While supporting their digital business initiatives, buyers in enterprises are changing their engagement approaches with infrastructure managed service providers (MSPs) toward transformational outsourcing, and agile workshop deals rather than traditional RFPs. Major outsourcers report that at this point in time more than one-third of deals globally are not based on RFPs anymore. This is based on data we have collected throughout the 2019 Magic Quadrant for data of data center outsourcing and hybrid infrastructure managed services (DCO/HIMS).
By 2022, more than 90% of infrastructure managed services deals will be based on agile workshop engagements rather than traditional RFPs, up from 35% in 2019.
Enterprise organizations increasingly know the infrastructure problem to their digital business initiative, but not the solution. So they screen infrastructure MSPs in advance to create a shortlist of the right partners and to invite those providers to co-create the solution via a workshop-based selection process. Only a few providers (three to five) typically get access to these workshops.
In Europe and North America, already 30% to 40% of managed infrastructure service deals are based on agile workshops, rather than RFPs. This is particularly important as MSPs report that deal value impact is higher than deal numbers, showing high traction in larger deals. On a recognized pipeline of $50 billion-plus service providers, an impact of 40% to 50% of agile deals was reported, up from 10% a year ago.
On one hand, this movement creates a challenge for MSPs that are just reacting to the market. On the other hand, this opens a large opportunity for MSPs that are changing their habits and engagement approaches.
In our research note Market Trends: Digital Business Initiatives Drive Managed Infrastructure Deals Toward Agile Engagements, we discuss the key market trends that infrastructure managed service providers must consider for their customer engagement strategies to adapt to changing customer requirements and winning modern outsourcing deals.
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