According to a recent study by New Relic, IT outages are costing businesses an astounding $76 million annually. The report reveals that every hour of downtime can lead to losses of up to $2 million, and IT leaders are spending a significant 33% of their time addressing these disruptions. The primary culprits behind these outages include network failures, issues with third-party services, and internal software changes. As companies increasingly adopt artificial intelligence technologies, the challenge of managing and visualizing IT systems becomes more critical, prompting a push towards automated observability tools.
In a recent address at the Managed Service Provider Summit, Canalys chief analyst Jay McBain highlighted that, despite a general decline in optimism among managed service providers, they remain strategically positioned within a $608 billion industry. Although fewer providers expect significant revenue growth, with a 14-point drop in those anticipating over a 10% increase, the demand for managed IT services continues to rise. McBain pointed out that managed services now surpass the software-as-a-service industry and are increasingly recognized by vendors as essential partners for maintaining customer relationships. He noted that an estimated 45,000 “pure-play” managed service providers exist, with many diversifying their revenue streams by offering consulting and design services.
CrowdStrike has reported that for every dollar spent on its Falcon platform, partners can generate up to seven dollars in associated services revenue, according to independent research conducted by Canalys. This multiplier is among the strongest in the cybersecurity sector, emphasizing the value of the ecosystem for partner profitability. The study highlights that partners providing end-to-end services, including advisory, adoption, and ongoing management, experience the highest returns, with managed services accounting for nearly 46% of the total value derived from CrowdStrike-related services.
But before you get too swept up in managed services, Mainframe computers are making a resurgence as enterprises ramp up their hybrid IT strategies and adopt generative artificial intelligence. According to Kyndryl’s 2025 State of Mainframe Modernization survey, organizations are reporting impressive returns on investment, ranging from 288% to 362% for their modernization initiatives, while 80% have intensified their efforts over the past year to integrate new technologies. The survey also indicates that mainframes are now considered essential for hybrid IT strategies, with 56% of respondents reporting increased usage of these systems. In fact, 42% are focusing on direct modernization on the mainframe itself, while half are moving towards a hybrid approach, blending on-platform enhancements with cloud integration.
Why do we care?
Let’s connect the dots. Outages cost—New Relic says $76 million a year on average, with downtime running two million an hour. Canalys? They say MSPs are sitting in a $608 billion market, but optimism is cooling. CrowdStrike brags partners get a 7x multiplier in services on top of their product. And Kyndryl? They want us to believe mainframes are back, pulling big ROI numbers.
It’s the same story again and again—the money isn’t in the tool, it’s in the services. Customers don’t pay for a dashboard, they pay for uptime. They don’t care about a license, they care that their business keeps moving. Whether it’s AI, security, or yes, even a mainframe—providers win when they stop competing on software and own outcomes.