Business is booming for professional services as enterprises look to outsource more functions, so they can accelerate digital transformation. It’s exciting stuff, but the pace of change in this market is making it a challenge for many established players to keep up with newer, sometimes more agile competitors.
GigaOm’s State of the Services Economy 2017 survey report sees global professional and creative services revenue growing to $3.8 trillion by 2025, from $3 trillion last year. However, it also found that companies believe that running services organizations has gotten much harder in the last year. About three quarters say the business is changing fast, forcing professional service participants to become more comprehensive, lean and agile in their service offerings.
There are several ways to do this, among them: becoming more global, expanding partnerships, and figuring out how to incorporate the same “as-a-service”-style business models people are demanding to due to cloud. Interconnection – direct, private connectivity between businesses – is going to be essential to make all that happen.
Trending toward disruption
Some trends disrupting the professional services industry include:
- Firms striving for a greater range and depth of services, often due to pressure from clients
- Increased competition from new entrants
- Client expectations for fast growth and scaling of services to meet demand
- An accelerating shift from retainer to project-based work, with shorter contracts and clients in other disrupted industries demanding much shorter completion times
- For longer-term relationships, a shift from hourly to subscription-based models, similar to those used by cloud services.
These trends require professional services organizations to collaborate and subcontract much more frequently. Eighty-nine percent of the GigaOm respondents say access to contractors is important to success.
Many firms are going global, too. Nearly seven out of 10 respondents said they were moving in to new global geographies to drum up business, often at the request of existing clients and to take advantage of area specialties.
The cloud is also becoming much more important for staying agile and improving service availability, and analytics and artificial intelligence will play a bigger role in this category. According to a 2017 Boston Consulting Group, MIT Sloane Management Review study, financial and professional services rank No. 3 and No. 4 respectively, in adoption of AI over five years across multiple industries. Many of the analytics and AI functions will undoubtedly be cloud-enabled.
Be distributed and dynamic
When you combine all these trends it’s clear that interconnection that is distributed and dynamic must play a key role in helping professional services firms compete. A recent market study by Equinix, the Global Interconnection Index, indicates business and professional services firms are all-in on the need to scale their private interconnection capabilities with partners and customers. The Index predicts a 64% Interconnection Bandwidth growth year-over-year for business and professional services firms, increasing to 297 terabits per second of bandwidth capacity by 2020.
Why? Well, the traditional model of centralized company, partner and cloud systems connecting over long-distance WANs or the internet is no longer viable at a time when real-time collaboration and data analysis is critical, and the business environment is increasingly dynamic and mobile and globally distributed. WAN bandwidth is expensive, and no amount of bandwidth will solve the problem of latency. Only decreasing the distance between the various counterparties can do that. That’s where deploying an Interconnection Oriented Architecture™ (IOA™) strategy across your IT infrastructure comes in.
An IOA approach pushes IT services and component systems out to the digital edge, where they can leverage strategically-placed interconnection hubs that bring them closer to users in multiple global metropolitan areas. Within each interconnection hub, company, cloud, partner and network systems interconnect with each other at high speeds over LAN-like, proximate network connections, slashing latency and cost. Enterprises can choose from myriad colocated cloud, network and partner systems, and competitive pricing within those ecosystems reduces costs even more.
Professional service providers can build an IOA framework on Platform Equinix™, which offers nearly 190 global colocation centers in 48 markets, as well as access to more than 2,750 cloud and IT service providers. The Equinix professional services ecosystem includes more than 350 companies worldwide, including four of the top 10 professional services providers.
To find out more about how an IOA strategy can help professional services firms grow, check out our Professional Services Industry Solution Brief.