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Acer America
Acer America Corp. is a computer manufacturer of business and consumer PCs, notebooks, ultrabooks, projectors, servers, and storage products.

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333 West San Carlos Street
San Jose, California 95110
United States

WWW: acer.com

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December 15, 2023 |

Strong Spending Expected in 2024 Despite Economic Headwinds

Innovation and refresh cycles will boost device sales while AI lifts the market to new heights in 2024.

Yogi Berra may or may not have said, “It’s tough to make predictions, especially about the future,” but whoever said it could be talking about 2024.

Laurie McCabe of SMB Group

Laurie McCabe

Experts argue about strong growth versus recession indicators, the effects of politics, international relations, the price of oil, and technology refresh cycles. But MSPs and analysts in general are positive about revenue growth in 2024 and 2025.

“We did our last survey in June of this year of small and medium-sized businesses with up to 2,500 employees,” said Laurie McCabe, a partner at the analysis firm SMB Group. “Two-thirds are optimistic revenue will increase in 2024 versus 2023, and two-thirds expect to spend more on technology in 2024.”

MSPs will be fine in 2024, according to Peter Melby, chief revenue officer of New Charter Technologies, an MSP aggregator. “Upticks in the overall market give a tailwind to buy technology. If the market’s down, companies automate to save money.”

He added that channel pros on the front of the tech wave do well, but those behind get run over. “We see diversification as a way to even out the bumps,” Melby noted. “Healthcare, manufacturing, and financial services are now pushed to think about their technology and security differently.”

Areas such as private practice healthcare may slow spending, but they can’t slow down spending on cybersecurity. “MSPs that can help out the stressed businesses in 2024 will grow,” Melby said.

If the economy does slow, areas that may suffer include nonprofits that lose donations, and some restaurant segments will get hurt, he added.

Paco Lebron, CEO of ProdigyTeks, a security-focused MSP, expects his primary verticals of manufacturing and healthcare to grow in 2024 to make up for slower spending in 2023.

Peter Melby of New Charter Technologies

Peter Melby

“Manufacturing 4.0 includes better automation so more work can be done with less manpower and remote admins.” Privatized 5G networks in construction and manufacturing areas are growing as well, he added.

Taking a vertical focus is key to providing in-depth services to clients, Lebron said. He also supports nonprofits and social impact agencies and specializes in those verticals with no plans to diversify further. “We doubled down with partners in those areas, and with vendors serving those verticals,” Lebron explained.

McCabe’s research found that companies in the IT services, hospitality, and wholesale distribution verticals are the most optimistic about their businesses in 2024. The least optimistic are those in education and professional services. “If you diversify,” she said, “look for adjacency … general practice medicine to dentists makes more sense than, say, lawn care companies to dentists.”

Melby also said MSPs in high cost-of-living areas likely will see the growth that comes with challenges. Businesses in those regions may need to shift to provide fewer local services and support more remote workers, he said.

Rural MSPs will struggle to keep up with more sophisticated user bases than they’re used to, Melby added.

As businesses demand people return to the office, MSPs may need more employees and onsite services as their customer base realigns. “Pay much closer attention to how nimble you can be and react faster,” Melby advised. “You can’t build a successful organization that is unable to pivot.”

New Tech, New Sales Opportunities

Paco Lebron of ProdigyTeks

Paco Lebron

Major vendors have seen a PC sales slump after the pandemic, but McCabe pointed out that replacement cycles will soon come into play.

“Companies will refresh at some point, and older PCs have fewer security features. If biometric logins replace passwords, that alone will be the reason to get a new PC,” she explained. Recent innovations in the PC sector, such as AI, faster processing, and better graphics will also push the refresh, according to McCabe.

Many technologists yearn for the bleeding edge, but Melby sees a lag. “Mature data management, business intelligence, and analytics shouldn’t be considered bleeding edge, but they still are. Digital transformation for better data management and protection is starting to find some momentum.”

More bleeding-edge technology won’t help most of Lebron’s clients. “The forward edge is maybe Microsoft 365 and Teams,’’ he said. Technologies like Copilot, Microsoft’s new AI powered assistant, will get some interest. But according to Lebron, economic conditions will prevent early adoption.

Internally, however, ProdigyTeks uses AI with ChatGPT, Bing AI, and BingSearch.“We get better insights and higher quality answers,” Lebron said. Several of his employees are in Mexico, Venezuela, and Argentina, and “Bing AI helps smooth out different dialects in different countries.”

Gary Russell of LiveSmart Technologies

Gary Russell

Similarly, LiveSmart Technologies President Gary Russell said customers aren’t ready to dig into their pockets for AI yet, but as a former engineer, he’s always experimenting. “In a couple of years, smart home devices with AI will take actions based on patterns and learned behavior.”

Added McCabe: “MSPs need to start thinking about their AI strategy because AI won’t go away.” This is because the major software vendors are putting an incredible amount of AI into their products already, she said. “If you sell software or products, you better be serious about AI and privacy.”

Melby believes that 2024 “will be a significant period of growth for MSPs that are able to manage complexity, even if the economy itself doesn’t grow.”

While resellers always push clients to purchase more devices, he cautioned that business leaders don’t buy technical reasons for more spending unless you tie it to a business case. “IT pros don’t always understand that every decision is a business decision,” he explained.

As far as McCabe is concerned, that business case may be spelled AI. Her advice for improving an MSP’s market position, regardless of economic conditions, is to, “Work with your vendor partners that provide training and certification, because MSPs better know about AI,’’ she said. “AI will be everywhere.”


Image: iStock


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