OnForce: Price Stabilization, Higher Demand Characterize Market

Dollars are beginning to flow again as pent up demand for technology refreshes, project work and security is finally coming to market and IT budgets are being spent again, albeit judiciously.

IT services marketplace OnForce CEO Peter Cannone tells Channel Insider that work order volume grew about 15 percent during the first quarter over the same period a year ago, pointing to a move to take on some of the projects that were deferred in 2009. But break/fix work and warranty work continues to be strong, too, indicating that CIOs are still keeping a careful watch over spending.

But it's more than just work order increases that point to improvements in the technology  services sector. The pipeline is perking up, too.

“We talk to anywhere from 1,000 to 3,000 different services VARs out there who use us and use the platform,” Cannone says. “We talk to them when they call.  

“The pipelines are  healthier, and there are some big rollouts being planned. Enterprise players are starting to get back in.”

That movement in the market place comes after a year when many CIOs put moratoriums on IT spending, projects and refreshers.

Particularly, now, government VARs are winning large deal as the federal government spending on IT projects picks up. In addition, mid-tier and large opportunities at businesses are coming back.

Cannone says that many of these projects, including technology refreshes and upgrades on security are sometimes deferred  maintenance that organizations didn’t do last year.

“We did see an increase in requests for quotes,” he says. “There’s a lot of project work that hasn’t been awarded yet, but businesses are starting to get quotes.”

Another thing that’s coming back, says Cannone, is the service VAR.

“They are starting to win some work back,” he says. “Security has been very hot. Businesses are starting to invest more in technology in just the last 60 days.”

And as the work comes back, VARs who had reduced their workforces during the recession are looking to add contract workers to help close the gap, Cannone says. He adds that over the past two years as the recession has hit VARs and other technology solution providers, OnForce has evolved to become more of a contract employment partner to the channel from its roots as a services and skills marketplace.

Cannone reports that VARs are still under pressure to do work at lower prices than they had before the recession. “There’s really some services work that might have been $300 a job and now is $175 per job. The pricing has really been reset,” Cannone says.

OnForce has also recently seen an up tick in large retailers switching out their PIN/POS pads where customers swipe their credit cars. OnForce saw very little of those updates last year, but some major retailers did replacements in the first quarter of 2010.

As for particular skills in demand in the marketplace today, Cannone says OnForce is getting many requests for VMware and virtualization.

For those looking to earn a premium, a VMware certification may go a long way.