Managed Service Users Cut IT Costs 25% or More, CompTIA Finds

Nearly half  (46 percent) of organizations using managed services have cut their annual IT expenses by 25 percent or more, according to a new study published Tuesday by CompTIA, the nonprofit association for the IT industry.

The CompTIA study, Trends in Managed Services,” also reveals that among current users of managed services, 13 percent have slashed annual IT expenditures by 50 percent or more.

This is compelling evidence that managed services, even when implemented on a small scale, can deliver significant cost savings, freeing up cash for other business needs,” said Carolyn April, director, industry analysis, CompTIA. More importantly, these savings are accomplished without impacting the availability and reliability of the technology solutions the company relies on to conduct business.”

Indeed, the CompTIA study reveals that 89 percent of current managed services users are very satisfied or mostly satisfied with their experience. Performance and uptime, agreeable contract terms, a secure environment, and the flexibility to easily and quickly add new services all contribute to customers satisfaction, the study found.

Another critical factor is good communication between the customer and their managed services provider . Among companies that are highly satisfied with managed services, three-quarters say their MSP provides regular activity reports on all of the steps they take with the customers IT environment, including documenting any problems averted to keep the customer up and running.

This shows return on investment and fuels accountability, which builds loyalty and raises satisfaction among customers,” April noted. From the MSPs perspective, these are opportunities to make recommendations on new services to add to keep pace with business growth. Customers are engaged even though theyre not managing their own IT.”

While costs savings are the top factor in deciding to turn to managed services, more than half of respondents in the CompTIA survey said a major reason they are contracting with an MSP is to free up their internal IT staffs to work on projects that fall into the business core competencies in other words, revenue-generating activities.

Looking ahead, 62 percent of end users surveyed 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. Among the IT needs that companies intend to move to managed services in the next 12 months are:

·         security, such as firewalls and antivirus, cited by 38 percent of customers

·         website hosting, 36 percent

·         network administration and maintenance, 34 percent

·         help desk and IT support, 31 percent

The managed services model also has been successful as a revenue generator for the IT channel. Fifteen percent  of channel partners offering managed services reaped more than 75 percent of their revenue from these contractual services last year. Nearly half said that managed services accounted for between 50 percent and 75 percent of sales during the last 12 months.

Growth expectations are not overly aggressive, perhaps reflecting the tepid economy,” April said. Still, a quarter of respondents project growth of more than 10 percent and a full two-thirds expect modest growth. None of the sample predicted any level of decline in MSP business in the coming year.”

CompTIAs 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.