Managed Services Revenue Lifts Dimension Data, AGT

More evidence that managed service providers (MSPs) can endure in difficult economic times: Dimension Data and Applied Global Technologies this week reported managed services as a key factor in fueling revenue growth.

Dimension Data, a IT services and solutions provider, reported its first half FY 2009 (ended March 31) revenue climbed 8.1 percent to $1.95 billion. Managed services paced top line growth at 25.2 percent.

Brett Dawson, Dimension Data’s chief executive officer, said his company continues to see good demand from managed services customers. And those aren’t necessarily new customers. Dawson, speaking during an analyst calls, said Dimension Data has picked up business as existing clients consolidate service providers. Consolidation has helped the company expand into new regions with the same customer.

In contrast, Dimension Data’s product revenue was flat. Dawson said clients are delaying CAPEX-related purchases.

Applied Global Technologies (AGT), meanwhile, announced 60 percent revenue growth for 2008. The 15-year old private company, based in Rockledge, Fla., cited managed services as one factor behind the expansion. AGT, for example, offers managed video conferencing services. The company’s PerfectMeetings service packages video infrastructure technology for a fixed monthly fee per conference room or desktop user, according to the company. AGT’s bundle includes bridging, streaming, recording, and video network management.

AGT also reported strong demand for products geared toward video conferencing service providers.

The lack of a CAPEX requirement seems to smooth the path for managed service sales. Both Dimension Data and AGT are glad for the boost.

Please note: MSPmentor is not suggesting MSPs are recession proof. However, we believe the best-run MSPs are navigating the recession better than traditional break-fix resellers.

Contributing blogger John Moore covers Master MSPs and Web hosts, and has written about the IT channel for two decades. MSPmentor is updated multiple times daily. Follow us via RSS, Facebook and Twitter. And subscribe to our enewsletter, webcasts and Resource Center.