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Managed IT services have become more comprehensive over the years as a way to augment IT teams and help organizations manage their technology.
Despite the recession intensifying in 2023, 51% of organizations plan to increase their IT budgets in the upcoming year, while only 6% plan to cut back on tech spending. Meanwhile, the managed services market is expected to reach $393.72 billion by 2028, with at least 60% of organizations depending on managed IT services by the year 2025.
As Managed IT continues to evolve and spending shows no signs of slowing down, what should we expect for 2023? Here are the trends to watch for.
A Review of Managed IT Services in 2022
Before we look to the year ahead, let’s review what the biggest trends we’ve seen in the Managed IT services market over the past year.
Shorter and More Specialized Contracts
Managed IT services contracts in 2022 were more immediate and short-term. Customers asked for Managed IT services on a project-by-project basis or to cover an immediate need.
Many projects are now to address specialized problems that a company’s IT team isn’t equipped to handle. For example, we saw an influx of requests in Q4 for Wi-Fi projects involving designing and standardizing networks and deploying gear at remote sites.
Staff Augmentation and Placement
The 2023 State of IT Report indicated that 59% of businesses find it difficult to hire skilled IT workers.
Over the past year, companies have been looking to Managed IT services to provide solutions for their staffing problems. Resignations and onsite requirements caused staffing shortages, and clients were increasingly asking for staff augmentation and placement.
We also saw a lot of requests focused on planning for employees’ return to the office, including expected resignations. As a result, questions about Remote Desktop Support and Business Process Outsourcing were common.
In addition to augmenting staff and providing temporary solutions, 2022 saw many customers asking for full-time placement in remote offices. They wanted staffing to go through their Managed Service Provider (MSP) so that they wouldn’t have to go through their own HR departments.
Now, let’s look at what to expect when it comes to top trends in Managed IT Services for 2023
Trend #1: IT at the Core, Managed IT for Everything Else
The past few years have seen an overall increased reliance on Managed IT services. We predict that this will continue in the coming year.
Critically, we predict that mission-critical IT concerns will continue to be handled in-house, and companies will rely on managed IT services for non-critical tasks.
IT departments have changed over the years, and IT is increasingly a leadership position. IT leaders are now critical parts of company leadership and take a business-first approach to acquire and managing technology.
As leaders, CTOs will continue to rely on managed IT services for non-critical and periphery tasks such as Tier 1 desktop support, patch management and circuit monitoring and remediation.
Trend #2: Working on a Project-by-Project Basis
Continuing what we saw in 2022, we predict that companies will continue to rely on Managed IT services on a project-by-project basis, to address skill gaps or tight deadlines.
We’re seeing an increase in migrations to SaaS and Cloud offerings such as O365/Azure and “Office in a Box” type deployments focused on modernization & standardization of firewalls, WAPs, switches and Access Management.
Although we see a trend towards one-off projects in Managed IT services and away from continuous service, managed services spending shows no sign of slowing down. The 2023 State of IT Report shared that managed services spending in 2023 will account for 18% of IT budgets, which is up from 15% in 2020. The significant piece of IT budget that managed services takes up shows how critical Managed IT services are to today’s IT teams.
Trend #3: Expert Consulting
In addition to contracting Managed IT services for specialized projects, we expect that 2023 will see an increase in companies using managed IT as expert consultants.
We’ve started getting clients asking about best practices regarding their cloud environments. These questions typically lack specialized knowledge, and it’s up to managed service providers to act as consultants.
Utilizing managed IT services as consultants typically come from clients lacking a dedicated security team or limited staff. They contract managed services as a second set of eyes on their setup or to design their setup even if the company decides to do the implementation themselves.
Trend #4: Field Services
We expect to see more situations where companies that have tech needs in remote locations will outsource setup, maintenance, and break fixes to Managed Service Providers (MSP).
Using MSPs to service remote locations is especially useful for customers that have small sites that don’t necessitate full-time employees. By outsourcing the work, they don’t need to pull their core IT team out of their day-to-day work in order to travel to remote locations.
Trend #5: Technology Expense Management (TEM)
With the recession continuing, IT teams will look for ways to cut spending. More companies will look to Consultants or TEMs to assess systems for potential cost savings. These services can help optimize cloud configurations to save money, as well as reviewing contracts and services to reduce spending.
We predict that more specialized expense management services will emerge to meet the need for cost savings in the coming year.
A particular area of focus will be on mobile as the complexity of managing ongoing contracts is a pain point for many organizations. TEM can help reduce overall mobility spend with careful management including compliance review and contract verification. Plus, it often will help identify billing errors or even resolve incorrect invoicing with carriers.
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