Report: Managed Services Doing Well Despite RecessionBy eChannelLine | Print
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Enterprises and midmarket companies have cut spending on IT hardware and software, causing a ripple effect of downward business through resellers. However, a new study by CompTIA shows managed service providers are doing well and better positioned for the economic recovery.
Companies delivering technology solutions through a managed services model have weathered the current economic recession better than companies focused on more traditional product and support sales, new research from CompTIA reveals.
Though profits from both groups have been negatively affected by the economy in the past year, managed services providers have been better able to generate cash flow, avoid wild quarter-to-quarter fluctuations in income and generally out-performed traditional technology resellers. The top managed services providers surveyed tended to hold their profits longer even as the economy headed down; and began their recovery sooner, the survey revealed.
"Managed services represent the best opportunity in some years for technology solution providers to create significant shareholder value," said Todd Thibodeaux, president and CEO, CompTIA. "Since early adopter technology solution providers started delivering managed services to small and mid-sized business market in the 1998-2000 timeframe, SMB managed services have grown rapidly on the merits of its win/win business benefits for both the solution provider and the customer. The managed services model offers customers a predictable budget and a level of service, along with recurring strategic and tactical IT advice."
That represents a major shift in business models from the traditional solution provider model of time and materials "best effort" support and product/project sales, often experienced as more unpredictable and difficult to scale both operationally and financially, Thibodeaux said.