Information and Opportunities for Service Providers

Market Trends,

The global managed services market is expected to grow from $107 billion

in 2014 to $193 billion by 2019.1

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.

Introduction

0%

5%

10%

15%

20%

25%

30%

35%

0%

5%

10%

15%

20%

25%

30%31%

23%

6%

17%

5%

19%

Number of customers/devices supported72% of service providers support less than 100 customers per year, and two-thirds report supporting 100 or more devices for their customers.

Support 1-100

customers

annually = 72%Support 100+

devices = 67%

How many customers on average do you typically support or manage per year?

How many total devices (e.g., networking devices, desktop PCs, printers, mobile devices, etc.) do you

currently support for your customers?

16%

26%

4%

10%

10%

7%

14%

14%

Less

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Less

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101-

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101-

250

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now

0% 10% 20% 30% 40%5% 15% 25% 35%

Customer industries supportedService 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

Types of service and solution offeringsTop services offered include network and connectivity support, patching/ updating, desktop support, backup, server support, remote monitoring, desktop security and service desk.

47%60%37%

The number of service providers that are currently offering or plan to offer emerging technologies

(Multiple selections permitted)

Cloud services

Software-Defined Networking (SDN)

Software-Defined Data Center (SDDC)

Service approachOf those that currently provide or plan to provide hosting services:

(Multiple selections permitted)

53%

58%42%

44%host (or plan to

host) the services themselves

contract/managed services

one-time break/fix services

partner hosts or will host services

71%

61%

56%

48%

31%

7%

0% 30% 60%10% 40% 70%20% 50% 80%

Purchase channelsService 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

Online/ e-commerce

Through a reseller

Though a VAR/ VAD

Through a retail store

Other

0% 20% 40% 60% 80% 100%

91%

80%

77%

60%

29%

Vendor/partner selection criteriaThe 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

Quality of support

Competitive pricing

Brand reputation

Sales enablement/ marketing materials

0%

20%

40%

60%

80%

100%

88%

54%

6%

38%

32%35

%

80%

52%

PublicationsIndustry

affiliations/ groups

Internet searches

Referrals/recommendations

Events Analysts Social media Other

Resources for researching vendorsWhen 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)

Improve operational efficiency

Sustain current business

Expand service/ solution offerings

Expand customer

base

Expand geo- graphically

Reduce operating

costs

Reduce complexity

Improve regulatory compliance

Position ourselves for acquisition

58%

79%

35%

2%

14%

7%

11%

48%

18%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Business goalsService providers are primarily focused on expanding their customer base and their service and solution offerings in the next 2–3 years.

What are your primary business goals for the next 2 to 3 years?

(Up to three selections permitted)

54%

53%

33%

29%

23%

20%

19%

12%

8% 7%

5% 2% 5%

Attr

actin

g ne

w c

lient

s

Gro

win

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alin

g th

e bu

sine

ss

Diff

eren

tiatin

g se

rvic

e of

fering

s

Find

ing

good

/re

liabl

e pa

rtne

rs

for

outs

ourc

ing

Trai

ning

sta

ff

Onb

oard

ing

new

clie

nts

Attr

actin

g to

p ta

lent

Man

agin

g ex

istin

g cl

ient

s

Reta

inin

g to

p ta

lent

Man

agin

g ou

tsou

rced

pro

ject

s

Oth

er

Non

e

Don

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now

60%

50%

40%

30%

20%

10%

0%

Business challengesThe 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)

Addressing challengesService 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.)

“Pricing that scales and reduces with our growth.”

“Send referrals for new opportunities.”

“Attracting top talent.”

“Improve financing options.”

Partner with InsightInsight 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 . Respondents were required to be IT service providers, managed service providers or IT consultants in the U.S.

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