For more years than most IT services firms would care to admit, selling managed services has been an exercise in frustration. As profitable as those services can be, internal IT teams remain firmly entrenched inside most organizations where they exist. In fact, a recent survey of 600 IT professionals released by Spiceworks, a provider of IT management tools, finds that only about 10 percent of the average IT budget is allocated to managed services.
But there is hope. A separate survey of 1,200 IT professionals conducted by ScienceLogic, a provider of IT monitoring software, finds that 62 percent admit they don’t have any visibility into what’s occurring in the cloud.
Given that the number of IT people with hybrid cloud computing experience is fairly limited, it stands to reason that as more organizations embrace hybrid cloud computing they’ll be looking to providers of managed services for additional IT expertise.
Shrinking IT departments
The ScienceLogic survey also reveals that organizations are not only becoming more comfortable with IT automation, a full 41 percent of them plan to reduce the size of their IT organizations. In a similar vein, the Spiceworks survey found that only 25 percent of the IT professionals surveyed said their organizations would increase the size of their IT staffs, which implies that 75 percent either plan to keep the size of those staffs the same or reduce them.
Put all that together, and the future of IT appears to be one where the overall IT environment is becoming more complex but the number of IT people available to actually manage it is shrinking. If ever there was a time when organizations would be open to more reliance on managed services, this is it.
The challenge is that many IT organizations are stuck in a break/fix mentality. Because they don’t truly manage IT as a service, it’s hard for them to conceive that there is a more efficient way to deliver such services. Business leaders, meanwhile, are convinced that because IT is complex they still need IT personnel to be on call in their office, even though when pressed they’d much rather reallocate that headcount elsewhere.
As a result, most managed service providers are still trying to convince business owners that an outside service is both more efficient and more cost effective, usually over the objections of the internal IT staff. It’s only when the IT environment reaches a level of complexity that the internal IT staff can’t handle and the organization refuses to hire additional IT staff, that everyone involved comes to the decision that they need outside help.
Fortunately for MSPs, it looks like those two conditions are starting to finally converge in 2015. Of course, MSPs have heard this all before. But public cloud services are a new variable in the IT equation that is just beginning to make its full impact felt. As such, by the end of this year the number of organizations in need of more managed services should finally achieve critical mass.