Predictors of Success in the Application Economy: Service Providers’ New Charter

As fast as things change these days, making predictions about tomorrow–let alone for the long term–can be pretty dicey. With that clear recognition, here’s one prediction I can make with certainty: In the days, weeks and months ahead, applications will only grow more strategic. For service providers, this will be a big deal. The only real question is whether this will be a big problem or a big opportunity.

I don’t think there can be any mistaking that applications sit at the intersection of some pretty major trends—mobility, cloud and social, for starters—and the strategic nature of applications is growing increasingly pronounced. Put another way, applications will represent an increasingly strategic asset, whether you work in a high tech company, law office, financial services firm, hospital or any other organization.

The quality, innovation and value that get realized through applications will play an increasingly central role in the future trajectory of a business—and whether there’s a future at all. While this is true in enterprises, the stakes may be even higher for service providers. What role will the service provider play in the application economy? I’d argue that formulating a well-conceived, compelling answer to that question is one of the most vital mandates confronting service providers right now.

Whether you’re working for a managed service provider, telecommunications service provider (telco) or cloud provider, success will hinge on how you adapt to today’s new realities. The business models vary for each of these service provider types. However, those lines are starting to blur, and there is a common theme: Applications will represent the path to differentiation—and away from commoditization. Deliver services that help your customers thrive in the application economy, and your business will thrive. Fail to adapt, and you’ll stand to lose business, market share and relevance.

Following are more details on the opportunities facing each category.

The Opportunity for Managed Service Providers

If you work with a managed service provider, applications are critical and strategic for your customers—which makes IT critical and strategic. However, the old way of running IT won’t enable organizations to innovate their applications as fast as they need to. Enterprise IT teams will need to go through a fundamental transformation, but many organizations are contending with innovation gaps, unable to marshal the talent, resources or expertise needed.

To illustrate, in a global survey of enterprise IT and business leadership (Application Economy Research, CA and Vanson Bourne, 2014), only 11% of respondents said their organization was extremely effective at responding to the impact of the application economy. When asked to identify the biggest obstacles to responding more effectively to the application economy, budget constraints, lack of resources and lack of knowledge/skills were three of the top four most highly rated answers.

By delivering services that help clients address these obstacles, your service provider business can capitalize on a mammoth, long-term opportunity. Following are three key aspects to enabling the IT transformation that will fuel success in the application economy:

• Deliver service level insights. Given the criticality of applications to customers, the demand for services to help support application quality, innovation and availability will grow increasingly urgent. As a result, effective and proactive monitoring is an increasingly critical requirement. Meet this demand with high-value monitoring services, and your business can be well positioned to maximize its growth potential.
• Move up the stack. Your service provider business needs to move beyond traditional infrastructure offerings and start delivering application-centric services. Deliver offerings in such areas as management of mobile devices, applications, content and email; application testing; service desk; identity and access management; and managed APIs. Establish the monitoring governance that serves as a foundation for operational efficiency and as a springboard for the move into offering advanced services for tracking application performance and end-user response, both of which are key to supporting your customers’ DevOps initiatives.
• Become an agent of change. Build on your resources and expertise to become trusted innovators within your clients’ organizations. Work with clients to do an assessment of whether they are ready for the application economy, and identify any innovation gaps that may stymie them.

The Opportunity for Telcos

For telcos, traditional data and voice services are growing increasingly commoditized. In our app store world, applications represent the face and voice, heart and soul of the user experience—while users will only notice the service provider when there’s a bad connection or lack of coverage.

To stay relevant, telcos need to begin delivering enhanced, value-added services to customers. This can include leveraging in-depth subscriber data to deliver advanced identity and access management services that safeguard sensitive assets. Alternatively, you can deliver the APIs and integrations that put your organization at the center of application innovation. Harness the innovations of application developers to bring value-added services to customers. Publish the APIs that enable not only internal teams, but a range of external developers to accelerate and proliferate application innovation.

The Opportunity for Cloud Providers

If you are working with a cloud provider, your on-demand, flexible cloud services will be a core part of your clients’ successful adaptation to the application economy. However, cloud-based infrastructure isn’t enough. Customers will need the value-added services that help speed application development and delivery.

To address the emerging demands of customers, cloud providers need to build on their strengths and support more sophisticated application performance management and service management discipline. In addition, cloud providers can bundle their platforms with application testing and release automation to provide customers with a ready-made DevOps environment. Cloud providers can also offer managed API services that enable customers to publish APIs to various communities. Alternatively, they can plug into partner APIs to deliver application development services through their platform.

The Takeaway

For your customers, change is underway—and this change is fundamental, inexorable and fast. For your business, this change can bring opportunities and threats. If you deliver services that help your customers thrive in the application economy, your business will prosper. Stick with the status quo, and expect shrinking margins and relevance. Find out how your business can quickly and profitably start delivering services that are designed for today’s application economy. Visit the CA Service Provider pages on ca.com, where you can learn more about our service offerings and access our application economy resource guides.

This guest blog comes from The CA Service Provider Center of Excellence. The CA Service Provider Center of Excellence delivers the proven strategies and insightful resources that can help your business boost its efficiency, profitability and maturity. No matter where your service provider business is in its evolution, count on the Center of Excellence to provide the guidance you need to more fully leverage your technologies and investments, optimize your operations, enhance your go-to-market capabilities and scale intelligently. To access CA Service Provider Center of Excellence resources please visit http://www.mspzone.com. Guest blogs such as this one are published monthly, and are part of MSPmentor’s annual platinum sponsorship.