4 trends disrupting managed infrastructure services

While corporate data centers supported by managed infrastructure services were once in the background supporting business operations, they have now moved to the forefront of strategic planning and targeted investment decisions.  Infrastructure and operations (I&O) models must change to empower businesses to embrace the digital age, innovate, and integrate their cloud-first strategies.

The end is coming for the traditional infrastructure support model of procuring, provisioning, and supporting in-house infrastructure that enables new and upgraded enterprise software. Innovations, digital transformations, cloud-based infrastructure offerings (e.g., security-as-a-service), and the emergence of hyperscalers are changing the definition of infrastructure and infrastructure managed services.

I&O managed service providers are also changing their go-to-market strategies in reaction to these disruptors.  And companies must also think strategically and plan accordingly to enable this I&O transformation.

Let’s explore the magnitude of each disruptor and its impact in reshaping the very core of infrastructure as it exists today.

1. Digital transformation

I&O towers most impacted: Server and storage support, network, security, application management services (AMS)

As enterprise application providers like SAP, Oracle, and others move their product suites to cloud-based subscription solutions, multiple traditional I&O towers of support materially change.  The largest impact comes from a company’s core investments in servers and storage.  In the case of SAP S/4HANA digital transformations, companies now have multiple hosting options for their SAP infrastructure:

• Stay on-premises and leverage existing internal support teams or an I&O managed services provider (MSP)
• Use SAP to host SAP infrastructure leveraging SAP’s RISE offering
• Engage and contract separately with a hyperscaler for physical infrastructure, while selecting an MSP to support BASIS, cloud managed services, and application support.

Digital transformation to cloud-based application hosting is fundamentally reshaping the AMS support strategies for many companies.  As enterprise applications require the most infrastructure to run and the most effort to support, moving that footprint to the cloud creates an opportunity for companies to reassess their entire application support base and infrastructure support strategies.

This digital transformation move to the cloud affords CIOs the opportunity to look for provider synergies across application management, cloud managed services, remaining infrastructure services, and transformation/migration services.  Key strategic sourcing decisions need to be made upfront to enable transformation.  Transition lead times, product roadmaps, and vendor consolidations all need to factor into those decisions and sourcing strategies.

2. The as-a-service model

I&O towers most impacted: Network, security, data/storage

The push to cloud-based software solutions has spawned a myriad of as-a-service models that each look to leverage software to support traditional I&O functions like network support, security, and data.

Network-as-a-service (NaaS) allows companies to leverage opex-based cloud-based software solutions/subscriptions and move away from the traditional network model of purchasing, deploying, configuring, and maintaining corporate-owned capex investments in network hardware and software.  

In a world that is going fully digital, cloud-based software solutions like this are fast becoming part of a company’s strategic roadmap for adoption as the fabric of I&O connectivity and data flows move in and out of the cloud.  Software-defined wide area networking (SD-WAN) and secure access service edge (SASE) architecture-based solutions are now dominating this space, while legacy network players like Cisco worked to bring their own SaaS bundled solutions to market.

Complementing the wave of NaaS solutions disrupting the I&O model are security-as-a-service solutions.  As sources of solution-based systems move to various cloud platforms, the need for always secure connectivity is also presenting an opportunity for the introduction of security-as-a-service solutions that can remotely secure and manage those connections and data exchanges.

3. Hyperscalers

I&O towers most impacted: Servers/compute, storage

As existing software providers move to SaaS models and new software providers embrace the SaaS model, the hyperscalers (e.g., AWS, GCP, and Microsoft Azure) are providing the infrastructure compute power to host and transact in the cloud.  As the hyperscalers expand their reach beyond partnering with SaaS providers to infrastructure-as-a-service (IaaS), they are becoming the enabler of I&O’s move to the cloud.  While hyperscalers provide the physical infrastructure, companies will still need I&O managed services to provide select I&O support of their cloud-based infrastructure to manage, monitor, and support the applications installed.

4. Innovation

I&O towers most impacted: Application support, service desk/help desk

Last, but certainly no less impactful, is the wave of innovation taking place in the I&O space. Companies need to evaluate tools like artificial intelligence for IT operations (aiops), internet of things (IoT), augmented reality (AR), robotic process automation (RPA), and more.  Factoring these technologies into your I&O strategic roadmap will best position companies to align core capabilities that enable business outcomes through innovation.  Determining when and how these tools will be incorporated into your infrastructure roadmap will have a direct impact on a company’s ability to maximize the benefits of transformation.

Reimagining platforms and services

I&O managed services providers are changing in response to these disruptors and in some cases are reinventing their go-to-market strategies.  They are establishing new relationships with other providers (e.g., Kyndryl’s recently announced partnerships with Microsoft Cloud, VMware and SAP) and acquiring new talent, while also upskilling their employees.

As providers adjust and reinvent, companies also must plan well in advance of business needs to reimagine the platforms and services that will enable business change and improve business outcomes.