The Future of the Technology Service Provider Industry
Industry trends shaping future business opportunities.
- You and your customers are constantly in a state of change due to the overwhelming number of unprecedented technology changes and disruptions.
- You need to master your own internal IT capabilities while also productizing your services and intellectual property.
- Customer expectations grow at the pace of technology change, as does the number of competitors that are vying to earn your existing accounts.
Our Advice
Critical Insight
In a quickly changing world, technology service providers need to balance the fear of missing out, enthusiasm for new capabilities, and pragmatism to ensure long-term success for themselves and their customers.
Impact and Result
- Identify business opportunities in a rapidly changing industry landscape.
- Align activities with the industry’s evolution to capability-centric service delivery.
The Future of the Technology Service Provider Industry
Industry trends shaping future business opportunities
Analyst perspective
These are exciting times, and we're honored to be your trusted partner for valuable insight and advice on the technology service provider industry. By using systems thinking to characterize the industry, we have uncovered tangible business opportunities for technology service providers of all shapes and sizes. By categorizing trends as market opportunities, key business drivers, and differentiators, we will help you start a journey to grow your market share, achieve your goals, and unlock sustainable scalability. The intent of this report goes beyond information dissemination, striving to ignite a spark of transformation within your organization.
It is easy to feel overwhelmed by the sheer number of trend reports available on the internet. It seems that every technology vendor has come to the realization that sponsored ads pushing trend reports are a great way to seem relevant. As a research firm, our job is to cut through the noise and bring you a fresh and unique perspective to help propel you forward. By interviewing subject matter experts from around the world and reviewing academic articles, news media reports, and, yes, those pesky industry trend reports, we are proud to offer something distinctly different and valuable to our members.
We know that the industry will need to adjust its strategic mindset to thrive in today's world, especially with the rapid changes and technology innovations traversing all industries. Rest assured that the challenges ahead are catalysts that will drive new opportunities. Thoughtful pragmatism will win the day, and we're here to help you navigate the way forward.
Dr. Justin St-Maurice
Principal Research Director
Technology Service Provider Industry
Info-Tech Research Group
Executive summary
Your Challenge
You and your customers are constantly in a state of change due to the overwhelming number of unprecedented technology changes and disruptions.
You need to master your own internal IT capabilities, while also productizing your services and intellectual property.
Customers' expectations grow at the pace of technology change, as does the number of competitors vying to earn your existing accounts.
Common Obstacles
You need to turn IT into business opportunities. Delivering high-quality service is not part of a corporate cost center, but a central profit generator.
You need to think ahead. Understanding and predicting the impacts of trends is your bread and butter, but you need to balance uncertainty with opportunity.
You need to innovate your business model. Core business delivery, customer relationships, and strategic partnerships are as crucial to success as technology innovation.
Info-Tech's Approach
Perform a broader scan to highlight the demonstrated and relevant trends in technology services.
Help organizations understand the trends to navigate the opportunities and challenges of tomorrow.
Highlight the impacts of the trends on both provider businesses and their customers.
Guide organizations through actionable recommendations and next steps.
Contextualize insights through advisory calls.
Info-Tech Insight
In a rapidly changing world, technology service providers need to balance the fear of missing out, enthusiasm for new capabilities, and pragmatism to ensure long-term success for themselves and their customers.
Core opportunities are emerging for tech service providers
Technology service providers should seize opportunities to specialize and offer depth to meet future needs.
Business Enablers
Information Management
Helps customers handle, process, and secure large volumes of data while ensuring data quality and accessibility
Risk servicing
Helps customers manage and mitigate risks associated with technology and business operations
Business optimization
Helps customers enhance operational efficiencies by redesigning processes and delivering measurable improvements through automation
Evolution of the technology service provider industry
The technology service provider industry has a long history of enabling companies around the world to achieve business outcomes, manage risk, and drive efficiencies through information technology.
TECHNOLOGY CENTRIC [PAST] |
RISK CENTRIC [PRESENT] |
CAPABILITY CENTRIC [FUTURE] |
|---|---|---|
Past state: The technology-centric era was marked by a strong focus on managing and optimizing technology infrastructure.
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Current state: The current risk-centric era emphasizes the mitigation of digital threats through technical, policy, and human means.
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Future state: The future capability-centric era will focus on developing broader business capabilities, with technology as an enabler in human processes.
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The future of the industry: What trends are shaping future business opportunities? |
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The future of the technology service provider industry
Four trends are shaping tomorrow.
Risk Management: Customers want to get on the bandwagon. Are you ready to help them navigate the risks? |
Augmentation by Automation: Everyone needs to do more with less, scale, and be competitive. Are you ready for the next phase? |
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Generative AI (Gen AI) is seen as the pinnacle of technical opportunity and the must-have capability for any business wishing to remain relevant. However, many organizations need to do their homework to understand the risks before getting ahead of themselves. |
In complex environments, automation tools designed to simplify tasks ultimately make the job of the human operator more complex. This paradox has been observed in industrial engineering for over 40 years. |
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Opportunity |
Business Enabler |
Opportunity |
Business Enabler |
Information Mastery: Information is the cash crop of tomorrow. Are you ready for the harvest? |
Service warranties: Cyber warranties are flanking the cyber insurance model. Is this an opportunity for you? |
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Intelligent information management (IIM) enables the digital business capabilities of the future. The digitally transformed will differentiate on their ability to harness data, manage information, and generate knowledge as quickly, effectively, and accurately as possible. |
Cyber insurance premiums have nowhere to go but up. However, the ecosystem is evolving as technology service providers start offering service warranties as part of premium cybersecurity bundles. |
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Opportunity |
Business Enabler |
Opportunity |
Differentiator |
"Most of the traction we are seeing is related to helping organizations understand how to integrate [generative AI] capabilities into their corporate systems and processes. These activities should have a positive impact on service revenue."
Source: TechTarget, 2023
Next step
Leverage this trends report to develop your digital business strategy
The Future Technology Service Provider Industry Trends Report |
Business Context & IT Strategy |
Leverage this trends report for priorities that drive measurable, top-line organizational outcomes and to unlock direct value. |
The future will bring more trends and technologies. Your organization must establish itself as the disrupter, not the disrupted. You must establish a structured approach to innovation management that considers external trends as well as internal processes. Info-Tech's Build a Business-Aligned IT Strategy and Define Your Digital Business Strategy blueprints give you the tools you need to process signals in your environment effectively, build an understanding of relevant trends, and turn this understanding into action. |
Trend 1
RISK MANAGEMENT
AI Management Services
Customers want to get on the bandwagon.
Are you ready to help them navigate the risks?
Generative AI is the toy that everyone wants, but many aren't reading the warning label
Generative AI is getting unprecedented attention around the world, with a remarkable 79% of individuals encountering it in some capacity, either professionally or personally. Its application is especially widespread in the tech sector and North American region ("The State of AI in 2023," McKinsey & Company, 2023). In Quebec, nearly eight in ten employees rely on publicly available Gen AI tools to help with work tasks (KPMG, 2023). On LinkedIn, discussions about AI have increased by 70% across the world (LinkedIn, 2023). Within the technology service provider industry, AI is emerging as the foremost subject of consultation requests.
Most companies are unprepared to leverage this technology responsibly. A recent study by ISACA indicates a mere 10% have established thorough policies for its deployment, and a staggering 86% are not yet adequately prepared to assimilate AI into their operational framework (Cisco, 2023). Less than a third of their organizations view managing AI risk as an urgent concern ("AI Policies Are Low," ISACA, 2023).
Businesses everywhere are experiencing FOMO (fear of missing out) as they witness the rapid adoption of AI technologies by competitors (Forbes, 2023; VentureBeat, 2022). This is fueling a rush to stay ahead in the digital transformation race, with 61% of respondents feeling that they have a maximum of one year to deploy AI to avoid a negative impact on their business (Cisco, 2023). In this environment, businesses are finding it tempting to adopt AI without recognizing the pitfalls of hurried and ill-planned implementation. Balancing enthusiasm with pragmatism is becoming key to maintaining composure and proceeding methodically with AI adoption.
8 in 10 |
Number of users who rely on publicly available Gen AI tools to help with their work tasks |
10% |
Percentage of organizations that have policies in place for Gen AI |
Gen AI is seen as the pinnacle of technical opportunity and the must-have capability for any business wishing to remain relevant. However, many organizations need to do their homework to understand the risks before getting ahead of themselves.
Generative AI is an undeniable opportunity. |
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|---|---|
US$1.3 trillion |
US$4.4 trillion |
Gen AI market size by 2032 |
Estimated productivity impact of Gen AI on the global economy |
Signals
What we are seeing
Businesses want the Gen AI check mark, without the risk overhead.
Clients understand the opportunity but do not appreciate the risk. There is insufficient emphasis on the risks associated with Gen AI ("AI Policies Are Low," ISACA, 2023). According to a recent survey, 43% of chief risk officers suggested pausing or slowing the development of AI technologies until their impacts are better understood (World Economic Forum, 2023).
Generative AI implementations need constant oversight. Gen AI implementations are not set-and-forget applications that can be maintained like traditional infrastructure. Implementations need to be responsible, accurate, and safe for use in various business domains over time, and they must naturally evolve and adapt with each new input (Harvard Business Review, 2023).
We are still learning how to find bugs and vulnerabilities. Recently, a series of experiments successfully coaxed GPT-3 into revealing snippets of its training data. These experiments highlight potential privacy and security concerns, as they could potentially expose sensitive information included in the training datasets (GitHub, 2023).
Cautionary tales
Pak 'n' Save's Savey Meal-bot, aimed at generating creative meal plans, suggested recipes like chlorine gas drinks, bleach infused rice and poison bread sandwiches (The Guardian, 2023).
Despite the rapid development of hundreds of AI tools to assist in the COVID-19 pandemic, none proved effective in clinical settings (MIT Technology Review, 2021).
Zillow trusted its AI algorithm to predict housing prices, buying thousands of homes for resale. Unfortunately, the market's complexity outsmarted the AI, leading to a massive US$304 million loss (CNN, 2021).
Drivers
Why you should care
Your customers are desperate for Gen AI expertise. Businesses are actively seeking experts in Gen AI to guide them through its complexities and its integration into their operations. Make sure that you are informed, trained, and knowledgeable to meet the needs.
You need to showcase opportunities. Illustrating the effectiveness of Gen AI through real-world examples is key to demonstrating its practical value and applicability in various industries. Developing your own intellectual property to entice customers will be a differentiator.
You need to explain risk. It is crucial to inform clients about the potential risks of Gen AI to ensure informed decision making. Clients need to appreciate the ethical, privacy, operational, and reputational risks involved in each implementation.
About Info-Tech
Info-Tech Research Group is the world’s fastest-growing information technology research and advisory company, proudly serving over 30,000 IT professionals.
We produce unbiased and highly relevant research to help CIOs and IT leaders make strategic, timely, and well-informed decisions. We partner closely with IT teams to provide everything they need, from actionable tools to analyst guidance, ensuring they deliver measurable results for their organizations.
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