Wow, another year gone by.  At the end of the year, I like to reflect and make some observations about what we are seeing in our business and across the industry as a whole. AI was a hot topic this past year, and all the major tech companies are talking about it.  How it gets fully integrated into our tools so it’s usable in a meaningful way at scale is yet to be seen, but it is definitely getting there. As we watch the industry expand and evolve, we will continue to see tools like AI augment and increase the capabilities of our workforce. But let’s look back at 2023 and take a review.   

Overcoming issues with shipping 

Coming into 2023, we had a very large backlog on our hands because our clients were having to order parts for projects months in advance to guarantee the equipment would be available by the start of the implementation. Thankfully, we finally broke through the backlog issue by summer of this year and now nearly everything we sell can be acquired in just 2-3 weeks, with some lingering items still in the 90-day category. But from a project standpoint, 90-day lead times are very doable and easy to plan around.  The hard part is planning for equipment that keeps pushing out.  We have had some parts come in this past year that were ordered nearly a year earlier--super glad that is over now. Plus, due to the increased speed of shipping, it has helped our clients execute projects more quickly, and as a result we had many more projects in motion this year than in previous years.   

Solidarity within economic uncertainty 

Upcoming economic slowdown 

Continued talks of an economic recession have been looming all year long, but we have seen no evidence of a slowdown in our sales pipeline yet. However, based on the economic forecasts we follow, we do expect to see some kind of slowdown in the first half of 2024.  Whether or not that has any impact in the tech sector is yet to be seen. The good news is that it’s likely to be a soft landing without a real significant impact.   

The impact of inflation  

Inflation and interest rates have impacted our business as they have impacted most of our clients. We saw these trends across the industry and many of our clients had the same reaction in their own businesses.  This puts pressure on our employees who now have to spend more of their money for the same products/services they did the previous year.  To compensate for this shift, we had to raise our labor rates at the beginning of the year, but fortunately we believe that inflation has stabilized for the foreseeable future.   

Talent shortages  

With unemployment reaching multi-year lows, we’ve noticed a decrease in the availability of good technical resources.  More of them are hunkering down with existing employment until the projected recession passes by.  It’s too risky for them to make a jump to new employment.  The result is that more and more of our clients are willing to outsource large chunks of their IT environment because they can’t acquire the talent they need to manage it.  We believe this will continue to be a long-term trend and we are prepared and ready to embrace it.   

Client trends and Cisco updates  

Cloud services  

We continue to migrate our clients to cloud services, especially on the voice front.  Cloud calling and contact center is front and center in the collaboration sphere, and nearly every project we are doing around voice includes migrating to the cloud, with many cloud migrations including some form of integration with Microsoft Teams.  There are still a few exceptions where on-premises voice systems are the only option--think high security environments, airports, federal government, etc.—but most of our clients are moving to the cloud in droves.  

Because of the increased cloud migration, we are continuing to see a decline in the data center environment—this means less servers being deployed, and diminishing infrastructure for those servers, including storage and networking. Moving an on-premises voice system to the cloud can eliminate 5-10 virtual machines alone. Move your domain services, file storage, email, etc., and you can seriously reduce your server footprint.  This means that our clients aren’t investing in the data center infrastructure they once were in favor of cloud hosted options.  

Increased versatility for Cisco Endpoints 

Cisco made a huge splash this year by making all their video endpoints fully compatible with Microsoft Teams in its native environment.   Cisco has the very best video technology and it’s now available and works with whatever video platform you choose to have, including Microsoft Teams, Google Meet, Zoom, and of course, Webex. We have seen clients really gravitate towards this offering, and Cisco is making it easy to demo and test out the technology, so let us know if you want to try it out! 

Advances in cybersecurity  

Early in 2023 we began offering a 24x7 SOC/SEIM offering for security monitoring.  We’ve had several clients adopt this service and we’ve been able to show real results of keeping the bad guys out.  If you don’t have someone monitoring your security – how do you know when you’ve been compromised?  It’s a very real and very expensive threat.   

In the realm of security, more and more of our clients are adopting multi-factor authentication to help protect themselves.  One of the trends we saw this year from the bad guys was a real push to just bombard our users with mobile requests to ‘accept a push notification’ from their MFA product.  The idea is that if a hacker asks you enough times to accept, that you will do it just to make it go away.  Seems silly, but it works, especially at 2am when you just want to go back to sleep.  To combat that, you can have your MFA prompt you to enter a code back into the software you are logging into, as a 3rd step.  It really helps with user verification.  

Looking towards 2024 

As we look ahead to this next year, we anticipate the following:  

• The trend towards outsourcing IT will continue to grow, with companies deciding to outsource their entire IT department to a 3rd party vendor to both improve service and maintain a higher level of stability.  Companies are tired of the revolving door of IT people within their organization.   

• Data centers for most mid-size companies will continue to shrink.   

• AI continues to be integrated into our IT tools and is starting to provide real and actionable feedback to both protect our systems and be proactive to potential issues.   

• AI also starts being leveraged by the bad guys and new types of threats are imagined and used to infiltrate our environments.    

• IT workers will continue the path towards being almost 100% virtual.  Companies that do not embrace this will lose access to the best talent.   

This next year, I would advise that you continue to make investments that will increase your security posture.  Cybersecurity weaknesses are the number one risk to your company, greater than any recession.  You will likely find that your cyber security policy requires continued investment anyways, so you might as well get ahead of it.  Insurance companies are getting way stricter on what they will cover, so you need to protect all your vulnerabilities.  

I would also advise that you take a good look at your IT resources and be willing to consider ways that you can outsource chunks of your environment.  This will enable you to either reduce the IT footprint you have, bring more stability to areas that your team lacks in skills/talent, or allow your existing resources to focus on projects that improve business outcomes.   

From all of your friends at Telcion, Merry Christmas and Happy New Year!  

This post was contributed by Lance Reid, our CEO. Lance has worked in the technology industry for over 25 years. He became a Cisco Certified Internetworking Expert (CCIE) in Collaboration in 2005 and has been serving on Cisco's SMB Advisory Board since 2013.