MSP Market Growing Steadily, Study Finds
MSP Market Growing Steadily, Study Finds by UCStrategies Staff
In spite of revenue, staffing and the impact of cloud computing, the MSP (managed service provider) market has slowly been increasing its offerings and impact. According to a CompTIA study, the “slow and steady” approach has been adopted by several companies with regard to the cloud.
The CompTIA study titled “Trends in Managed Services,” found that around 50 percent of all companies offered managed services exclusively or as part of a larger business portfolio. This presents an increase from 2011, where four in 10 companies provided these services.
Seventy-five percent (or more) of total revenue is expected to be accounted for by managed services from 17 percent of companies in the period over the next five years. Managed services are thought to be a rising share of overall revenue during that time, according to two-thirds of companies.
The director of industry analysis at CompTIA, Carolyn April, said: “The managed services model is becoming more commonly practiced across the channel and generating demand among end users. It’s a steadily growing market that is not going away despite some uncertainty.”
As a result, the majority of all IT channel companies have made a move into the managed services market, but this does not indicate that a complete migration will occur. It has become apparent that a hybrid model is becoming more popular; firms are introducing some degree of managed services through their portfolios and simultaneously maintaining their legacy streams of revenue.
April commented: “The incidence of pure play MSPs is pretty low. It’s still an added practice as part of an overall business. Many, if not most, MSPs continue to sell hardware and other infrastructure to their customers, do the implementation and only then take over management of said devices under a managed services contract.”
Issues such as financing and staffing are key concerns for companies, and raises caution when they look into managed services.
According to the CompTIA study, companies are finding it difficult to offer compensation to sales staff for managed services. A percent commission on the total sales are used by sales reps selling products. However, customers of managed services usually pay either a monthly per-user, per-device or flat rate charge.
The industry does not offer clear solutions on how sales staff can be compensated; small commission checks are offered every month by some companies, whilst others give a percentage of the total contract at the time it closes.
Four in 10 IT channel companies that are not offering managed services state that they are observing the impact of cloud computing to see what affect it has on the market.
April stated: “There are a number of camps when it comes to making comparisons between managed services and cloud computing business models. Are these models essentially one in the same? Are they complementary, but different? Or are they directly competitive?”
The majority of channel companies, however, do seem to be making a slow move towards the managed services and cloud computing sphere; nearly two-thirds note that some level of managed services will be introduced in the next 12 months. (CY) Link