Click below for key elements impacting Tech Manufacturers and ISVs
Every company is becoming a services company.
The combination of three key elements is blurring industry-vertical segment boundaries and shaking up the supply chain:
An increasing demand for as-a-service solutions
The need to capture higher margins
As a result, big tech manufacturers and ISVs are morphing into MSPs or vertically integrating with them.
In August 2018 HP acquired Apogee, a Managed Printing Services company in the UK, for $444M, a market that HP says is worth $55 billion worldwide.
ACER, ASUS and Lenovo are successfully commercializing AI-ready, cloud enterprise solutions for smart transportation, smart health, and smart manufacturing as true Managed Services Providers.
Xerox has successfully transformed, over the last few years, from a hardware manufacturer into a services and software business.
Now, they are building on their leadership in the Managed Print Services (MPS) market to deliver “intelligent workplace solutions”. 77% of Xerox’s revenue today is after-sale, recurring revenue.
Every big technology vendor is becoming an as-a-Service company to varying degrees, depending on their digital transformation maturity stage.
Every business is a service business
Philip Kotler’s quote: “every business is a service business” is more valid today than ever before. Modern MSPs are cashing in on that transformation by digitizing their operations.
Now, technology affords them unprecedented operational efficiencies and allows them to grow at scale.
Their own digital transformation is based on two main axes:
Expanding their recurring-revenue offerings to increase ARR
Automating all their cloud and services operations to increase operational efficiency and scalability.
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