When it comes to market research and statistics, I’m always a bit wary. Seems to me like nobody is held accountable for whether an IT market forecast ever actually turns our right or wrong. Despite those caveats, I’m still intrigued by a few stats and forecasts about how the managed services market may evolve. Here some figures worth noting.
1. In a 2009 survey of 2,300 IT executives and technology decision-makers in North America and Europe, Forrester Research, Inc. found that 47 percent of enterprise and 37 percent of small and medium business (SMB) respondents say they have already purchased managed or outsourced telecommunications services.
Reality check: I think the statistic may look inflated to MSPs, especially since the stat includes telecommunications services. Are there any small businesses that don’t outsource their telecom services these days?
2. Eric Goodness, Vice President at research firm Gartner, Inc. predicts that 90 percent of all North American companies will be using remote infrastructure managed services by 2014.
Reality check: I’m reaching out to Goodness to see how he defines remote infrastructure managed services.
Side note: Both stats were mentioned in an opinion-editorial piece published by Sam Schoelen, CIO of Continental Resources Inc.
How Much Growth?
Anecdotal evidence — from a range of MSP-centric software companies plus the annual MSPmentor 100 survey — suggests that the managed services market remains in growth mode. But just how much growth can we expect? And where will the growth come from?
I’m reminded of some recent comments from Gerard Kane, CEO of MSP Services Network. Kane noted that remote, proactive monitoring is now a base service — something that customers assume you offer, as part of a broader dialog about Technology as a Service. Managed security and online storage seem to be the logical next-steps for beginner MSPs. And no doubt, customers increasingly want hosted versions of horizontal applications like Exchange, SharePoint and so-on.
Numbers Can Kill You
Where are the profit margins? I don’t have all the answers. But here’s the important twist for MSPs; When Gartner says 90 percent of North American companies will use remote infrastructure managed services by 2014, don’t sit back and celebrate. The reason: Gartner’s forecast does NOT guarantee success for MSPs.
Think of it another way: Just because the vast majority of North American businesses now have broadband, does that mean the vast majority of ISPs profited from the broadband surge? Absolutely not.
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Posted In: Remote Monitoring & Management Software | Sales
Tags: Forrester | gartner | Managed Services Market Forecast | Managed Services market Growth | Managed Services Sales Forecast
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Hey Joe,
I enjoyed reading your article as it raised some critical questions into Eric’s editorial piece.
In regards to where will the growth come from within the market, I believe it is up to MSP to take action to start implementing SLA agreements. While some MSPs will be more successful than others, there is a widespread belief within the IT community that managed services is a better business model which results in higher profit margins and a higher business valuation.
Although no research article can guarantee that MSPs will become successful, the one written by Eric is a firm indication that managed services is more than ever prevalent in today’s IT business community.
-Natan
-Partner Management Specialist
I think 90% adoption is overly optimistic. In terms of Natan’s SLA agreement, remember that service providers can only control performance up to the point where packets leave their network exposing it to the whims and impact of the Internet at-large and what else is hitting customer’s exposed WAN link via scanning and probes. Customer Internet performance is a multi-part equation of what’s bombarding the outside of their firewall and what’s competing for the available internal uplink. Customers will always complain of slow application response or performance. Identifying causes may start at active services, expand to device counters and even involve traffic analysis. For most organizations 9 to 5 business up-time and availability is good enough.