As we reach the midpoint of the year 2023, it’s crucial for Technology Service Providers (TSPs) and Managed Service Providers (MSPs) to reflect on the lessons learned thus far to adapt, grow, and thrive in the dynamic landscape, the new patterns of success.
According to CRN, Some of the TSPs whose stock prices went up in the first half of 2023 include Salesforce CRM. For its fiscal 2023 (ended Jan. 31) Salesforce reported revenue of $31.35 billion, up 18 percent from $26.49 billion in fiscal 2022. For its fiscal 2024 first quarter (ended April 30) Salesforce reported revenue of $8.25 billion, up 11 percent from $7.41 billion in the first quarter of fiscal 2023. Net income for the quarter was $199 million compared to net income of $28 million. Palo Alto Networks was also included in the list. Palo Alto Networks, in December, just before the close of 2022, completed its acquisition of Cider Security, a developer of application and software supply chain security, for approximately $195 million. For the first nine months (ended April 30, 2023) of its fiscal 2023 Palo Alto Networks reported revenue of $4.94 billion, up 25 percent from $3.95 billion in the first nine months of fiscal 2022. The company reported net income of $212.0 million for the nine-month period compared to a $270.3 million net loss one year before. NVIDIA, the accelerated computing giant, stood at the top of the gainers’ list and demonstrated exceptional growth. For its fiscal 2024 first quarter (ended April 30 2023) Nvidia reported revenue of $7.19 billion, down 13 percent from $8.29 billion in the first quarter of fiscal 2023. Revenue declines in the company’s gaming and professional visualization businesses led to the overall drop in revenue. Net income for the most recent quarter was $2.04 billion, up 26 percent from $1.62 billion one year earlier. NVIDIA’s Market Capitalization was also recorded at a roaring $1.05 trillion.
Zoom Video Communications, IBM (IBM), AT&T, Lumen Technologies and Rackspace however were amongst the nine companies that recorded stock price declines in the period between Jan. 3 and June 30.
Configure Price Quote (CPQ) solutions play a vital role in helping technology service providers streamline their sales processes, deliver accurate quotes to customers and get to their current state. What are the new emerging patterns that CPQ tools need to enable service providers to configure complex products and services accurately, streamline pricing and quoting processes, and eliminate manual errors in the new era of GPT ideation and new product creation? Today is slower than the rate of change tomorrow, how do you keep up? How do you empower your organization to embrace this change and seize the new market opportunities? Technology service providers that are determined to get ahead of the competition realize the value of investing in robust CPQ systems to optimize sales operations and deliver accurate quotes promptly.
In the fast-paced and ever-evolving world of technology, staying ahead of the curve is vital for success. The year 2023 has been an instrumental period with the advancements in Natural Language Processing (NLP) and Artificial Intelligence (AI) for TSPs, as they navigated through a significant sea of new learning and embrace these new opportunities; we are beginning to learn some new lessons along the way.
- Embracing Agility and Adaptability:
The tech industry witnessed unprecedented velocity of new products and change in 2023, and TSPs are quickly learning the importance of agility and adaptability. Legacy systems can become anchors. Those who were nimble in their operations and embraced emerging technologies such as AI, automation, and cloud computing gained a competitive edge. By staying abreast of industry trends and proactively adopting new tools and methodologies, these providers were able to respond swiftly to changing market demands and meet evolving customer expectations. Simple things and common sense begin to bubble up; solutions should be codeless the business unit should be empowered to create solution offerings and pricing to seize the day. The process, therefore, has to be codeless, it has to have strong governance and the solution should be easy to use otherwise you will lose to your competitors or sell bad deals that will sink your business. - Prioritizing Robust Cybersecurity:
As cyber threats became increasingly sophisticated, TSPs recognized the critical importance of robust cybersecurity measures. Safeguarding sensitive customer data and protecting their own infrastructure became paramount. Providers invested heavily in advanced security protocols, encryption techniques, and employee training to ensure data privacy and mitigate potential risks. By making cybersecurity a top priority, TSPs were able to build trust with their customers and establish themselves as reliable partners. With good comes bad; AI and ML can also be used for malicious activities – phishing has become more prevalent than ever and organizations therefore need to be even more vigilant than before. Its good news for technology service providers for these solutions. - Putting the Customer at the Center:
In 2023, TSPs learned that customer-centricity is the cornerstone of success. Understanding customer needs, preferences, and pain points became the driving force behind their strategies. Providers focused on building strong customer relationships, enhancing support and communication channels, and delivering personalized experiences. Leveraging data-driven insights, these providers tailored solutions to individual customer requirements, ultimately improving customer satisfaction and loyalty. With the NLPs prospect and customer research and analysis is faster than ever. The ability to create new targetted impact solutions is easier than ever. Getting these into your DNA and systems quickly and easily will be the new competitive advantage. - Harnessing the Power of Data:
Data became the lifeblood of TSPs in 2023. By harnessing the power of data analytics, providers gained valuable insights into customer behavior, market trends, and product performance. This wealth of information enabled them to make data-driven decisions, optimize their offerings, and identify new business opportunities. By continuously collecting, analyzing, and acting upon relevant data, TSPs positioned themselves for growth and innovation. - Collaboration and Partnerships:
TSPs understood the significance of collaboration and partnerships in driving innovation. In 2023, strategic collaborations with other tech providers became a catalyst for growth and expansion. By joining forces, providers could tap into each other’s expertise, share resources, and leverage complementary capabilities. Collaborations not only fueled innovation but also opened doors to new markets and customer segments, enabling TSPs to widen their reach and enhance their service offerings.
The lessons learned by TSPs in 2023 have transformed the way they approach their businesses. Agility, adaptability, speed, customer-centricity, robust cybersecurity, and data-driven decision-making have become ingrained in their strategies. By embracing these lessons, TSPs have positioned themselves at the forefront of the industry, delivering exceptional value to their customers and thriving in the dynamic landscape. As we move forward, these lessons will continue to guide TSPs in navigating future challenges and seizing new opportunities in the ever-evolving world of technology.
According to McKinsey July 2023, for the CIO and CTO, the generative AI boom presents a unique opportunity to apply those lessons to guide the C-suite in turning the promise of generative AI into sustainable value for the business. Their guide to applying the new technology and preparing for success includes some really useful insights on how businesses can create value, orchestrate technology and data, scale solutions, and manage risk for generative AI. The guide recommended that CIOs and CTOs be mindful of, and practice the following:
- Move quickly to determine the company’s posture for the adoption of generative AI, and develop practical communications to, and appropriate access for, employees.
- Reimagine the business and identify use cases that build value through improved productivity, growth, and new business models. Develop a “financial AI” (FinAI) capability that can estimate the true costs and returns of generative AI.
- Reimagine the technology function, and focus on quickly building generative AI capabilities in software development, accelerating technical debt reduction, and dramatically reducing manual effort in IT operations.
- Take advantage of existing services or adapt open-source generative AI models to develop proprietary capabilities (building and operating your own generative AI models can cost tens to hundreds of millions of dollars, at least in the near term).
- Upgrade your enterprise technology architecture to integrate and manage generative AI models and orchestrate how they operate with each other and existing AI and machine learning (ML) models, applications, and data sources.
- Develop a data architecture to enable access to quality data by processing both structured and unstructured data sources.
- Create a centralized, cross-functional generative AI platform team to provide approved models to product and application teams on demand.
- Invest in upskilling key roles—software developers, data engineers, MLOps engineers, and security experts—as well as the broader nontech workforce. But you need to tailor the training programs by roles and proficiency levels due to the varying impact of generative AI.
- Evaluate the new risk landscape and establish ongoing mitigation practices to address models, data, and policies.
The article also highlighted the tremendous value that AI provides for software developers; McKinsey research shows generative AI coding support can help software engineers develop code 35 to 45 percent faster, refactor code 20 to 30 percent faster, and perform code documentation 45 to 50 percent faster; this translates to much higher efficiency.
“Generative AI is poised to be one of the fastest-growing technology categories we’ve ever seen. Tech leaders cannot afford unnecessary delays in defining and shaping a generative AI strategy. While the space will continue to evolve rapidly, these nine actions can help CIOs and CTOs responsibly and effectively harness the power of generative AI at scale.”
Daniel Kube, CEO of servicePath talked about how the article is telling of how the market is evolving and the agility for creating net new solutions quickly has become a need for businesses today;
“McKinsey talks about how when strategizing for developing generative AI capabilities, a decision that needs to be made is if your organization is going to be Taker, Maker, or a Shaper? Sound familiar? This is a variation of the classic “rent, buy, or build” decision. The basic principle, that states that a business should invest resources into generative AI abilities where it can establish an exclusive advantage for itself while leveraging available services for areas that resemble commodities. remains valid. The article delves into the nuances of integrating generative AI into business strategies, emphasizing the importance of selectively investing in areas where a proprietary edge can be secured while utilizing pre-existing services for more commodity-like sectors. Each one of the 3 categories will have implications for products and solution costing and consumption models for solution providers and enterprise consumers. This is a pertinent example of the rapid rate of change and new market emergence; which organizations have to embrace in order to remain relevant and competitive. As a result its more important than ever to have flexible solutions like servicePath CPQ+ that have been designed to help organizations address high rates of change and emerging market trends and net new creation of solutions.”
CPQ systems like servicePath CPQ+, which integrate with leading CRMs and ERPs like Salesforce CRM and Microsoft Dynamics 365 amongst others, have proven to be invaluable assets for TSPs. Seamless integration between these platforms facilitates the smooth flow of data, enables real-time updates, and ensures accurate pricing and inventory information. By integrating CPQ with CRM and ERP systems, providers can achieve greater operational efficiency, reduce manual data entry, and enhance customer experience throughout the sales cycle.
TSPs utilizing CPQ tools in 2023 have gained the following benefits by employing the automation tool: (the new patterns of impact)
- Codeless empowerment of business users to seize the day with new products offering, pricing and configuration, no need for IT but still have strong governance for revenue recognition, Pricing accuracy and technical and profit analysis.
- Increased sales efficiency: CPQ tools automate the configuration of complex products and services, allowing sales teams to generate accurate quotes quickly, reducing manual errors and eliminating time-consuming manual processes.
- Deep integration into mutl-partner pricing eco-systems, Ability to deal with all types of data and collection frequencies for pricing and configuration accuracy.
- Improved pricing accuracy: CPQ tools consider various variables and discounts to provide accurate pricing information, ensuring consistent and profitable pricing across all sales channels.
- Enhanced customer satisfaction: With streamlined sales processes and faster quote turnaround times, TSPs can respond to customer inquiries promptly, increasing customer satisfaction and improving overall experience.
- Improved sales productivity: Automation of the CPQ process frees up sales teams’ time, enabling them to focus on building relationships with customers and closing deals rather than manual administrative tasks.
- Real-time product visibility: CPQ tools provide real-time information on product availability, allowing sales teams to offer accurate delivery timelines and commitments to customers.
- Customized and personalized quotes: CPQ tools enable service providers to tailor quotes to each customer’s unique requirements, offering personalized solutions that meet their specific needs.
- Faster revenue growth: By reducing the sales cycle and improving efficiency, TSPs can close deals faster, leading to accelerated revenue growth.
- Analytics and insights: CPQ tools often come with advanced analytics capabilities, providing valuable insights into sales performance, product trends, and customer preferences, allowing service providers to make data-driven decisions and optimize their offerings.
These benefits collectively enable TSPs to stay competitive, deliver exceptional customer experiences, and drive business growth in the rapidly evolving tech industry.
