Managed Services

For many in the IT channel, managed services ushered in the Holy Grail of recurring revenue. The model also has helped cash-strapped customers shift cap-ex IT spending to a more predictable operational expense. CompTIA’s study, Trends in Managed Services, finds managed services growth among both end users (adopting) and channel companies (selling) is expected to continue apace in the next two years.

CompTIA’s two-part study of 750 end users and channel partners reveals a number of opportunities, as well as challenges in the managed services space. Nearly half of channel respondents that sell managed services today said that portion of their business accounted for between half and 75% of revenue during that last 12 months. Meanwhile, planned investments in managed services by both the channel and end users are also increasing. Roughly 7 in 10 end user organizations today contract with a managed services provider (MSP) for some or all of their technology needs, versus 29% that handle all of IT on their own. Of those companies, 62% said they plan to increase their IT spend on managed services over the next two years, with the balance opting to remain at current levels.

On a positive note, end user organizations that rely on MSPs for some or all of their IT needs are reaping significant annual costs savings on those IT functions they are outsourcing. Among current users of managed services, 46% of firms have trimmed their annual IT expenditures by 25% or more as a result of their shift to managed services, including 13% that have slashed annual IT expenditures by 50% or more on the IT functions they have given over to an MSP. Another half of organizations have saved between 1% and 24% in IT costs annually on what they have moved to an MSP-managed environment.

CompTIA's Trends in Managed Services study is based on separate online surveys of 400 IT and business professionals in the United States involved in IT decision-making and 364 IT channel firms in the U.S. Both surveys were conducted in June 2011.

CompTIA members can read the full report here