Technology is everywhere
The advance and pervasiveness of technology today is unprecedented. Think about it: technology now touches just about everyone, in every situation. Thanks to the cloud, everything from your groceries to your doctor is available in three clicks or less. Application centricity and the explosion of data have propelled innovation to a new level. And these days consumption is king: users only want to pay for IT when and where they use it.
The pace of this fundamental transformation is only quickening. And the acceleration has driven a series of tectonic shifts in the way technology is consumed and delivered. The IT operating model has grown more agile and more automated, which has in turn put IT in the driver’s seat. Instead of merely supporting the business, IT now drives it.It’s critical to how a company operates and to how that company reaches and services its customers. The new deliverable is the business outcome of that piece of technology, along with the end-user experience it provides.
That’s a lot of change. Yet even amidst these large shifts, technology delivery itself is still very complex.
Choice and flexibility have created an explosion of rapidly changing IT priorities. Application centricity is driving complexity at a scale and speed never seen before. No one has time to master all the changes and stay current on constantly evolving business tides and the skills needed to keep up.
Managed services eats everything
All this change raised important questions for us at Cisco. What’s really going on? What do customers really want? So we did some research I think you’ll find valuable.
We commissioned a rigorous study to determine where and how customers buy technology. We surveyed over 1,000 buyers in 18 different countries and regions around the world. We asked respondents to identify what type of IT infrastructure hardware, software, and services they were purchasing, and which channels they were using to procure them. We also conducted follow-up customer interviews and to further explore the insights we gained.
Our research revealed a massive $113 billion global managed services total addressable market (TAM) across Cisco’s addressable product markets by 2025. Forty-five percent of Cisco’s product TAM opportunity will be sold bundled with a managed service, making it the largest route to market (RTM) for Cisco and its partners.
Now we had undeniable evidence to back up the trend. Customers are flocking to managed services, and they’re doing it because managed services have become the best way to achieve outcomes. Proving once and for all that managed services eats everything.
Our research and the article linked above confirm just how eagerly the technology buying market is adopting managed services. They also show how potentially lucrative it will be for innovative partners looking to pursue managed services opportunities. Simply put, these data insights will help partners strengthen customer relationships, grow their practices, and dominate in the exploding managed services market.
The Age of the Partner has arrived
It’s pretty clear that we’re moving to a world where managed services and as-a-service begin to merge. This calls for an entirely new customer engagement model, one that revolves around partnerships.
That’s why at Cisco we believe our industry is moving into a new age – the Age of the Partner.
In the partnership model, the vendor, partner, and customer all work together with a consistent set of strategic business imperatives rather than a technology stack.
So, what exactly needs to change for IT vendors and managed services providers to drive this collaboration? Partnerships need to evolve around five key operating imperatives: composability, shared risk and responsibility, speed and agility, experience value, and partner orchestration.
I’ll explore these imperatives more in a future blog, but simply put, composability means everything needs to be composable, including putting hardware, software, and services together to support customers of every shape and size. To deliver hybrid, as-a-service models, we must all collaborate and share the risk. Speed and agility are now essential, given that time to market has become a real differentiator for businesses. We must also put a premium on the experience instead of the technology. And finally, we need to place provider partners in the driver’s seat.
There is no one-size-fits-all solution anymore. So, the role of a provider is becoming more important. As a result, providers of the future will be focused on business outcomes, with flexible services delivery, through a combination of methods and capabilities.
We’re very excited about the Age of the Partner at Cisco!
And we’re ready for it too–partnership is in our DNA. Eighty-five percent of our revenue goes through our partners. We have a reputation for establishing ideal partnership models. Our massive partner ecosystem drives innovation, allows for faster scalability, and creates new market opportunities. Naturally, we’re investing, innovating, and collaborating with partners in new ways to grow this opportunity together.
The best is yet to come
I’ll leave you with this thought. At Cisco, we’re certain that our managed services success hinges on our partners’ success. The power is in their hands. And given our renewed strategy for managed services delivery in an as-a-service world, I am certain that the best is yet to come. In fact, we estimate that nearly one in two customers will consume their Cisco technology with managed services by 2025. And the vast majority of them will work with channel partners to make that move.
Want to know more? Find out why more and more organizations are looking to #gomanaged in this short video.
Learn more about Managed Services
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I love this post! It truly reflects the shift of the relationships that clients are looking for.
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