Jay McBain Marks Tech Milestone, MSPs Can Cash In

For the first time ever, corporate and government spending on technology services will surpass spending on telecommunication services, a milestone that marks a significant opportunity for MSPs, other technology service providers and vendors. So says Jay McBain, chief analyst at Canalys, and the author of a report he recently posted on LinkedIn. With the right service models and partner programs, savvy tech providers can cash in by increasing their revenue, profits and customers.

That doesn’t mean telco now plays second fiddle. Telecommunications services still represent a huge and profitable business that won’t go away anytime soon.

“Telco services are $1.5 trillion. This isn’t just the old school copper lines and PBX and voicemail systems,” McBain said. “People have to communicate and collaborate across these ecosystems.”

But that ecosystem would not be complete without the technology needed to support today’s global industry, enterprise and SMB. Together, global tech and telco spending will hit $4.7 trillion, with 75%, or $3.5 trillion, sold through channel partners, according McBain’s report. Managed services accounts for $500 billion of that market, with 82% of end-user customers outsourcing some or all their IT, McBain wrote. MSPs represent about one-third of the IT services market.

Jay McBain: Massive Opportunity for MSPs, Other Partners

Canalys’ Jay McBain

“There’s a huge piece of the pie here (for MSPs and other IT service providers) which is two-thirds of $5 trillion in an industry that’s doubling,” he said. “That two-thirds is going to double as well. That $3 trillion in service opportunity today will be $6 trillion by the end of the decade.”

What follows are Jay McBain’s insights on how MSPs, tech service providers and vendors can make more money by adjusting their models to offer end-user clients and channel partners (in the case of vendors) the services and support they need to succeed in the evolving hybrid cloud computing environment. He also talks about the importance of FinOps as an MSP offering, the power of “multipliers” to increase revenue, the financial sense of Microsoft’s partner point system, and other tech and telco opportunities being fueled by the tremendous momentum in those dynamic industries.

See the slideshow above to get started.