During the Ingram Micro Seismic partner conference last week, a managed service provider mentioned to me that his business region has 17 percent unemployment. Yet, the MSP claims his business is thriving. Is that too good to be true?
Stated another way: Are managed service providers somehow immune to the economic slowdown? I certainly don’t believe that’s the case. But over and over again, I’m hearing from managed service providers who seem to be holding up far better than traditional VARs in their local markets.
I think our next MSPmentor 100 survey, slated to launch in September 2008, will shed some more light on MSP financial trends. But I think we all need to try our best not to “hype” managed services as a recession-proof business model.
Some of the hype comes from the media (guilty as charged).
But some hype also comes from MSPs themselves. When dozens of MSPs are sitting side by side at a conference, they are inclined to say their business is going well. After all, nobody wants to be the one person in the room who isn’t cashing in on managed services.
Posted In: Sales
Tags: Managed Service Provider | managed service provider revenue | managed service provider sales | Managed Services | MSP | recession proof
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Joe, we are absolutely seeing this dynamic among the Seismic managed services providers. End-users who have resisted IT outsourcing models with MSPs are now being forced to cut costs and/or reduce headcount due to the tough economy. Seismic customers are seeing great opportunities, and winning new business, particularly around Help Desk as it is just too costly for end-users to continue to fund internal IT help desks. The managed services value proposition of increased support levels and predictable expenses for end-users is too compelling to ignore as times get tight.
Jason Beal
Director of Services Sales
Ingram Micro
http://www.ingrammicro.com/seismic
Jason: Funny you should mention help-desk. My brother is COO of a commercial real estate firm in New York. His biggest complaint about IT is unpredictable help desk fees. During a weekend chat he mentioned he wanted flat-fee services that were predictable. That’s when I showed him MSPmentor… The rest, as they say, is history.
I agree…the predictability of a flat-free service, and the low-overhead that is experienced by many msps vs. the facility and inventory overheads incurred by traditional VARs have provided an edge for MSPS during this downturn…
Jim Van
http://www.logicomm-inc.com