17 May Why this IT Services Bubble won’t Burst!
We all remember the .com bubble, and let’s not forget the rise and fall of brick and mortar retail, so why should this IT industry be any different?
At Revenue Rocket we have seen major increases in IT service company valuations combined with the significant influx of investor capital looking to fuel consolidation on the heels of the pandemic generated, inflated demand for all things technology. The truth is the digital transformation started decades ago but the shelter in place orders and new normal have dramatically changed the dependency for connectivity, security, and remote infrastructure enablement around the world.
With most of us working from home now the industry has been very attractive to consolidators as operators working hard to bridge the gap between enterprise connectivity and security. The fact is we are not seeing it slow down at all, if anything we are seeing further increases as new solutions and technology emerges to further enable the remote workforce, whether it is a byproduct of a disruptive software revolution or a new way to share content, the one constant is that the enterprise is reallocating its capital to further enable such environments from other expense lines such as fancy headquarters and ergonomic chairs for their employees.
Additionally, the opportunity to scale operations and productivity in enterprise was proven to be not dependent on congregating at the office after a 45-minute commute but rather having people rested, safe, and using those extra hours and minutes contributing to the cause, be it the development of a solution or supporting customers struggling with an upgrade or deployment.
This in our opinion is the extension of the new normal and it’s only the beginning of where IT services will evolve over time. It’s for this reason we predict that the increased attractiveness into our special category is far from over, but it will take a different shape in a couple of years.
Today we are in the middle of the consolidation phase, which will be followed by another evolution phase, fueled by another round of investor interest. Somewhere around mid to late 2023, we predict another round of consolidation of certain services and technology that will likely collapse into other categories. Example: VoIP will likely merge into the growing and already mainstream video conferencing category.
It’s for these reasons that we are strongly encouraging our clients and prospects to identify their trajectory NOW and be a part of the revolution and evolution of the category. Those who wait and see will find themselves either too small to participate and/or irrelevant based on all these contributing factors but mostly due to them sitting out this required growth phase which will bring with it scale and as we all know with scale comes better pricing and all our customers want better, lower pricing!
To learn more about our predictions or to learn more about how we can help you and your company make the next leap please contact us by visiting www.revenuerocket.com or by calling us at 952-835-2333.