva Las Vegas!

As we entered the opening general session, the lighting rigs were shining bright, the music (Elvis of course) was deafening, and the stage was set for speakers to address the crowd comprised of IBM business partners (more than 1,300 from 78 countries), IBM-ers from various units, the press, and analysts – some of whom very closely follow the SMB ICT space. IBM Chair, President, and CEO Ginni Rometty shared her vision for the future of cognitive business and how Watson will touch some 1 billion people by the end of this year. General Manager for Global Business Partners Marc Dupaquier shared highlights of the partner network and IBM announced several new initiatives to help promote success across all partners in what it dubs “The Cognitive Era”. Without the efforts of business partners, IBM is limited in getting its solutions to end users. The need to work with, nurture, and educate partners is critical to success, not only for Continue reading “IBM PartnerWorld 2017”

SAP SME Summit: Highlights and Insights

SAP Provided its Annual SME Update on November 17, 2016 – Key Highlights Included the Following:

  • SAP now has over 250,000+ SME customers worldwide
  • 13,000 new SME were customers added in 1H2016, a 5%+ increase over 2015 installed base
  • 2015 cloud subscriptions and support grew by 82% to $2.3B (SME + other segments)
  • ByD positioning as SAP’s SME cloud offering is also tightly aligned with matching sales motion – partner + e-center led, and appropriately incentivized to focus on SMEs only
  • SME customers have a choice of consumption models – cloud vs. on-prem – between SAP’s portfolio of All-in-One (on-prem), ByD (Cloud), Business One (Cloud and on-prem), and Anywhere (cloud CRM, inventory, mobile, and e-commerce)
  • SAP Digital allows customers to buy online with SAP Anywhere being the key SME product in this category – this selling motion was launched in 2015 and continues to be fortified
  • Referral option added to PartnerEdge Cloud Choice program to expand SAP’s partner coverage

SME and SAP Performance During 2015-16

  • By most measures SAP is performing well in the SME space. A growth of 5% in the installed base within a 6-month period is impressive, given that our internal SME tracking models show the total SME ERP/CRM/HR installed base growing at about 5-6% Y/Y.
  • AMI typically defines SMEs as commercially located firms with 1-1000 employees. When defined as such, we estimate between 5.5 – 5.8 million firms were using ERP/CRM/HR in 2015. This is out of an estimated WW total of 75M SMEs. In other words, WW ERP/CRM/HR penetration is in the 7-8% range in the SME market.
  • When considering firms with 10-1,000 employees, that number drops to between 3-3.3 million firms – micro-businesses being a large chunk of all firms. Corresponding WW ERP/CRM/HR penetration rises to ~25% when micro-businesses are eliminated.
  • Depending on which of these definitions is selected, SAP’s share of the WW ERP/CRM/HR customer base may vary between 4%-8% at a WW level, using 250,000 as the base of SAP SME customers.

Key SME Trends and Concerns

SMEs are solving for 3 big business issues: Continue reading “SAP SME Summit: Highlights and Insights”

SMBs Jumping on the Cloud-Based Managed Services Bandwagon

The rate of change in today’s IT landscape has made it challenging for SMBs to manage IT functions due to tighter budgets and fewer resources. This is pushing SMBs to compensate for their lack of in-house IT capabilities by hiring Managed Services Providers (MSPs) to provide 24*7 IT service and support.

Most MSPs today aim to serve two goals:

  1. To alert their clients about any risk before or when it happens.
  2. To address all the alerts they get.

This approach has resulted in a shift from the traditional “Break-Fix” mentality to a “Fix/Prevent” one where IT issues are addressed before management or employees are disrupted.

Is 2016 the year for Cloud-based MSPs?

The MSP world is changing fast and the latest evolution is the shift to Cloud. According to AMI’s Global Forecast Model, SMBs will spend US$96 Billion on managed services in 2016 growing to US$154 Billion by 2020. To capture this opportunity most MSPs are transitioning towards cloud and hybrid environments by offering services like Remote Monitoring and Management (RMM). This is a great approach as most SMBs have servers that need to be available 24*7 and these servers need round the clock monitoring and management. Apart from RMM, MSPs offer services such as Backup and Disaster Recovery, Help Desk Support and Daily Health Reports to SMBs as they lack in-house resources capable of detecting security flaws or tracking utilization.

In a recent survey conducted by AMI-Partners exploring MSPs’ transformation to Cloud, one MSP stated, “Our cloud business grew from 0 to $3M over the transformation process. It puts us in a good place that we are able to be a single stop shop for SMBs looking for a particular solution, and we can provide that.” MSPs in this study saw their year-on-year revenues grow by 20-30% as a result of this transformation. This raises a question: Will 2016 be the year for cloud-based managed services?

With the increasing popularity of cloud-based services such as XaaS (Everything as a Service), MSPs will be able to provide managed IaaS, SaaS, PaaS in addition to managing security and other services on-premise. Subsequently, cloud vendors like Microsoft, Amazon and IBM are helping MSPs through this transition by providing tools and services such as backup management, 24*7 support and infrastructure management to mention. These tools provide consistency and manageability across blended deployments and deliver improved service quality, and flexibility with hybrid cloud environments.

Security concerns and lack of knowledge is worrying for businesses

A recent AMI study showed that security is the most pressing concern with cloud adoption. One of the most effective ways for MSPs to alleviate this concern is to partner with major cloud providers like Amazon or Microsoft. These trustworthy brands provide benefits such as IP protection and make cloud adoption easier by providing materials such as resource libraries, sales & marketing training, and technical & business support to MSPs. The study also revealed that SMBs are not fully aware of the benefits of cloud. It is important to stress to SMBs that cloud is more secure, scalable and cost beneficial now than it has ever been before.  Moreover, MSPs must assess their customers’ needs and build a value proposition unique in their market.

In order to succeed and thrive in this changing landscape, MSPs need to address these concerns and misconceptions early. With the right strategies and partnerships, there are many opportunities for MSPs.

~Kunika Sodhi, Associate