Top Trends in the IT Services Sector

Economic uncertainty complicates the business outlook for professional services firms MSPs. The environment could reinforce cloud projects but curtail large-scale transformation.

FREMONT, CA: The macroeconomic signs are numerous and diverse. Although new U.S. government data indicates the trend may moderate, inflation continues at a rate not seen in decades. Many people think a recession is unavoidable due to rising interest rates.

However, according to revised data from the Bureau of Economic Analysis, the third quarter GDP grew 2.9 per cent. Although some companies have started hiring freezes or fired employees, there are more job openings in high-demand fields like cybersecurity. Businesses evaluate technology purchases more carefully but still want to spend money on the digital tools they depend on.

Next year's IT services market developments will be influenced by these factors, possibly including economic crosswinds rather than headwinds.

The atmosphere is exciting, PwC's cloud and digital lead. For a consultancy firm like theirs, being in the heart of this perfect storm is a historic time if they combine all these different vectors.

Capex Avoidance Influences IT Spend

The economic factors at play will significantly impact IT planning and decision-making, field CTO for FNTS, an MSP with headquarters in Omaha. The company anticipates pressure on technology spending and an impact on how IT groups choose projects.

The rise of cloud services will mostly sustain its current momentum as many firms wish to minimise technology-related capital spending in favour of foreseeable costs.

They predicted that capital-avoidance surrounding backup, storage, and disaster recovery technologies would develop, along with a preference for as-a-service alternatives. Mid-market companies may now more easily afford the price and availability of such as-a-service products.

As customers look to get rid of expensive on-premises systems, the need for customers to optimise ruthlessly is a critical turning point for adopting SaaS, IaaS, and containers. Portfolio reduction helps customers consolidate and optimise years of expenditure on licensing and bloated on-premises resources as the first step toward future cloud migration. These initiatives frequently get underway when a business recognizes it requires a sizable Capex injection to extend end-of-service life contracts and maintain the security and compliance of its aged systems. They don't need to invest a lot of money upfront to acquire capabilities.

But the advantages go beyond saving money. The cloud also makes accessing cutting-edge technology like AI and ML easier. An increase in the rate at which customers will use cloud technologies for AI, ML, and data analytics will continue for years to come.