Skip to main content

Managed Services Momentum Shifts to Mid-Market


While traveling across North America in recent weeks, I've heard about the same two-part trend from multiple sources: Some small businesses are reducing their IT service contracts and delaying outsourcing decisions. But on the flip-side, mid-size businesses are accelerating their move to managed services. These trends are pretty easy to explain.

Consider this: 18 percent of small-business owners in October said they were at risk of going out of business because of economic conditions, up from 9 percent in August, according to an American Express survey involving 602 businesses with 100 or fewer employees.

Even worse:
  • 79 percent of small-business owners said sales are decreasing.
  • About two-thirds of the respondents said the tightening of credit has affected their business.
  • 51 percent said they have had to tap personal assets in order to pay business expenses.
With those concerns in mind, it's increasingly difficult for small business owners to focus on their IT strategies. They're so consumed by cash-flow issues, that they overlook the fact that managed services can deliver predictable, reliable IT services at a fixed monthly cost.

Let me be clear: Small business owners should embrace managed services as a way to improve their own cash flow. But many entrepreneurs will hesitate to do so because they are afraid to make any long-term financial commitments in today's economy.

Mid-Market Managed Services Boom
In stark contrast, mid-size businesses are accelerating their move to managed services. I hear this again and again from CXOs within mid-size organizations, and from managed service providers themselves.

The explanation is simple: Mid-size companies are eager to trim costs. Big, sprawling on-premise application projects are out of fashion. Instead, easy-to-deploy software as a service (SaaS) engagements are the rage.

But that's not all. Mid-size companies are investing in managed security, managed storage, and other basic services that no longer require full-time internal IT employees.

Yes, some mid-size IT staff members are going to lose their jobs as companies outsource more functions to managed service providers. But that was a trend even before the recession kicked in.

Fearless Migration to Managed Services
Instead of fearing managed service providers, IT staff members should closely evaluate their skill sets and develop expertise in such emerging areas as unified communications, telepresence and open source applications.

Nobody is immune to the recession. But mid-market IT managers who keep their skills sharp will mitigate the risk of losing their jobs, and wind up working more closely than ever with managed service providers.

Popular posts from this blog

MCP Governance: The Next Sovereign AI Decision

Every enterprise racing to deploy Agentic AI is making an infrastructure decision it may not recognize as one. When an AI agent connects to internal systems and proprietary content, the protocol governing that connection determines whether the enterprise controls the terms of access or cedes them by default. Model Context Protocol (MCP) has become the standard linking agents to backend data and tools, and it is spreading through corporate technology stacks faster than the governance frameworks meant to secure it.  For CIOs and CISOs, this stopped being a developer tooling question months ago. It is now a sovereignty question: who defines the boundary between an AI agent and a company's proprietary intelligence. The MCP Adoption Security Gap Gartner projects that by 2028, 25 percent of all enterprise Generative AI (GenAI) applications will experience at least five minor security incidents per year, up from 9 percent in 2025. That trajectory tracks closely with how fast MCP has been ...