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Managed Services Are Dead, Long Live Managed Services!

by Rene Buest  |  March 29, 2019  |  1 Comment

While driving digital initiatives to grow revenue and business, 55% of business leaders are promoting or scaling digital business, and 51% expect to change the business model in the next three years or are already doing it.

To drive these digital business efforts, 56% of business leaders engage with service providers for long-term development and maintenance. Moreover, service providers have ample opportunities in the area of ongoing support and operations (managed services) to address digital business initiatives. About one in three business leaders (31%) say their organization is planning to engage with a service provider while operating digital business solutions.

By 2023, 63% of global managed service providers (MSPs) will gain their revenue through digital business infrastructure operations (DBIO).

However, generic IT managed services are exclusively related to run, maintain and support enterprise IT environments (e.g. infrastructure managed services, data center managed services, managed workplace services or service desk managed services) – making sure that employees are able to work. But these services do not support a digital business initiative nor solution. The next evolutionary step are cloud managed services. But the majority of cloud managed service providers are still using the cloud to merely take care of enterprise IT workloads, rather than contribute to business outcomes.

Hence, tech CEOs and technology product managers at managed service providers (MSPs) can no longer simply support clients with traditional IT managed services nor simple cloud managed services with a focus on running enterprise IT environments. Instead, tech CEOs and technology product managers must transform their managed services approach to digital business infrastructure operations (DBIO), which enables the direct support of a client’s digital business initiatives. This includes the infrastructure operations of digital business solutions, as well as engagement at the digital touchpoint — everything with a focus on business outcomes.

The Evolution From “IT Managed Services” to “Cloud Managed Services” to “Digital Business Infrastructure Operations”

Digital business infrastructure operations services are ongoing managed services contractually engaged by clients with the objective of managing, operating and continually optimizing the necessary infrastructure that supports digital business solutions and delivers digital business outcomes.

DBIO is bound to specific digital business outcomes that add business value, improve customer satisfaction and increase quality through digital business operations. Hence, while DBIO is complementary to traditional IT operations, DBIO services are managed services tied to specific business outcomes to exclusively support technologies that are used to operate a digital business solution.

The four key DBIO service lines are defined to achieve a client’s maximum overall digital business outcome that is supported with the right mix of digital technologies. Although digital technologies are key to enable digital business initiatives, the day-to-day technology operations, management and optimization of digital technologies are the critical element and core value of DBIO.

Gartner has identified a focused approach to DBIO, which tech CEOs and technology product managers of managed service providers can use to seize the opportunity and refine their traditional managed services approach.

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I am looking forward to talking to you!

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Category: product-life-cycle-management  product-strategy-and-launch-for-tech-ceos  

Rene Buest
Research Director
2 years at Gartner
21 years IT Industry

Rene Buest is a Senior Director, Analyst in Gartner's Tech CEO Research and Advisory team. Primary research coverage is infrastructure services and digital operations as well as managed services and intelligent automation. Read Full Bio

Thoughts on Managed Services Are Dead, Long Live Managed Services!

  1. […] toward the edge to serve customers at digital touchpoints. However, they find it difficult to connect the physical and digital world, so turn to suppliers for expertise and solutions to bridge the centralized cloud and edge […]

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