the top reasons enterprises outsource it to msps

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Phil LaForgeVice President –Service ProvidersNimsoft

Top Reasons that Enterprises Outsource IT to MSPs

Jim FreyManaging Research Director EMA


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Survey Background› Goal: find out what and why enterprises are outsourcing to service providers.

› Surveyed 100s of executives, mid-level managers and IT contributors at mid to large (1,000-20,000 employees) enterprises.

› Narrowed results to the first 100 to meet the size and title criteria and have utilized MSP services.


Survey High Level Results› Broad existing practice and future interest in use of MSPs

EMA recommendation: Any organization seeking to balance business

priorities against near-term and long-term operation costs should consider utilizing MSPs—either as a means to supplement existing staff or as a primary approach to

operations.


Respondent Demographics

15%

25%

34%

26%

10,000 - 19,999

5,000 - 9,999

2,500 - 4,999

1,000 - 2,499

Top Five Industries in Order of Representation:• Manufacturing• Finance/Banking/Insurance• Healthcare• Education• Retail/Wholesale/Distribution

2%

2%

28%

37%

20%

6%

5%

Don’t know

N/A (government/non-profit)

$1 Billion or more

$100 Million -r $1 Billion

$20 Million- $100 Million

$5 Million - $20 Million

$1 Million - $5 Million

Less than $1 Million

Number of Employees

Annual Revenue

7%

8%

13%

11%

24%

16%

13%

8%

Don't know

$100 million or more

$50 million - $100 million





Less than $1 million

Annual IT Budget


Enterprise experience with MSPs

Sample Size = 100

What level of experience does your organization hav e with MSPs?

6%

39%

55%

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

We have previously used an MSP

We are planning to engage an MSP

We are currently using an MSP


Why do enterprises outsource to MSPs?

Who primarily drives the decision to contract an MS P within your organization?

12%

14%

5%

21%

48%

3%

6%

6%

15%

71%

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

Other Executive-level sponsor (Pleasespecify)

CFO

Line of Business Management

CEO

Line IT Support

CIO

Executives All OtherSample Size = 100; Responses not shown received 0%

CIO Most Commonly Making MSP Contract Decision

Sample Size = 100, Valid Cases = 100

Which of the following are the three (3) most import ant considerations in your organization’s decision to outsource IT manage ment to and MSP?

1%

9%

11%

13%

14%

22%

25%

26%

31%

34%

36%

37%

41%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Other (Please specify)

Gain visibility in system performance

Function is difficult to manage/out of control

Skilled resources are not available

Avoiding direct personnel costs

Better coverage for off-hours

Avoiding capital expense

Accelerate cloud adoption

Improve system uptime

Free internal resources to focus on more strategicprojects

Improve focus on core business

Improved technical experience/depth

Better total cost

Cost Factors Dominate, followed by Resource Considerations


What do enterprises look for in an MSP?


Q13_1 What attributes does your organization look f or when selecting an MSP? Select all that apply.

1%

12%

18%

18%

25%

26%

33%

34%

35%

35%

37%

50%

55%

55%

66%

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


Published Service Catalog

Middle market/enterprise customers

SAS-70 Audited or PCI

Customer portal, reporting

Owns/Leases Tier 3+ Data Center

Services highly regulated industries

Implements ITIL-certified practices

Monitoring across all tech. domains

Has 7x24 NOC facilities

Industry-specific certifications

Solid capital base, vendor stability

Service level agreements

Reputation/references

Proven experience, depth of expertise

% Valid Cases (Mentions / Valid Cases)

Credibility Gets most Attention for Selecting an MSP


Which of the following would be valid drivers for o utsourcing to more than one (1) MSP at a time? (Select all)

32%

61%

73%

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

Differing geographical regions of coverage

Differing domain / technology expertise

Balancing risk / business continuity

Most Would Consider Multi-sourcing MSPs


What are the current or potential inhibitors/barrie rs for engaging an MSP?(Select all)

3%

39%

44%

50%

68%

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


Lack of responsiveness

Uncertainty of cost

Loss of control

Security risk

Security, Control Top MSP Engagement Concerns


What services do enterprises outsource to MSPs?


What IT management functions is your organization p lanning to outsource to an MSP in the next year? Select only those that are planned.

24%

32%

32%

35%

35%

38%

41%

41%

54%

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

Desktop Management

Network Operations Center (NOC)

Security Management

Network/Systems Management

Application Management

ITIL Processes

Business Service Management

Storage/Recovery

Service desk, Help Desk


Priorities for Coming Year – Service Desk and Storage/Recovery


Which of the following infrastructure technologies is your organization planning to have managed by an MSP? Select only thos e that are planned.

2%

22%

39%

44%

44%

44%

51%

51%

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


Physical desktops

Physical Servers

Data Center infrastructure

LAN/WAN

Virtual desktops

Virtual Servers

Storage


Storage and Virtual Servers Most Commonly Planned for Management Outsourcing


Which of the following application and services tec hnologies is your organization planning to have managed by an MSP? Se lect only those that

are planned.

18%

22%

29%

38%

44%

47%

60%

60%

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

Video

VoIP

On-premise applications

Databases

SaaS applications

Public Cloud

Hosted applications

Private Cloud


Cloud and Hosted Apps Most Commonly Planned for new MSP outsourced management


What does the future hold?


79%

21%

50%

50%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

No

Yes

Executives All Other

Many Can See an All-MSP Future

Do you envision a time where ALL of your IT is mana ged by MSPs?

Sample Size = 100

What % of your entire IT function is managed by an MSP? Current vs. Planning

1%

11%

22%

57%

9%

2%

7%

20%

36%

32%

3%

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

100%

76-99%

51-75%

26-50%

1-25%

0%

Planning Currently

Organizations Planning Significant Growth in % of IT Function Managed by MSPs


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the top reasons enterprises outsource it to msps

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