Market Trends, Information and Opportunities for Service Providers
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- Mildred Kennedy
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1 Market Trends, Information and Opportunities for Service Providers
2 Introduction The global managed services market is expected to grow from $107 billion in 2014 to $193 billion by Several circumstances have caused a need for change in the service provider business model. Some of the most prevalent are: The technology of the third platform and the Internet of Everything (IoE) The fast pace of change in the technology industry The proliferation of new competitors in the market In order to sustain or grow your business, you may need to adjust your business model to align with customer demand. The following offers valuable information on the service provider market you can use when making strategic decisions about your own business.
3 Number of customers/devices supported 72% of service providers support less than 100 customers per year, and two-thirds report supporting 100 or more devices for their customers. Support customers annually = 72% Support 100+ devices = 67% 35% 31% 30% 26% 30% 23% 25% 25% 19% 17% 20% 16% 20% 14% 14% 15% 15% 10% 10% 10% 6% 5% 10% 7% 4% 5% 5% 0% 0% Less than How many customers on average do you typically support or manage per year? More than 250 Don t know Less than ,000 How many total devices (e.g., networking devices, desktop PCs, printers, mobile devices, etc.) do you currently support for your customers? 1,001-3,000 3,001-5,000 More than 5,000 Don t know
4 Customer industries supported Service providers support a variety of industries, including legal, healthcare, nonprofit, retail, construction, education, manufacturing and more. (Multiple selections permitted) Legal 37% Healthcare 34% Nonprofit 34% Retail 34% Construction 33% Education 31% Manufacturing 30% Consulting 29% Finance 29% Engineering 25% Government 24% Insurance 24% IT service provider 20% Marketing 20% Entertainment 17% Transportation 17% Human resources 16% Software 16% Energy 15% Data processing 13% Travel 9% Aerospace 7% Other 13% N/A - serve a 32% variety of industries 0% 5% 10% 15% 20% 25% 30% 35% 40%
5 Types of service and solution offerings Top services offered include network and connectivity support, patching/ updating, desktop support, backup, server support, remote monitoring, desktop security and service desk. The number of service providers that are currently offering or plan to offer emerging technologies (Multiple selections permitted) Software-Defined Data Center (SDDC) 37% 47% 60% Cloud services Software-Defined Networking (SDN)
6 Service approach Of those that currently provide or plan to provide hosting services: (Multiple selections permitted) 53% host (or plan to host) the services themselves 44% partner hosts or will host services 42% one-time break/fix services 58% contract/managed services
7 Purchase channels Service providers get their products and solutions directly from the manufacturer, online, through resellers and from value-added resellers. Where do you get the IT products/solutions you provide to your customers? (Multiple selections permitted) Direct from manufacturer/ OEM 71% Online/ e-commerce 61% Through a reseller 56% Though a VAR/ VAD 48% Through a retail store 31% Other 7% 0% 10% 20% 30% 40% 50% 60% 70% 80%
8 Vendor/partner selection criteria The most important criteria service providers consider when choosing their partners and vendors is product quality, followed by quality of support and competitive pricing. How important are the following criteria when selecting IT vendors/partners for your business? (Top 2 answers reported: those selecting Very or Extremely important on a 5-point scale) Quality of product 91% Quality of support 80% Competitive pricing 77% Brand reputation 60% Sales enablement/ marketing materials 29% 0% 20% 40% 60% 80% 100%
9 Resources for researching vendors When researching vendors, service providers use various resources, including referrals and recommendations, Internet searches, publications, industry groups/affiliations and more. What resources do you use when researching potential new IT vendors/partners and technologies? (Multiple selections permitted) 100% 88% 80% 80% 54% 52% 60% 40% 6% 38% 35% 32% 20% 0% Referrals/ recommendations Internet searches Publications Industry affiliations/ groups Events Analysts Social media Other
10 Business goals Service providers are primarily focused on expanding their customer base and their service and solution offerings in the next 2 3 years. 79% What are your primary business goals for the next 2 to 3 years? (Up to three selections permitted) 80% 70% 60% 58% 48% 50% 35% 40% 30% 20% 18% 14% 11% 7% 2% 10% 0% Expand customer base Expand service/ solution offerings Improve operational efficiency Sustain current business Expand geo- graphically Reduce operating costs Reduce complexity Improve regulatory compliance Position ourselves for acquisition
11 Business challenges The biggest challenges reported by service providers are attracting new clients and growing their businesses, followed by differentiating their service offerings and finding good partners. What are the biggest business challenges your company experiences? (Up to three selections permitted) 33% 29% 23% 20% 19% 12% 8% 7% 5% 2% 5% Attracting new clients Growing/scaling the business Differentiating service offerings Finding good/ reliable partners for outsourcing Training staff Onboarding new clients Attracting top talent Managing existing clients Retaining top talent Managing outsourced projects Other None Don t know 54% 53% 60% 50% 40% 30% 20% 10% 0%
12 Addressing challenges Service providers want additional support from their vendors on things like pricing models, lead generation and staffing. What, if anything, could an IT vendor/partner provide that would help you address these challenges? (Open-ended response. Key themes and supporting quotes reported.) Improve financing options. Pricing that scales and reduces with our growth. Attracting top talent. Send referrals for new opportunities.
13 Partner with Insight Insight helps service providers find the best, most profitable ways to for long-term growth. Because of our partnerships and experience with integration and infrastructure, we can help you transform your business and stand out from the competition. Let us show you how. Contact us today. Source: Spiceworks Insight Service Provider Research Report, February managed service providers or IT consultants in the U.S.. Respondents were required to be IT service providers, 1 Copyright
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