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IT spend goes up, right alongside the digital skills gap

TechAisle has released their 2022 SMB and Midmarket IT spending forecast.  The space is expected to reach one point two five trillion dollars in 2022.   IT services are the highest proportion of that; Datacenter solutions will exhibit a growth of 4%. Overall worldwide cloud spending within the SMB and midmarket will grow by 21%. By 2025, 43% of global SMB and midmarket IT spending will be in the cloud.  And quoting the analysis, “SMB IT investment is increasing to counter inflation, labor shortage, supply chain concerns and accelerate business transformation through digitalization. SMBs are looking for ways to streamline business and IT processes to best return on existing human capital. “

Meanwhile, LogicMonitor’s research report, The Next-Gen Managed Service Provider,” quotes some key stats:

  • Eighty-eight percent of MSPs have experienced a brownout or outage in the past year.
  • Most MSPs expect most of their end customers to be 100% in the cloud within the next five years.
  • MSP leaders estimate that engineers devote 39% of their time to manual tasks. Eighty-eight percent say these tasks prevent engineers from innovating or advancing strategic goals.
  • The majority of end customers (55%) are spending more and more each year with their MSPs

Just over half of managers in the UK are struggling to find talent with the appropriate technical skills, according to research from Udacity and Ipsos.  The resulting lack of proper skills is delaying digital transformation, with 48% saying projects have been put on hold because of skills gaps.  48% of managers said they are struggling to fill tech-based roles within their company, and some have even complained of losing their staff to more techy firms.

Why do we care?

I don’t think it should be shocking to anyone in IT services that spending increases.     I am pleasantly surprised to hear the numbers indicating that MSPs expect their customers to be fully in the cloud, just as all analysts predict.     That’s inevitable.

Here’s the trick – the market is really good, and the pressure is on for skills.   The need is increasing, yet the immediate needs can’t be filled.    Coupled with the reality of the employee having leverage in the current market… IT services companies had better become good at managing their people.  Spend a lot less time worrying about your tool stack and a lot more worrying about your people.  That’s the real differentiator.