accelerating managed services

Channel

Bytes

Accelerating Managed Services

Copyright (c) 2014 CompTIA Properties, LLC. All Rights Reserved. | CompTIA.org

On Tap For Today

The channel’s attraction to managed services

Managed services adoption to date

Customer priorities and demands

2

WHY MANAGED SERVICES?

3


Why is the Channel Transitioning to Managed Services?

MARKET FACTORS 1

TECHNOLOGY FACTORS 2

MODEL FACTORS 3

• Economic factors

• Competition / commoditization

• Shifting expectations

• Alternative delivery models

• Mobile business capabilities

• Emerging technologies

• Declining margins complexity

• Engagement type / cash flow

• Operational excellence


Channel’s Level of Expertise with Managed Services Model

10%

52%

39%

Early on

Learning

Curve/Too

Soon to Tell

Skilled

Expert

Competent

and Getting

Better

Self-Assessed Characterization “Skilled Experts” in Managed Services by Size

Source: CompTIA’s Trends in Managed Services Operations study Base: 198 U.S. Managed Service Providers

71% Large firms ($50M and up in revenue) 30% Medium-sized firms ($5M-$49.9M) 25% Small firms (Less than $5M)

HALF of channel firms report doing some managed services in

last year.

AND YET…

6


The Reality: Growth of Managed Services Not Soaring

“Managed services is a model of outsourcing all or parts of IT functions to an outside firm through an ongoing contractual relationship, such as a recurring monthly fee. The MSP assumes responsibility for the proactive management, monitoring and maintenance of the IT functions or systems covered by the service level agreement (SLA).”

Just 3 in 10 end users report using managed services for some or all of

their IT


Technology’s Stature Growing for All Size Companies

Trending of VERY IMPORTANT Rating of Technology by Firm Size

48%

36%

59% 65%

55%

71%

<50employees

50-99employees

100+employees

2014 2016 Projection

9%

43%

49%

NET somewhatimportant / not that

important

Important

Very important

Rating of Overall Importance of Technology to Business Success

Source: CompTIA’s 3rd Annual Trends in Managed Services study Base: 400 businesses (end user)

NET importance = 92%

18%

56%

26%

Market Offers Myriad Ways to Manage Technology

Satisfaction Levels with Current IT Management Methods

Formal IT department with dedicated staff

Informally handled among non-IT staff

Periodic use of outside firms/third parties for various projects and/or troubleshooting

Outsourcing/contractual arrangement with a managed services provider for ongoing responsibility for some or all of IT functions

Chief Ways IT is Handled Within Businesses Today

Very

Satisfied

Mostly

Satisfied

NET At Least

Somewhat

Dissatisfied

Companies that underwent a reduction or elimination of in-house IT staff due to contracting with an MSP recorded the highest percentage of “very satisfied” responses.


MAPPING TO CUSTOMER PRIORITIES

10


End User Strategic Business Priorities for Next 12 Months

16%

34%

37%

42%

50%

52%

56%

Managing competitive threats

Improving operational efficiency

Innovating more effectively

Improving data analytics forbetter/faster decisions

Reaching new customer segments

Improving staffproductivity/capabilities

Reducing costs/overhead


Improve security

Proactive approach to IT problems

Better uptime

Gain access to newer

technologies

Cost savings over in-house IT

1

2

3

4

6

7

8

9

5 10

Peace of mind

Free internal staff for strategic work

Tap into cloud solutions

Lack of internal IT

Handle remote office IT

Top 10 Factors Driving Managed Services Adoption

Source: CompTIA’s 3rd Annual Trends in Managed Services study Base: 400 businesses using managed services in some way


End User Main Decision Priorities in Choosing an MSP

1 Proof of expertise/skills by MSP

Proof of experience by an MSP

Opportunity to speak to other MSP customers

Better insights into the hand off between MSP and internal IT

Easier to understand service level agreement (SLA)

2

3

4

5

Source: CompTIA’s Trends in Managed Services study Base: 273 managed services users


SLA Elements Deemed Most Important by Users

9%

14%

14%

20%

32%

55%

61%

63%

Service cessation provisions

Perfomance targets

Time and material model

Base fee with optional services available toadd/remove at anytime

Business continuity/operational backups

Response times

Data security/privacy

24/7 support


THE NEW IT BUYER, UPSELLING AND PRICING

15

Tailoring the Sales Conversation to Right Buyer

4%

21%

27%

48%

Other

Committee comprised of IT and non-IT executives

Non-IT executive, such as CFO, COO, General Manager, etc.

CIO or other senior IT staff


Who’s Driving the Move to a Managed Services Contract?


Further Proof: IT Channel Firms Also See Shift in Purchasing Authority Going to Business Executives

IT Firm Assessment of Shifts in Purchase Authority

10%

36%

44%

11%

Don't know

No change – expect CIO/IT dept. to continue as primary IT purchase

authority

Modest change

Significant change – expect noticeable shift in purchase

authority to business executives

Actions Taken by IT Firms to Address Shifts in Purchase Authority

Source: CompTIA 2014 Industry Outlook | Base: 525 executives at U.S. IT firms

38% Focus less on HW/SW specs and more on total solutions 35% Training to better equip sales staff to sell solutions to business executives 34% Better align solutions to meet business needs and technical requirements 32% Use of social media platforms to target business executives 25% Redesign marketing collateral with more of a business user focus


IT Functions at Top of List to Move to Managed Services

27%

27%

28%

29%

31%

34%

36%

38%

Application monitoring

Business continuity/disaster recovery

Web site design

Database management

Help desk/IT support

Network administration/maintenance

Web site hosting

Security (firewalls/antivirus)

Source: CompTIA’s Trends in Managed Services study Base: 273 managed services users


Pricing Trends for Managed Services Today

Managed Services Pricing

31% By user consumption 22% Fixed recurring fee 20% Per user 19% Varies based on customer 9% Per device

Source: CompTIA’s Trends in Managed Services Operations study Base: 198 U.S. Managed Service Providers

1

2

3

Negotiate terms on customer-by- customer basis

Keep pricing the same unless new services added

Increase pricing based on set formula or metric

Contract Renewal Pricing Procedures

Information That Would Improve Managed Services Process

1

2

3

4

5

6

7

8

More quantifiable ROI

Clarity on types/frequency of activity reporting

Clarity in branding for search purposes

More options to alter or waive contract if things go wrong

Easier to understand/ negotiate SLA

Better insights into handoff with internal IT

Proof of experience (customer refs)

Proof of expertise (certifications, credentials)
