The Prime Minister’s recent speech about artificial intelligence (AI) was a welcome acknowledgement of the importance of technology to the future of Britain’s economy.
It was good to see British politics at the very highest level engage with a growing technology sector — and promising reforms to make the UK more attractive for AI firms.
Yet, how can AI transform our economy when we have lower rates of digitisation and automation than most of our competitors in the developed world?
We cannot simply plug still-analogue industries and institutions into AI and expect magic to happen. Someone must first do the hard work of digital transformation — and do it fast.
To overcome this barrier, the UK must turn to managed IT services. The sector has the talent and technology to digitally transform the public and private sectors, at speed.
UK demand for managed services is growing
The IT managed services sector in the UK is already worth US$17bn. And it’s growing by 13% a year. This trend is likely to continue for the foreseeable future.
At a time when British companies need to cut costs, and the country as a whole needs to increase its per capita productivity, digital transformation is a priority across many sectors.
Because it’s so difficult to hire technology talent, the best option for companies looking for a way to digitise critical workflows, is to work with an external partner. For instance, many London businesses would turn to an IT support London provider to bridge this digital skill gaps.
With the right managed IT services partner, public- and private-sector organisations can cut IT costs by up to 25% and cut operational costs by up to 65%.
With its concentration of talent, instant access to cloud-based, market-leading technologies, and rapid-response operating model, the sector can deliver the digital boost the country, and many organisations, are looking for.
Cyber security: a catalyst for expansion
Another reason why the UK managed IT services sector is growing, and is important to the country, is the increased urgency of cyber security.
In 2024, global losses to cybercrime were worth more than US$10 billion. That’s double the value of losses in 2023.
Unsurprisingly, as the threat has increased, so have the regulatory requirements to protect infrastructure, customers and public-service users against this threat.
In the UK, the 2018 Network & Information Systems Regulations placed a range of obligations on public and private organisations with regards as to how they secure their operations and their users’ data. The Cyber Security and Resilience Bill, which will come before parliament in 2025, widens the scope of these obligations and makes them tougher.
To meet these regulatory obligations, organisations have been upgrading their operations, using existing technical standards such as the UK’s Cyber Essentials scheme or ISO 27001.
This approach can be highly effective. For instance, recent research discovered that businesses that implemented Cyber Essentials were 92% less likely to claim against their cyber insurance.
But as with digital transformation, this approach requires instant access to technology expertise and to advanced business technologies that are both highly configurable and demonstrably secure and compliant. In today’s market, that’s difficult to do in-house.
This is another reason why the IT managed services sector is primed for growth and why investors are so interested in it. It’s also another reason why the sector is key to many of the UK’s economic, social, and other policy goals.
The state of the sector: calm after an M&A storm
As well as great opportunity, the IT managed services sector also faces some headwinds. A recent surge in mergers and acquisitions, often led by American firms seeking to enter the thriving UK market, has caused some upheaval in the market.
Foreign investment and increased competition are both good. But where existing relationships and operating models have been disrupted, this can lead to lower quality of service, at least for a while. This in turn gives potential customers cause for wariness. That’s not in anyone’s interest.
“Clients value consistency and personal attention,” explained Hugh Caldwell, Managing Director of managed IT services specialist Texaport. “They appreciate speaking with highly qualified UK based IT consultants who understand their systems intimately and can provide tailored support.
“That’s why continuity and consistency are core to our model. By avoiding the pitfalls of rapid acquisitions, we’re able to preserve the integrity of our service delivery and build lasting relationships. These days, MSPs hold a great deal of responsibility to secure their clients from threat actors; that is why we champion industry regulation; the MSP sector is too important to the business community to be unregulated.”
To ensure that the British managed IT services sector continues to be known for the quality of its product and thrives as an engine of British-led domestic and export growth, the industry needs to organise. It needs to lobby government for the support it needs to succeed, and to help its clients succeed. And it needs to deliver the stability required to maintain high service levels.
Charting the path to future growth
The UK managed IT support sector is a British success story. Today, it’s well placed to help both the private and public sectors boost productivity and to deliver an export-led services success story. To capitalise on all this potential, we — and our partners in government — need to get serious about promoting the sector, now.
Not only will this deliver short-term gains for our clients and for the British economy, it will also deliver a key long-term benefit. The UK, as we have already seen, is held back because, among other reasons, it lacks digital skills.
So, it turns out that working with IT managed services doesn’t just remove immediate barriers to growth, it makes an important contribution to removing long-term barriers too. The time for the UK to take the managed IT services sector seriously is now. And if we do, the future is bright.
