Executive Summary
The infrastructure services sector moved out of the peak pandemic period into a highly uncertain landscape that has had a real and tangible impact on overall performance. Growth rates have slowed across the board as organizations tightened their belts, deci- sion-making stalled, projects were put on hold and sales cycles elongated.
While the dropping off has been real, the pain has been somewhat moderate. The sector has benefitted from the scale it has built up over the last two decades. Customer bases are entrenched and service providers are managing and responsible for mission-criti- cal workloads and data. They are being asked to do more with those workloads – around security, compliance, performance optimization and DR – and being paid to do it. To a large extent, this has offset the losses and attrition created by the weak macro environment and enabled providers to keep pushing forward with positive growth.
The sector has always seemed to be able to demonstrate and prove its underlying value proposition in the wake of disruptive events. While spending may go down, the relationship between a service provider and customer is often reinforced during bad times and the inherent efficiency of the outsourced infrastructure model delivers benefits in the present and well into the future. Lessons are learned and executed in short order.
The post-pandemic environment that is emerging is fraught with uncertainty. But the future of the infrastructure service sector is clear and in many ways, predictable. Weak economic conditions may persist, but infrastructure providers will continue to grow, albeit at slower rates. Few customers will leave and over time, they will continue to buy more services and expand with their service providers. When conditions improve, the addressable market for infrastructure services will correspondingly widen.
This report takes a close look at the noteworthy trends and developments from the recent 3Q22 period. A more detailed look at the M&A landscape, APAC region and hyperscale cloud sectors is available to clients in separate quarterly reports.
