The vast majority of European business leaders expect managed services sales to grow over the next three years, the latest TD Synnex research reveals.
According to the inaugural act of the company Ecosystem Benchmark Reportnearly three-quarters of technology companies surveyed expect to sell more managed services during this period, increasing revenue streams.
Produced in collaboration with research firm Canalys, the report was compiled based on a survey of mid-sized tech ecosystem partners. He found that every service category is expected to grow, with managed services topping the list at 74%.
Professional services are expected to increase for 65% of respondents, followed by consumer-based services. everything as a service (XaaS) (50%), packaged services (44%) and services related to lifestyle products (38%).
The majority of European partners (63%) also expect hardware resale to be fundamental to their business mix, with 25% saying the category will grow and 38% indicating no change.
TD Synnex noted that more than a third of respondents said selling their own intellectual property will make up a bigger part of their business mix over the next two years.
The findings follow a previous report from research firm Gartner in January, which believed that the board and managed services would have the second highest spending growth in 2022 at $1.3 trillion. Even in 2019 before the pandemic, Barracuda MSP research highlighted managed services as offering the greatest revenue potential for channel partners.
“Channel partners are actively growing their service businesses,” said Rachel Brindley, senior director of channels at Canalys. “We’re seeing partners looking to invest across the whole technology ecosystem.”
Most respondents expected growth this fiscal year, with 43% citing security, servers and storage as the top revenue drivers, and 40% saying these technologies are the most profitable. Security tops the list as the most cost-effective technology for European partners, TD Synnex added.
Companies also reported that collaboration is a high-priority growth strategy, with 79% ranking engagement with ecosystem partners as important or very important for future growth.
“In an environment of rapid and continuous technological change, European IT companies need to bring solutions to market faster,” said Andy Gass, Chief Digital Officer at TD Synnex. “Ecosystem collaboration accelerates that time to market, reduces costs, and minimizes technology skills gaps.”
Elsewhere, the TD Synnex report revealed widespread hesitation about the Metaverse. Less than a fifth (17%) of European business leaders in the tech ecosystem said they would offer augmented and virtual reality (AR/VR) solutions by 2024. This is despite IDC’s projection of a $16 billion European investment metaverse market and an expected 150% increase in investments over this period.
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