MSPs have a lot of things to think about on a daily basis. Customer satisfaction, closing new deals, ensuring the security and availability of customer systems and data. Global economics, on the other hand, isn’t something a lot of MSPs have time to contemplate.
If all you did was read or watch the news you may get a somewhat negative view of the global economic condition these days. However, there is a lot to be thankful for in 2016 and for the MSPs who know how to read the signs, there is a lot of opportunity.
IT Spending
First, IT spending is up. According to Gartner’s annual IT spending forecast, 2016 should see around $3.5 trillion in global IT spending, an increase of about .6 percent from 2015. Now, .6 is not a huge increase but it’s also not a decrease. In 2015, while IT spending was down from previous years, this decrease was a result of the rising U.S. dollar and not a true softening in demand for IT goods and services.
IT Services Spending
Second, 2016 is projected to see roughly $940 billion in IT services spending (according to Gartner). IT services is where managed services and cloud computing fall, and therefore is the most relevant portion of the Gartner forecast for MSPAlliance members.
The $940 billion represent approximately 3.1 percent growth from 20215, which is a healthy increase considering the global economic headwinds. I would attribute this increase to the continued relevance of managed services and cloud computing, as well as the increased demand for security related services.
Public Companies & Global Markets
Now that we know the IT spending predictions, let’s take a look at the stock markets and how they are doing. In a word, 2016 has been rough on the global markets. Softening demand from China, global debt crises, and tepid jobs numbers are among some of the factors contributing to a weak stock market.
The problem with this is that the public companies within the tech sector do help shape the industry, at least in terms of the amount of money they budget for marketing, channel development, R&D, expansion into new geographic markets, etc. If you were to look at the stock market alone you may think the tech sector is not shaping up for a good year, especially some of the more noteworthy tech stocks.
However, this is not an accurate reflection of the global demand for managed services, which still remains high. MSPs throughout the world are reporting, at least to MSPAlliance, that customer demand for additional services is still strong.
Could the public tech stocks impact the MSP market? It’s possible. However, what is more likely is that if the public tech stocks continue to suffer, customer demand for additional IT services will translate into more virtualization and cloud based solutions rather than holding onto old equipment and forestalling migrations or upgrades.
Simply put, the stakes are too high in 2016 for the public markets to negatively influence or hold back demand for managed services. Security, data privacy, and cyber crime are very real threats which can only be mitigated through outsourced assistance from MSPs.