You know, I thought we should be more optimistic. And maybe we can – but we may not be the majority. US consumer confidence fell to a four-month low in September, indicating that Americans are feeling worse about the economy, with the drop most pronounced among Americans earning upwards of $50,000 annually. Despite the pessimism, there are signs the economy is doing well, with second-quarter growth smashing forecasters’ expectations and the unemployment rate still holding steady at under 4%. That said, that “soft landing” we all hoped for might not be as smooth, as rising pressures like gas prices and student loans could increase recession risks. Americans remain cautious but not panicking. Factors such as the delayed impact of interest rate hikes, reduced spending, pending government shutdown, and potential rate hikes contribute to mounting pressure on American consumers.
With that growth, according to a global study commissioned by Cisco and conducted by Canalys, IT channel partners focused on managed services are expected to see significant growth in 2023. The study reveals that managed services worldwide are projected to grow by 12.7%, reaching a total value of US$472 billion, surpassing the estimated 3.5% growth in overall IT spending. The Asia Pacific region is expected to experience a growth rate of 14%, with India showing impressive growth of 16.1% in managed services revenue. The key drivers of this growth include the increasing demand for cybersecurity, expertise, and flexible consumption models. Cloud infrastructure management and emerging technologies like AI are also identified as growth opportunities for managed service providers.
And Sustainable Tech Partner – aka, Joe Panettieri– argues there is a sustainability angle too, citing this in the report: “Sustainability, which until now has been more prevalent in professional services, logistics, and device management specialists, has become an immediate issue due to new regulations, particularly with the EU’s Corporate Sustainability Reporting Directive.”
While we’re reviewing the market, here are some quick ones:
- A poll conducted by Canalys revealed that 29% of channel partners generate more than 50% of their revenue from the public sector.
- Counterpoint Research shows active smartphone brands have significantly declined from over 700 in 2017 to almost 250 in 2023. The decline is mainly attributed to local brands, while global brands remain consistent.
- According to Canalys, smartphone sales in North America have dropped by 22 percent in Q2 2023, marking the worst performance in a decade. Apple and Samsung both experienced significant declines, while Google’s Pixel phone sales increased by 59 percent. The low-end market suffered the most, with “others” down 43 percent. However, Canalys predicts a slight recovery in 2024 with a projected 3 percent increase.
- A Method Research study for LogicMonitor reveals that current approaches to IT monitoring, especially in hybrid cloud computing environments, are not satisfactory. Nearly half of the respondents have negative feedback about their current monitoring approach. The survey also highlights that much time is spent troubleshooting and reacting to events.
The decline in consumer confidence means two things. First, your customers may see a slowdown. And second, you may need to prove ROI more rigorously. Don’t be surprised. On either count. While managed services look good, there’s still that dependency on, you know, pesky customers being there.
I’m a little less convinced about the sustainability angle. I’ve been burned by Green IT before. You’re much more likely to see an impact if you’re in the EU. That said, I wanted to highlight the opinion.
The dissatisfaction with current IT monitoring approaches is a gap MSPs can fill, especially in hybrid cloud computing environments, by offering better, more proactive solutions. And within monitoring, note that the mobile space has increasingly less diversity of devices and is maturing.. a lot.