Tax relief should create much needed opportunity for MSPs to reinvest

Posted by Mike Vizard on Apr 27, 2017 11:14:00 AM

Now that the Trump administration has formally proposed cutting the corporate tax rate by as much as 20 percent, many owners of managed service providers are doing a little happy dance. The fact is most MSPs operate under razor-thin margins that make it difficult for them to be consistently profitable.

Given the precepts laid out in “The Art of the Deal” book written by President Trump almost 30 years ago, it’s unlikely the U.S. Congress will enact the tax plan laid out as is. But there’s no doubt that some form of tax relief is on its way.

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Topics: IT Services Trends

Control over billing matters in the age of the cloud

Posted by Mike Vizard on Apr 25, 2017 10:02:59 AM

Most IT service providers have come to realize that cloud computing is a double-edged sword. On one side, cloud computing makes it much simpler to deliver a wide spectrum of services. On the other, there’s always a danger that cloud service providers (CSPs) will look to cut out the middleman by providing, for example, their own managed services.

At the recent AWS SF Summit conference one of the services most heavily touted during a keynote delivered by AWS CTO Werner Vogel was AWS Marketplace SaaS Contracts. AWS is trying to use this service, which was initially announced last fall, to centralize all the billing for both the infrastructure and applications consumed on its public cloud. As of last week, AWS revealed it now has 70 providers of software-as-a-service (SaaS) applications participating in the program.

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Topics: IT Services Trends

Shift to business intelligence in the cloud makes steady progress

Posted by Mike Vizard on Apr 18, 2017 10:57:48 AM

One of the primary benefits of shifting to the cloud is it makes it simpler to apply analytics and business intelligence (BI) applications against data residing in a centralized repository. Prior to the cloud, most of the relevant data inside any organization was distributed across applications running on any number of servers or devices. The problem is that it becomes difficult to make anything approaching a fact-based decision when the data residing in those disparate platforms conflicts. For that reason, savvier organizations are investing in BI applications that enable them to more easily consolidate data in way that allows them to make better decisions based on data that has been vetted by the organization.

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Topics: IT Services Trends

Docker containers serverless computing set to transform IT services

Posted by Mike Vizard on Apr 13, 2017 12:03:27 PM

As profound an impact as cloud computing may have had on the delivery of IT services, managed service providers would do well to note that the shifting of virtual machines from an IT environment running on premise to shared public infrastructure represents a modest innovation from a technical perspective.

In fact, some ten years since public clouds were first adopted, it’s only now with advances such as Docker containers and serverless computing that we are about to witness IT being fundamentally transformed.

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Topics: IT Services Trends

IDC foresees 10-fold increase in data by 2025

Posted by Mike Vizard on Apr 11, 2017 10:17:49 AM

The fact that an estimated 163 zettabytes of data is expected to be created on an annual basis by 2025 may not come as much of a surprise to managed service providers who already contend with a massive amount of data. But a new report from International Data Corp. (IDC) commissioned by Seagate suggests that the source of that 10-fold increase in data being generated in 2016 will be very different.

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Topics: IT Services Trends

How the rise of SD-WANs benefits MSPs

Posted by Mike Vizard on Apr 4, 2017 10:13:34 AM

Most managed services providers aren't strangers to providing network services. But thanks to increased interest in software-defined wide area networks (SD-WANs) more innovation is now occurring at the edge of the network than at any time in the recent memory of most MSPs.

Historically, the branch office inside most organizations has been served by routers augmented by WAN optimization appliances and stateful firewalls. That approach, however, created something of a kludge at the edge of the network. IT organizations were happy to have somebody manage it all on their behalf. But the costs associated with managing each individual device using a command line interface (CLI) made it a challenge for MSPs to profitably deliver those services.

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Topics: IT Services Trends

Communications service providers make slow but steady cloud transition

Posted by Mike Vizard on Mar 30, 2017 9:59:02 AM

A new global survey of 137 IT decision makers that work for a range of communications service providers finds that the majority are embracing cloud infrastructure to deliver their next generation of services. But even though it may be less expensive to employ public cloud service providers, a full 59 percent of the respondents to the survey conducted by Oracle say they would prefer to maintain control over both their hardware and software even if it winds up being less flexible.

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Topics: IT Services Trends

Survey finds debate over IT buying influence to be spurious

Posted by Mike Vizard on Mar 23, 2017 11:21:44 AM

There’s fierce debate these days over just who in an organization makes the decision when it comes to acquiring IT products and services. For the past several years, many IT vendors have been making the case for focusing on line-of-business executives rather than IT professionals. At the core of that thinking is the simple fact that most IT budgets are only a single-digit percentage of overall revenue, and most of those dollars are already allocated.

Less than 20 percent of the average IT budget is allocated to new products and services. The only tried-and-true way to get the amount allocated to new products to increase is to convince IT leaders that buying something new can be paid for by reallocating IT budget dollars away from something else.

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Topics: IT Services Trends

Blockchain technologies will create raft of IT services opportunities

Posted by Mike Vizard on Mar 21, 2017 10:53:01 AM

As blockchain technologies start to move up the hype curve, it’s only a matter of time before customers start asking IT service providers how and when what amounts to a new way of storing data will be relevant to them.

Pioneered as a means to create an immutable ledger to keep track of transactions involving Bitcoin digital currency, distributed databases that time-stamp data to create a system of record are now being developed for use in a wide range of applications. At the IBM InterConnect 2017 conference this week, Everledger CEO Leanne Kemp described how the startup company is leveraging a blockchain database that IBM has exposed as a service to keep track of where diamonds are shipped.

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Topics: IT Services Trends

The time to address the customer productivity conundrum is now

Posted by Mike Vizard on Mar 16, 2017 11:51:28 AM

One of the primary reasons companies don't invest more in IT is the simple fact that many of them don’t see enough of a material return on that investment (ROI). Due to a range of socio-economic issues outlined by a report from the U.S. Council of Competitiveness, not only has the economic recovery since the Great Recession been slow, actual productivity has been declining for the best part of a decade regardless of investments in IT.

Most IT budgets are a single-digit percentage of the overall revenues an organization generates, usually in the two to three percent range. Assuming most companies turn 10 percent of their revenues into actual profit after taxes, that would suggest that at least 85 percent of the revenues an organization generates gets allocated to fund things other than IT. Obviously, changing the distribution of that allocation is going to require convincing business leaders that additional investments in IT will fundamentally improve the productivity of their organizations.

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Topics: IT Services Trends

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