Top 3 Predictions for IT Services in 2022

Sustainability in talent, decarbonization and emerging tech becomes the watchword for IT services

Services is still people, even as compelling new forces like ESG and emerging technologies challenge IT services vendors

Even with a rush of emerging technologies and responses to the pandemic at the forefront of IT services vendors’ strategies and client success stories, the fundamentals of IT services remain rooted in people — in recruiting, training and deploying the right talent to solve IT-related business problems and staff enterprise IT needs. The changes TBR expects in 2022, including new competitors in the war for talent, new opportunities around decarbonization and accelerated adoption of emerging technologies, will not substantially alter IT services vendors’ business models. Differentiation among the vendors, in offerings, capabilities and financial performances, will come more through execution than strategy, at least in the near term. Vendors more adept at pivoting to new revenue streams and more patient with pressured margins will see greater success beyond 2022, provided they are able to adequately navigate talent challenges in the near term.      ​

The vendors that were ahead of the game in 2019 in portfolio and resource expansion around next-generation technology-enabled solutions are experiencing revenue growth improvement in 2021. New growth initiatives, such as around product engineering, supply chain improvement and sustainability, along with steady investments in areas such as hybrid cloud, AI, security, IoT, blockchain and industry-specialized offerings, will continue to expand vendors’ addressable market opportunities and support revenue growth acceleration into 2022. Virtual delivery enables increased productivity but pushes employee utilization to the limits and supports a surge in attrition. Managing talent to market demand, especially as macroeconomic conditions improve and digital exhaustion continues, will be key as IT services vendors strive to ensure service quality requirements are met.​

While the COVID-19 pandemic remains an external factor that can negatively affect IT services spending, subsiding pressures thanks to global vaccine rollouts indicate a potential for continued revenue growth acceleration from the 6% year-to-year revenue growth during the full year 2021 for the 30 vendors in TBR’s IT Services Vendor Benchmark. Moving into 2022, revenues will be driven by a mix of three activities: short-term projects around operational resilience and running businesses; larger transformational engagements that enable clients to improve their business models; and innovation engagements that allow clients to do something completely different — all supported through technology solutions and services.​

2022 IT services predictions

  • Focus on talent management, refined during the pandemic, will recede in a post-pandemic environment
  • The decarbonization shift from promises to actual results opens a massive opportunity for IT services
  • Blockchain winter ends and 5G & edge bloom in 2022, bringing new enhanced revenue streams to IT services

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Telecom Business Research’s 2022 Predictions is a special series examining market trends and business changes in key markets. Covered segments include cloud, telecom, devices, data center, and services & digital.

TBR releases exclusive webinar content from May 2021

HAMPTON, N.H. (June 3, 2021) — Technology Business Research, Inc. (TBR) announces on-demand availability of its May 2021 webinars, featuring discussions on private cellular networks leaders, laggards and investments; IT services market developments; edge computing; and blockchain.

How leading vendors performed in the private cellular networks market in 2020

Principal Analyst Chris Antlitz details exclusive content from our inaugural Private Cellular Networks Vendor Benchmark, including which vendors are growing the fastest and which regions and verticals drove the bulk of private cellular networks investment in 2020.

IT services market rebounding in 2021 after pandemic-caused trough

               Practice Manager Patrick Heffernan, Principal Analyst Boz Hristov, Senior Analyst Elitsa Bakalova and Analyst Kelly Lesiczka discuss IT services vendors’ roads to recovery post-pandemic, the impact of automation adoption in service delivery on vendors’ P&L, and what’s next for vendors’ headcount strategies.

Technology and complexity bring opportunities to services around edge

               Practice Manager Patrick Heffernan, Principal Analyst Boz Hristov and Senior Analyst Nicki Catchpole host a cross-practice discussion on how the complexity of edge computing is impacting digital transformation and creating opportunities for IT services vendors and consultancies.

Transforming the economic engine one block at a time

               Practice Manager Patrick Heffernan, Principal Analyst Boz Hristov, Senior Analyst Evan Woollacott and Senior Strategy Consultant Geoff Woollacott examine blockchain’s impact on buyers’ digital transformation initiatives and discuss blockchain-specific use cases through the lens of a multienterprise business network framework.

TBR webinars are typically held Wednesdays at 1 p.m. EST and include a 15-minute Q&A following the main presentation. To find out what we are discussing next month, check out the Webinars page of our website.

Interested in a one-on-one discussion with one of the above subject-matter experts or a private webinar with one or more of our teams?

Contact us today for more information on our free 90-day trial

Edge computing: 2Q21 insights from TBR’s Services and Cloud teams

Technology and complexity bring opportunities to services around edge

Join Patrick Heffernan, Boz Hristov and Nicki Catchpole for a cross-practice discussion on how the ever-evolving complexity of edge computing is impacting digital transformations and creating opportunities for IT services vendors and consultancies. TBR’s subject-matter experts will discuss edge-specific use cases across multiple industries and unpack implications for partnerships across the full digital transformation ecosystem.

Don’t miss:

  • Key trends driving the evolution and adoption of edge computing, as well as the current state of the market
  • Use cases for edge computing, including those stemming from the COVID-19 pandemic
  • Overview of the ecosystem of partners who come together to support growth at the edge
  • How IT services vendors and consultancies are responding to the uptick in demand for edge computing

Register today to reserve your space

Leading enterprises are planning massive investments in DT over the next few years; 5G implicated in many cases

Leading enterprises are planning massive investments over the next few years; 5G is implicated in many cases

Drivers and Investments

Several early adopter enterprises have opted for 5G versus Wi-Fi 6, portending a market shift to cellular.

Leading retailers (e.g., Walmart and Walgreens) are adopting 5G and edge computing as part of their digital transformations (DT).

Cloud providers (aka webscales) are focused on adding network applications to their cloud marketplace ecosystems to make consumption of networking resources much easier for enterprises.

TBR’s Private Cellular Networks Market Landscape deep dives into the market for private cellular networks. This global report covers enterprises that are investing in private cellular networks as well as all of the major vendors and some nascent players that provide infrastructure products and services in this space. The research includes key findings, key market developments, market sizing and forecast, regional trends, technology trends, vertical trends, use cases, and key customer deals, alliances and acquisitions that are occurring in the market.

Webscales will capture the majority of economic value of telecom edge compute market

Webscales have various initiatives underway that will disrupt aspects of telcos’ business model, posing a direct threat to their connectivity businesses and ability to capitalize on new value created from 5G and edge computing. Webscales’ rapidly expanding presence in the edge compute space and keen focus on private cellular networks — particularly in the U.S. — are prime examples of this trend.

Though webscales are posturing like they want to partner with telcos on new opportunities, edge compute partnerships involving a webscale and telco to date are more exploitative than cooperative in nature. Arguably, the highest profile agreement to date is between Amazon Web Services (AWS) (Nasdaq: AMZN) and Verizon (NYSE: VZ), and while Verizon has touted the monetization opportunities, it is providing little more than site access and network connectivity, while AWS’ intelligent edge capabilities provide the bulk of the customer value. In this relationship, AWS doles out a cut of the revenue to Verizon while holding on to the customer relationship and most of the value that emanates from the use of its platform.

The end state of this competitive dynamic will see telcos capturing even less value as they increasingly offload towers and other sites to towercos and data center real estate investment trusts (REITs), and as webscales own greater portions of the network.

Webscales and data center players invest in India to capitalize on the nascent digitalization opportunity

India has become the epicenter of webscales’ focus and investment among emerging markets due to the country’s large population and growth prospects. Alphabet (Nasdaq: GOOGL), Amazon, Microsoft (Nasdaq: MSFT) and Facebook (Nasdaq: FB) are all investing billions of dollars in equity stakes, infrastructure build-out, applications and platforms customized to meet the needs of the Indian market, and setting up business model structures. Reliance Jio, Bharti Airtel and Vodafone Idea are partnering with these webscales on various projects to realize this digitalization opportunity in India.

TBR’s Telecom Edge Compute Market Landscape, which is global in scope, deep dives into the edge compute-related initiatives of stakeholders in the telecom market, including telecom operators, cable operators, webscales and vendors that supply the telecom market. The research includes key findings, market size, regional summary, technology trends, use cases, operator and vendor positioning and strategies, and acquisition and alliance strategies and opportunities.

2021 will bring more demand, more partnerships, more industry innovation to cloud

Certain uncertainty will accelerate cloud adoption in 2021

Despite living with the COVID-19 pandemic for most of 2020, so much remains uncertain. The timing and impact of a vaccine, whether or not there is additional government stimulus, and the changing economic environment will all have a profound impact on what occurs in 2021, and those are just the factors we know about. This uncertainty is reflected in TBR’s survey of 200 IT decision makers. When asked when they expect the business impacts of COVID-19 will subside, 78% of respondents expect the effects to subside sometime in 2021, but the responses diverge in terms of which quarter of 2021.

As a result of this continued uncertainty, flexibility in business operations and the IT resources that support them is more valuable than ever. Cloud was sought out based on necessity during the initial outbreak of COVID-19, but that behavior will persist in 2021 for two main reasons: flexibility and innovation. The ability to shift resources, enable more remote work, and scale cloud services up and down as needed are value propositions that resonate especially well in the current environment. Innovation is a broad concept and can cross analytics, integration and security realms. More generally, customers see value in the ongoing investments their cloud providers are making and in their ability to seamlessly access those enhancements. For these reasons, customers expect to accelerate their cloud adoption in 2021, regardless of exactly when the effects of COVID-19 subside. They may not know exactly what the business climate will hold, but they understand the flexibility and innovation that come with cloud-delivered solutions will play a role in helping them weather 2021.

2021 Cloud Predictions

  • Industry clouds become the norm
  • Partnership models support cloud demand in new era
  • Containers will challenge the legacy virtualization model

Technology Business Research 2021 Predictions is a special series examining market trends and business changes in key markets. Covered segments include cloud & software, telecom, devices & commercial IoT, data center, and services & digital.

COVID-19 is driving IBM, IT industry to deliver faster ‘edge’ computing

“The use cases for edge computing were already vast and varied prior to the pandemic. Self-driving cars, heartmonitoring devices, crop-sensing machinery and inventory-management sensors are examples that scratch the surface of how the low latency, bandwidth management and advanced analytics afforded by edge computing are valuable in a variety of industries.” — WRAL TechWire

COVID-19 pushes IT architecture further to the edge

The growing impetus for edge computing in a pandemic-burdened world

It is an understatement that the COVID-19 pandemic and resulting shutdowns have dramatically altered the ways individuals live and businesses function. Reliance on networks, infrastructure, the cloud and associated technologies has never been greater, and the effect of such dependence has laid bare weaknesses in existing architectures. The result has been a proliferation of opportunities and use cases for technology to remediate the pandemic-driven impacts to daily life, namely remote work, increased video streaming and surges in virtual collaboration.

Edge computing is one such supporting technology that was already becoming increasingly relevant in a world where low latency, advanced analytics and intelligent data mining were quickly gaining momentum across a wide range of industries. As devices have become more common and require more processing power, an increasing amount of data was already starting to be generated on what is referred to as the edge of distributed computing networks. By sending only the most important and least time-sensitive information to the cloud, as opposed to raw streams of it, edge computing preserves bandwidth, eases the burden on the cloud and reduces cost. The pandemic then serves as the quintessential blanketed use case for edge computing as the benefits provided by computing data at the edge, such as reduced networking burdens and increased processing speed, address many of the issues caused by the sudden spikes in network traffic and burden on systems.

The COVID-19 pandemic is dramatically accelerating digital transformation timelines for many enterprises while fundamentally changing the ways we interact with and consume data. As remote work and self-isolation measures have resulted in a dramatic uptick in the use of the web, cloud computing has become essential to businesses and people’s personal lives. Edge technology has only recently become recognized as a complementary evolution of cloud computing, and adoption of the technology has been more widespread. Previous use cases centered on leveraging edge computing’s core value proposition of alleviating challenges associated with bandwidth, latency and near real-time analytics. The sudden shift in workloads and network traffic, coupled with bandwidth constraints, has shined a spotlight on how the benefits afforded by edge computing can alleviate the challenges created by the pandemic.

IBM Think Digital 2020: Making the case for better together

IBM places hybrid cloud at the center of its digital transformation strategy from both a product and a services perspective

At both the IBM and Red Hat sessions, there was no shortage of content that placed hybrid cloud at the center of digital transformation. Through various keynotes and sessions, IBM’s architectural approach, which places Red Hat as the foundational layer for future innovations, came to the forefront. A key example is the IBM Cloud Paks, which are to IBM Services what Red Hat products are to open-source projects. Cloud Paks provide functionality as a service, making it easy for customers to deploy the middleware functionalities that support solutions and applications. The combination of the advantages of cloud computing with IBM’s trusted ability to manage, update and certify solutions for regulatory compliance enable significant improvements in ability and flexibility. It is an emulation of the Red Hat playbook, albeit with far-reaching implications to the Global Technology Services business.

At the event IBM unveiled the IBM Cloud Pak for Data 3.0, which leverages OpenShift 4.3 to deliver new analytics and data management services. Further, IBM’s Partner Packages is a new incentive program for partners that successfully sell the solutions, underscoring IBM’s desire to facilitate customers’ cloud migrations by combining the expertise of services partners with the flexibility of the Cloud Paks.

However, the hybrid cloud model is anything but confined, and Whitehurst noted that edge devices must essentially operate as little clouds and require the same orchestration and interoperability standards. Edge implications address both the telco and enterprise spaces. Network virtualizations seemingly merge IT and cellular technology (CT) through virtualizing those functions to run on the same common platforms supported by OpenShift. Vodafone Business made the case that it leap-frogged competition in India by building a modern architecture that enabled the company to run IT and CT from the same cloud, delivering better consumer service for voice and extending IBM into the adjacent market of hosting enterprise workloads from the same instance.

IBM Think Digital 2020 made the case that IBM and Red Hat are better together — better together in mixed infrastructure, better together in cloud and AI, and better together in IBM’s and Red Hat’s ways of working. Lastly, IBM and Red Hat are better together with Arvind Krishna as IBM’s CEO and Jim Whitehurst as IBM’s president, as the former can assure customers of the IBM offering road map built on Red Hat’s engine while the latter can instill the operational best practices for managing people, processes and financial metrics for a technology world built increasingly on open platforms and recurring revenue subscription models.