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Digital transformation to help CSPs increase revenue by 19% in 2018: IDC

digital transformation

The demand for cloud services is outpacing the supply due to digital transformation, finds a new IDC survey. Businesses are increasingly adopting cloud services to enable digital transformation across their organizations.

This is boosting the confidence of cloud service providers (CSPs) to increase their investments in new cloud offerings that meet all the customer demands related to applications, infrastructure, managed and professional services.

IDC further said that digital transformation will help 85% of CSPs to generate 19% more revenue in 2018.

“Cloud service providers around the world are rapidly changing their business models in response to unprecedented customer demand, offering a mix of new cloud infrastructure, application, and managed services as part of an agile investment strategy,” said Rory Duncan, research vice president, Cloud Service Providers at IDC.

“What is striking is not only the pace of transformation, but also the variety of offerings coming to market as a result. From managed cybersecurity to performance optimization, the hosting of complex business applications and hybrid cloud are offering the potential for service integration at point of delivery.”

Among the increased investment in cloud services, the security services will account for the largest increase (23%). Further, 38% of the CSPs said that they would pay the most attention to security for achieving business goals in next two years.

64% of CSPs will increase spending on their own IT infrastructure including software, device, and IP development to better compete in the market.

One interesting finding of the survey is that Software Specialists are planning to become Service Specialists to better serve managed service providers (MSPs), CSPs, web hosters, telcos, and system integrators.

Also read: Digital transformation helps telcos move from perish to flourish

“It’s clear that the ‘long tail’ of Tier 2 and Tier 3 service providers is driving growth in emerging service opportunities and regional markets,” said Michelle Bailey, group vice president, general manager and IDC Research Fellow for Datacenter and Cloud.

“We have learned that over 60% of these providers’ client base consists of organizations creating new products or markets as well as those reinventing their businesses – and they need to invest in infrastructure and services to achieve this.”

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