Greetings from the 2019 ITEXPO in Ft. Lauderdale! This year’s show was yet another excellent experience, especially for the netsapiens team. We were asked to present at the show and offer our expertise on two panels including “How to Create the Right Culture to Increase Your MSP’s Business” and “DIY: Building Your Next-Gen Carrier.”
With almost 200 booths on the show floor, ITEXPO 2019 was truly an industry cross-roads. Together with co-located events like ITEXPO, SD-WAN Expo, MSP Expo & a Blockchain event, we met with a wide variety of industry stakeholders including resellers, VARs, MSPs, mid-market enterprises, and SMBs. For those who missed the show, we’ve compiled a list of our key takeaways to help you identify and adapt to emerging trends.
ITEXPO 2019 Key Takeaways
- Unified Communications Growth is Accelerating
- SD-WAN is Already Commoditizing
- Artificial Intelligence (AI) Hype Continues
- Cloud Adoption Still a Ways Away
- Blockchain Gets Carrier Traction
- Services or Products? Hint- The Answer is Both
- 5G Connectivity
- Broad Offering in a Thin Veil
1. Unified Communications Growth is Accelerating
Over the next two years 57% of channel firms are expected to grow their UC services. Given only 11% of channel firms top revenue producer is UC, you can see the massive potential UC offers.This shift to cloud UC is now being discussed as core to the ongoing digital transformation strategies of MSPs and the end-users they serve. After all, current legacy solutions are just too expensive and lack the critical features modern businesses require. As a result, it’s no wonder we are beginning to see so much focus on the cloud to deliver innovative features.
2. SD-WAN is Already Commoditizing
At netsapiens, we have a keen interest in the rapid growth of SD-WAN since the technology enables a transition from proprietary hardware to software-defined networks with cloud-based management and automation. Certainly, at ITEXPO 2019, there was no shortage of companies offering SD-WAN services or products; what caught our attention, however, was how quickly it has been commoditized. In fact, we saw at least one service provider offering free SD-WAN with the purchase of their Voice & Access solution.
3. Artificial Intelligence (AI) Hype Continues
IBM’s Ben Amaba gave a great keynote presentation, which turned out to be one of the most attended at the show. His focus was on how we all can benefit from Artificial Intelligence (AI) and Deep Learning algorithms. In fact, Ben referenced McKinsey’s survey, noting that the most significant benefits of adopting AI will be seen in the areas of manufacturing and risk-mitigation. We expect next year he will come back and talk about the emerging technology’s holy grails, including self-healing and self-optimization – functions that mobile networks have been doing for years. This would not be surprising since, by 2021, the International Data Corporation (IDC) predicts that emerging technologies such as AI, Blockchain, virtual reality and IoT will account for a quarter of total IT spending globally. Some of the sessions also made it clear that the biggest need for the channel right now is skilled IT professionals. Did you know that the average AI salary is US $239k, according to IBM? Clearly, this is a lucrative sector to get involved in and one that netsapiens is continuing to monitor, especially regarding how this technology can be leveraged to enhance UC offerings. That’s a topic for a different blog, though.
4. Cloud Adoption Still a Ways Away
Another data point picked up was that according to 451 Research, Infrastructure as a Service (IaaS) penetration shows a linear increase with company size by headcount. Among small businesses, the average is around 34%, whereas with large businesses, IaaS penetration increases to upwards of 66%. This trend is also reflected when examining adoption of IaaS solutions from the standpoint of company revenue. Investment in IaaS increases when companies have more budget to play with. The only exception to these trends comes when analyzing company behavior by age – older organizations tend to be more conservative in their approach and are slow to overcome their use of legacy technologies. This should help MSPs and other service providers in better understanding their end-user demographics and how they can best market themselves.
5. Blockchain Gets Carrier Traction
At the show, attendees were reminded that, at the end of last year, AT&T added blockchain technology from IBM and Microsoft to their solutions, thereby creating a shared, secure ecosystem for businesses to automate and digitize their daily operations. Whereas many in the industry conceptualize blockchain as going hand-in-glove with cryptocurrency, the truth is that blockchain, in its own right, has a lot of potential to offer the tech and telecommunications sectors. The potential use cases are diverse and we’re eager to watch this develop further, especially with how it enhances telecommunications network management.
6. Services or Products? Hint – the Answer is Both
It has been a long, slow march for the IT industry from a mostly product-based transactional business to a services-based recurring revenue business. What is clear is that most suppliers are still in the hybrid stage. For those doing business with the MSP demographic, however, the move towards everything-as-a-service is picking up speed. As we have seen, MSPs value flexibility not only in how they offer services to end-users, but also in how they acquire them from their suppliers. This is something netsapiens understands, which is why we are heavily focused on enhancing flexibility for our customers this year.
7. 5G Connectivity
At ITEXPO 2019, 5G hype was everywhere, from both a public and private perspective, because it can offer higher data speeds, greater reliability and an almost tenfold increase over current 4G technology in the number of devices a network can support. As an increasing number of businesses look to adopt UC services, like real-time audio/video collaboration, that they can access from any device wherever they are, the pressure will mount on carriers and network operators to fully bring 5G into fruition.
8. Broad Offering in a Thin Vertical
Focusing on a subset of an industry allows channel firms to move beyond horizontal solutions and become more granular in what they do, becoming the trusted advisor in their niche market. While professional services organizations remain the main focus of internet telephony service providers (ITSPs) and MSPs, they must work harder to differentiate themselves in order to attract and retain clients. At netsapiens, this is one of our core missions – to assist service providers not only by providing best-in-class UC solutions, but also by offering mentorship in how they can establish and maintain unique brands moving forward. You can check out our content on our blog or even download our e-book on Marketing Best Practices for MSPs.
That’s all for now. As always, I hope this was a helpful run-down of ITEXPO 2019. Want to set up a meeting with me? Follow this link and sign up for a date/time. If you have comments or questions, hit us up at email@example.com. See you next time!
Author: Jason Byrne
VP of Product and Marketing at netsapiens