What does the rise of cloud services mean for the maintenance industry?

11/11/15 | Industry Insights

Shaun Lynn – Agilitas CEO Cloud computing has been one of the largest changes the channel has faced, arguably since the introduction of the internet. In a little under ten years, the cloud has come to dominate much of the IT industry. In 2011, just half of firms used some form of cloud services, compared…

Shaun Lynn – Agilitas CEO

questionmarksCloud computing has been one of the largest changes the channel has faced, arguably since the introduction of the internet. In a little under ten years, the cloud has come to dominate much of the IT industry. In 2011, just half of firms used some form of cloud services, compared to 84 per cent and rising in 2015. As a result, resellers, service providers and maintainers have altered their proposition and services, and as a result we’re seeing a significant rise in ‘inventory as a service’.

While demand for maintenance is still existent, its format has been changed by the cloud. Organisations are housing fewer amounts of IT infrastructure than ever before, and the cloud has meant entire provisions can be outsourced to a provider based almost anywhere in the world.

As a result, we are seeing a reduced amount of on-site systems to support that translates to requiring fewer feet on the street to support those systems. Today, there is more focus steering towards remote support, IT spares availability, as well as businesses and resellers carrying out simpler maintenance tasks through up-skilling their own technical teams.

Cloud services are heavily reliant on large centralised data centres, to which businesses are outsourcing much of the traditional IT burden. According to 451 Research this has meant that organisations are worrying less about hardware failures, shifting more of the burden onto providers. According to some recent Agilitas research on the opinions and attitudes of IT service providers, 54 per cent claimed that their customers could lose anything up to £1m from just one hour of system downtime.

These statistics reflect an evolving market where third party maintainers are repositioning themselves. Demand for on-site engineering support is shrinking, alongside a growth in the use of remote support, and the up-skilling of specialist engineers. Consequently, engineers are needed less frequently on-site. For businesses, this is a much simpler and more affordable way to meet everyday requirements. Instead of providing a carte blanch maintenance package, the third parties are increasingly being called upon to provide assistance on more complex issues and leave the simple hardware break fix issues to a much more commercially beneficial support model.

We’re therefore seeing businesses who have traditionally provided full service maintenance support, focus less on mobile service engineers, and more on growing the professional services and remote technical expertise side of their businesses whilst partnering with IT Inventory specialists to support their contracted hardware infrastructure.

Reseller margins
Customer demand on resellers has altered alongside the changes to maintainers. Previously, resellers were outsourcing most of their maintenance operations, as it wasn’t seen as profitable or practical to manage this for each customer. However, with less field-based engineering resource required, resellers are increasingly looking to go it alone. With less resource and logistical investment required than previously to provide the necessary support to businesses, hardware support can become a more lucrative and potentially profitable source of income if managed correctly.

Resellers’ own engineers will already know their customers, and with fewer call-outs necessary because of the influx of remote technology and flexible logistics models, a more personal and value add service can be provided to the customer.

This changing environment is a reflection of the growth of a new trend in the industry, Inventory as a service. Unlike traditional maintenance support, inventory as a service works to up-skill resellers’ engineering staff alongside providing responsive on-site hardware support as and when it is needed, providing better value for businesses and better margins for resellers.

The cloud has enabled an environment where hardware requirements have changed, and no longer do businesses and resellers want to pay a high price for a service that they can manage themselves, or that can be provided remotely in a more efficient manner. Most IT staff can replace a part, or carry out a simple fix. Inventory as a service aims to support this process, reducing engineer visits, and enabling organisations to self-serve more often and operate seamlessly alongside their cloud based services.

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