Changing the IT Services Labor Equation

Posted by Mike Vizard on Sep 29, 2014 9:23:09 AM

Just about everybody agrees that there is a significant shortage of skilled IT talent that is limiting the size of the addressable market for IT services providers. What many IT services providers may not appreciate is how much distributors are investing in helping IT services firms close that gap.

8499223554_c1fc3b888f_b_(1)As multi-billion entities that keep a low end-user profile, IT services firms are increasingly making use of the professional services capabilities these firms provide. Ingram Micro, for example, has a dedicated professional services and training arm, while Tech Data has created a series of TDOnCall professional services offerings.

In general, there are two classes of distributors. Value distributors have been providing IT services firms with access to IT expertise for years. More recently, volume distributors have been offering similar services. With the increased shortage of IT talent in key emerging technology areas, those distributors have been increasing their investments in IT professional services.

The basic idea is that, rather than having to hire their own IT talent, IT services firms can leverage the IT skills of IT people that are actually employees of a distributor. Those IT services personnel show up at a customer site, but identify themselves as being a sub-contractor associated with the IT services firm. That way the end customer doesn’t get confused as to who is the primary provider of the IT services being delivered.

A recent "IBM Business Tech Trends Study" makes it clear that the places where the shortage of IT skills is most acute is in the realms of advanced analytics, mobile computing and the cloud. IT services firms can, of course, invest in training their own people to attain these skills. But that will take time. The professional services offered by distributors fill gaps in the portfolios of IT service providers in a way that can allow them to service demand in these areas that is already accelerating.

The issue that many IT services firms will have to struggle with going forward is to what degree those professional services will be automated. In theory at least, many of the IT services that are being delivered today can be remotely delivered via the cloud by distributors that have the capital resources needed to make those investments. In fact, both Ingram Micro and Tech Data are making major investments in building their own cloud platforms.

Most distributors have no interest in developing a relationship with the end customer. There are, however, exceptions to every rule. A very small number of distributors also have their own IT services arms. The degree to which other IT services providers will view those arms as competition will vary.

In the meantime, in the age of the cloud IT service providers are clearly no longer limited to any geographic area. And with help from distributors, they can not only deliver more IT services via the cloud; they can also put actual feet on the ground whenever and wherever necessary.

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