Digital transformation projects face expansion hurdles

The pandemic accelerated cloud adoption, but staffing shortages could stall projects without the help of third-party providers; more IT channel news.

Service providers could see more opportunities in the coming months as enterprises, under pressure to digitalize operations, bump into internal staffing shortages.

Recent research from IT services providers indicates organizations have made progress on pandemic-driven digital transformation projects and plan to build upon those initiatives in 2022. However, the labor crunch could slow their adoption of cloud computing and intelligent automation, foundational digital business technologies. Partners could fill the skills gap. Indeed, service providers have spent the past several months gearing up for growth in digital transformation services.

Building on the cloud

The stage has been set for expansion. The cloud shift, which COVID-19 helped accelerate, appears to have reached a significant milestone. More than half of the respondents to a Rackspace Technology survey said they have moved 100% of their applicable IT infrastructure to the cloud. The Rackspace study, conducted in conjunction with Google Cloud and published this week, polled more than 1,400 IT executives.

While 51% of the respondents have migrated all their cloud-eligible workloads, 49% said they expect to move more workloads to the cloud if possible, according to Rackspace, a managed hosting provider based in San Antonio, Texas.

Updating existing deployments will become the priority for companies already deeply entrenched in the cloud. In the next year, technology managers plan to focus "heavily on modernizing their cloud environment," according to an Insight Enterprises poll of 400 IT decision-makers in the U.S. and Canada.  Security is their top priority, followed by IaaS and PaaS managed services, data analytics and BI platforms, SaaS, and cloud monitoring and management, the survey noted.

Looking ahead, AI and machine learning (ML) emerged as the No. 1 technology respondents expect to significantly affect their transformation strategies over the next three years, according to Insight, an IT services provider based in Tempe, Ariz. Companies boosted their adoption of AI, ML and robotic process automation during the pandemic to automate formerly hands-on tasks.

Not so fast

Staffing obstacles, however, hinder further adoption of those technologies.  "Talent shortages are slowing digital transformation timelines," according to a Syntax report published earlier this month. Syntax is a managed cloud provider based in Montreal. Forty-five percent of the 500 senior managers the company polled said they lack the talent to migrate to public cloud. The respondents similarly cited the talent gap as the top challenge when deploying automation, with 55% pointing to a lack of IT staff knowledge or skills.

The in-house staffing limitations could open doors for partners. Ninety-five percent of the managers Rackspace polled said their organizations will depend on third parties to influence their business transformation strategies. And 89% said they expect the number of IT projects assigned to a third party will increase over the next 12 months.

Accenture buys asset management consultancy

Accenture Industry X has acquired T.A. Cook, a German consultancy that specializes in operations and asset management.

The deal bolsters the organization's intelligent asset management business in Europe, said Mike Poland, global lead for intelligent asset management at Accenture Industry X, Accenture's digital technologies business unit. T.A. Cook, based in Berlin, employs more than 100 people. In Europe, the need to boost throughput and reduce the cost of goods sold influences the demand for asset management services, Poland said.

Accenture Industry X generates about $5 billion in revenue. Acquisitions have contributed to the business unit's expansion. In October, the purchase of Umlaut Software Inc., an engineering consulting firm based in Aachen, Germany, added more than 4,200 employees to Accenture Industry X.

General Informatics grows MSP platform

General Informatics, an MSP platform based in Baton Rouge, La., has acquired Versiant, a Charlotte, N.C., services provider.

The deal marks General Informatics' first acquisition outside of Louisiana. Rosewood Private Investments in 2020 acquired a majority stake in General Informatics, with the companies embarking on an expansion plan through acquisitions and organic growth.

Versiant focuses on vertical markets including maritime, logistics, manufacturing consumer products and healthcare. The company's service lines include data analytics and security. Focus Investment Banking, a merger and acquisition advisory firm based in Vienna, Va., was the sell-side advisor to Versiant in the General Informatics transaction.

Other news

  • Kyndryl, the IT services firm that spun off from IBM, has tapped Microsoft and VMware as its first partners. The company foreshadowed the move in a September Securities and Exchange Commission filing, which identified Microsoft and VMware as ecosystem partners. Kyndryl launched Nov. 4 as an independent public company.
  • CyberOne, a cybersecurity advisor and VAR based in Plano, Texas, plans to spin off from CriticalStart, a managed detection and response provider. The move will make CyberOne an independent company with more than $100 million in revenue.
  • Fifty-two percent of MSPs or their customers experienced a ransomware attack in the past year, according to an AvePoint survey of 1,000 MSPs. The poll also found that 53% of MSPs offer backup services for recovering data in the event of data loss, suggesting a services opportunity for those lacking such offerings. AvePoint, based in Jersey City, N.J., is a data management ISV for Microsoft 365.
  • Oomnitza, an IT asset tracking software vendor, inked a partnership with SHI, a technology solutions provider based in Somerset, N.J. The deal lets customers integrate IT asset management and procurement, according to Oomnitza.
  • Recruiting software vendor iCIMS, based in Holmdel, N.J., added a reseller and implementation services program to its channel partner initiative. Program participants include FourVision and SA.global, both Microsoft Dynamics solution providers.
  • Webcon, a low-code platform provider based in Seattle, launched a North American channel program. The program lets integrators use Webcon BPS to help clients digitalize and automate business processes, according to the company.
  • WalkMe, a no-code software provider based in San Francisco, is partnering with Deloitte, which will provide services around the software company's offering.
  • Barracuda MSP, a division of Barracuda Networks, grew annual recurring revenue at a 70% year-over-year clip through August 31. Barracuda MSP cited the addition of Skout Cybersecurity's extended detection and response technology, new Barracuda RMM integrations and the availability of zero-trust network access capabilities for MSPs as factors in the ARR expansion.

Executive appointment

  • Presidio, an MSP and systems integrator based in New York, has appointed Dan Lohrmann as its field CISO for the public sector. Lohrmann was previously chief strategist and chief security officer at Security Mentor and chief security officer for the state of Michigan.

Market Share is a news roundup published every Friday.

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