Services Providers' Strategic Value Is Under Attack: Here Is How They Fight Back

Services Providers' Strategic Value Is Under Attack: Here Is How They Fight Back

This IDC Market Perspective investigates the competitive environment that has led to the erosion of services providers' strategic value. Services customers today want more for less, with less risk, faster proof of value, more risk sharing, and costs that are directly tied to outcomes through value-based pricing. Provider adoption is also consolidating, with companies now using fewer providers for core services. This document examines how services providers have slipped backward in terms of customers' strategic priority and provides recommendations on how they can fight back. Eric Newmark, group vice president and general manager of Worldwide Services at IDC, said, "Services providers have historically led in strategic technology discussions, and then worked with clients to bring in the technology providers that are needed. The opposite is beginning to occur, which has resulted in customers now turning first to technology firms and public cloud providers. Public cloud providers and technology vendors are now often taking the lead in strategy discussions, only to then bring in traditional services providers later when needed. This modified approach is further contributing to why traditional pure services providers are becoming viewed as less influential."

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