The end of the calendar year is an interesting time for those of us who work in ICT. Many businesses are thinking about budget and forecasting future demand, and many will be purchasing ICT such as computing power and connectivity to meet peak-time capacity needs.
It strikes me that this might be one of the very last years where these discussions are commonplace. The way in which ICT is sold and consumed is already transforming, and that change will accelerate in 2015. The old models of buying ICT infrastructure are slowly but inevitably becoming outdated, and this change has two important effects.
Changing times for traditional hardware vendors
It seems clear that, in 2015 and beyond, the dominance of traditional hardware vendors will be diminished as customers increasingly demand per-use fees, and try to avoid buying their own hardware. Decades ago, large businesses bought their own electricity generators: today they plug into the grid. That utility model is exactly where ICT is going.
Instead of buying, configuring and replacing the hardware on which their services run, many businesses prefer to buy just the services. PBX, WiFi and computing (storage, compute, backup) are all becoming available, internationally, as connected services that “live” inside the network. ICT companies who have poor offerings in this space will need to explain the reason why.
New offerings, with connected services in the ascendancy
As companies lose their appetite for purchasing and maintaining their own ICT, a second major impact is the inevitable market response. That means we can expect a proliferation of pay-as-you-go services, both from new market entrants as well as established organizations. The move towards connected services is actually great news for service providers like eir Business Solutions, because the centre of gravity is moving back to the network, and that’s our home ground.
We were early to recognise our customers’ desire for connected services, and in 2015 we’ll deliver a huge range of services on a subscription-based model — IP telephony, contact centre, IaaS compute, storage and database, and WiFi. Certainly we’ll facilitate customers who prefer to own their hardware, but while those customers account for more than 95% of the Irish market now, we expect that will fall to below 75% of the market within two years.
There’s just no need for customers to buy big infrastructure: at eir Business Solutions we’re buying super-sized infrastructure and simply selling a slice of it to businesses. Connected services are an internationally proven model. Expect to see many more of them in Ireland in 2015.
How do you expect to procure infrastructure in the coming year? Are connected services and pay-as-you-go models part of your plans?