The Readers’ Vote: Top Three Trends

OK, I’ve asked folks in the industry to weigh in on what trends they believe will have the greatest impact on the technology services industry over the next few years. Thanks to John Ragsdale, my research colleague at TSIA, for promoting this poll to his readers as well. I identified nine trends that could have significant impact on the industry. A clear majority of the readers believe two of these trends are more likely to change the industry. After that, opinions begin to vary widely.

The overall results of the reader voting are shown in the image below:

As can be seen, there are two trends that the readers feel are very significant:

  • Cloud computing: Impact of cloud computing on product-service revenue mix of hardware companies. I discussed this trend in the previous blog entry: Death of the 99.9999 Value Prop 
  • Social Media: How strong is the preference of technology consumers to use social media platforms to resolve problems? ? As social media applications continue to aggregate users, users are beginning to help each other. We discussed this trend of “crowdsourcing” to solve complex problems at our 2009 conference in Silicon Valley. How will technology service organizations adjust delivery practices to leverage these emerging user communities?

I classified cloud computing as a performance trend because of its potential to impact the performance metrics and results of a technology services business. However, it can also be considered a preference trend because customers may ultimately prefer to consume their technology infrastructure in a cloud model.

Social Media is a clear preference trend that could, in turn, impact the performance metrics and results of many support service organizations. What happens if customers can truly solve complex technology problems by simply consulting other customers?

After cloud computing and social media, the trend that received the third greatest amount of votes was the commoditization of products:

  • Commoditization: Hardware companies are facing continued erosion of product margins. This erosion is putting more intense pressure on service organizations to deliver both revenues and margins. This trend was discussed in Product Provider Perils

Product commoditization has already reached the stage of “quantify” as described in my previous entry on classifying the maturity of trends. Several years ago we predicated this trend. We have been reporting specific examples where it has actually been detected. We have now begun quantifying the impact this trend will have on the margin mix of product companies.

One more note. Several voters wrote in “virtualization” in the” other” category. Like cloud computing, this technical capability could be very disruptive to traditional technology service business models.

So where do we go from here? This list of trends and this poll data will be shared and discussed in several forums. First of all, the TSIA research team will review the data and determine what specific research activities we will attach to these top trends. In addition, I will share this data with the TSIA Executive Board when we meet in December. It will be very insightful to see how the opinions of senior executives from the leading technology companies on the planet align with this data. And finally, I strongly encourage you to consider what these top trends mean to your services business. According to your peers—these are trends you can’t afford to ignore.

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