IT support services are central to ensuring technology stays online and continues to operate effectively. Worth millions of pounds to the UK economy, the IT support industry forms an important part of the UK’s services economy, a section which according to IHS Markit accounts for as much as 80% of economic productivity.
Technology support, in general, is set to continue to grow over the coming years as reliance and demand grows. Gartner estimates that we are set to see IT services grow at a rate of 3.5% over the next three years.
A key driver is an increasing appetite for on-demand and always-on services, fuelling the growth in IT infrastructure and storage requirements. This, in turn, has affected the scale and manner in which technology services are being consumed, increasing the consequences associated with any service outage. Being online and operational has become the norm. Therefore things quickly escalate if any service failures occur.
Operating in the IT channel, organisations in our space have focused efforts on traditional technology solutions, chiefly hardware, software and consultancy sales. In order to attract higher margin business and retain competitiveness, the channel has had to diversify further by steadily strengthening and extending the services portfolio, particularly around support, which continues to be where we’re also seeing the fastest growth. Agilitas research carried out by OnePoll asked which areas channel leaders expected to see the strongest revenue streams in 2020, with the majority of the channel leaders, surveyed answering software and hardware support services.
In recent years, the priorities of customers have altered to focus as much on service performance as on product performance. As-a-service models are providing the means to drive these capabilities by guaranteeing results for end users. Delivered at a single OPEX based cost, we’re seeing increasing popularity for similar models in both the business and consumer worlds, primarily as pricing, service levels and contractual obligations tend to be more flexible and customer focused. Designed to simplify a service at a single cost, their popularity is a result of consumers and businesses being able to outsource or shift responsibility to ensure an action happens. Amazon Prime is a good example, delivering goods purchased online as fast as possible for a single cost of £79 per year.
It seems, however, that this trend is experiencing greater momentum in IT though because of the economic conditions businesses are currently facing. In short, support based delivery models for IT services provide customers with a level of certainty in times of uncertainty.
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With appropriate support services in place, be it inventory management, engineer resource, disaster recovery or technical advice, when things inevitably do go wrong, organisations do not have to shell out thousands of pounds to maintain uptime and business continuity. The growth in IT dependence is well documented, however, as our government continues to grapple with the opportunities and challenges facing Britain outside of the European Union, support services are providing businesses with some level of assurance.
Similar trends are being seen outside of IT and technology. HR and recruitment as-a-service, for example, are also on the rise, arguably enabling organisations to focus on delivering to customers rather than administration or support activity.
In Agilitas’ view, the focus has moved very much in favour of the end user customer. Support services run ‘as-a-service’ are putting customers in control of their spend and therefore results. This, in turn, reduces pressure on businesses as costs can be budgeted months in advance.
Support services are an area ideal for outsourcing. The capital investment required to build what they supply from scratch can be very high, be it inventory, technical resource or IT systems, and because of the competition that already exists, space is often restrictive to new entrants. In the space, Agilitas operates – inventory-as-a-service, organisations looking to manage their own inventory on behalf of customers not only have to make that initial heavy investment but need to commit to a programme of continuous investment in order to retain service levels. In order to succeed IT, hardware stock must be at an optimum level and availability in order to service customers effectively while hitting contractual SLAs
Looking to the future, the core reason behind support service growth will be a move to fit future models of doing business. Research has indicated a potential step change as channel organisations have looked to focus on the areas that they do best – serving their end user customers.