If technology and service providers (TSPs) are to find success in the next five years, there are six threats they need to navigate that pose a real threat to their business.
This is according to research firm Gartner, which suggests that all the threats focusing on the ongoing wave of disruption are being felt by TSPs in the current market.
Gartner research vice president Rajesh Kandaswamy believes these threats, if ignored, could ripple out and cause providers to struggle through to 2025.
“Over the next five years Gartner expects these forces to accelerate trends and pose problems that will demand providers create new models, products and relationships to survive and ultimately succeed,” he said.
These six threats, according to Gartner, are: geopolitics and world events; customer demand and expectations; emerging technologies and trends; industry dynamics; the challenges from new and existing players and disruptive business models.
1. Geopolitics and world events
Gartner claimed that global players are at the whim of current global trade tensions, particularly the state of US-China relations, which together are expected to have a knock-on effect on product strategies, customer acquisition, business performance management, and corporate development.
“TSPs expecting to approach global markets in 2025 as they do in 2020 will be displaced by competition that incorporates these new realities into their business and operating models,” Gartner's research stated.
Furthermore, COVID-19 has standardised remote working across organisations, but that rise in unchained productivity brings with it negative side effects.
These are expected in the form of loneliness, collaboration and communication obstacles, with the research firm predicting these three issues will be the top workplace struggles for 50 per cent of remote workers.
"TSPs must adapt their talent management strategies to mitigate this risk and be aware that this trend influences not only their employees and contingent workers, but customers and buyers alike," Gartner said.
2. Customer demand and expectations
With the nature of remote working being embraced by organisations, so too does the required technology to facilitate these changes.
Business-driven customers, for example, are expected to drive more purchases, as well as moving faster towards cloud products and platforms, automation and online interactions.
Additionally, the processes around the implementation of said products and services are expected to differ as well, with some technology providers expected to prove the effectiveness of a projected after it has finished.
"Customers who will demand a clearer picture upfront of the value such solutions will deliver will also require technology providers to measure results post-implementation,” Gartner’s research claimed. “Those that can’t prove realised value will fail to grow or renew their customers.”
3. Emerging technologies and trends
With the needs of customers changing, providers will also need to keep up to date with emerging technologies, otherwise they risk missing out on new markets, strengthening their own solutions and staving off competition.
Leaning too far into emerging technologies however poses its own risks, so Gartner advocates for providers to find “the right levels of investments in the right emerging technologies at the right time”.
4. Industry dynamics
Movements within specific industries itself are also likely to pose an issue within the next five years, with Gartner's research finding TSPs will need to be flexible with their strategies, routes to market, as well as the opportunities to collaborate and compete with other providers when the time comes.
5. New and existing players
As industries change, providers will need to change with them. As such, Gartner claimed it is important for providers to keep one eye open for what moves existing competitors are taking, as well as leaving the other eye free to observe new players entering a given market.
Not only will providers need to watch out for opposing businesses, but also how competitive their own offering is, which can involve assessing purchasing models, ease of doing business, customer experience and generational demands and offerings.
Additionally, Gartner claimed that through to 2025, technology products and services will be built by professionals outside of the tech industry.
“In the era where ‘every company is a technology company,’ product leaders will have to compete harder with former non-tech providers, end users and megavendors for market share,” said Kandaswamy.
6. Business models
Gartner also expects that different business models are expected to crop up through to 2025, fuelled by technological advancements, availability of capital and shorter development cycles.
As an example, the research firm predicted that the providers that will come out on top will create generative solutions through combining information, technology and operations over an extended ecosystem. In addition, Gartner has predicted that the fastest growing technology providers will create 50 per cent of their revenue from generative or platform business models that take advantage of cloud computing.
What do providers need to keep in mind for now?
Having an insight into potential future threats can be helpful, but there are some things that providers can do today to stay on top of things.
Read more on the next page...