From The Expert Feature Article
May 06, 2013

MSPs on the Rise, INSIGHT Reveals

With a name like INSIGHT Research, you better have something special to say, especially when you put the word insight in all caps.

In its new "Managed Services in an IP World: Global Opportunities for Wireless and Wired Networks, 2013-2017" report, the research house reveals a bright future for MSPs.

Two main factors are driving MSPs growth. First, there is the worldwide recession, which is just now easing in some quarters. This means IT staffs are leaner than a Kentucky Derby jockey.

At the same time, there is a more and more pressing need to implement advanced technologies to drive competitive advantage.

Put two and two together and you get a healthy demand for expert MSP services, services expected to grow on average 11.3 percent a year globally, Insight says. In the U.S., overall revenue will exceed $50 billion in 2017. “INSIGHT’s analysis suggests that the global Managed Services market will grow from $137 billion in 2012 to $235 billion in 2017, at an 11.3 percent CAGR,” the company revealed.

The Internet is also driving the need for services, as there are constantly new technologies and techniques to master. "A large percentage of business activity now depends on the Internet for everything from electronic commerce to intranet applications to customer service," said Fran Caulfield, research director for INSIGHT. "These data applications are driving exponential traffic growth onto corporate networks, while increasing their complexity. Managed services allow corporations to handle this growth, while outsourcing the most complicated elements to the skilled service provider. Service providers also win, as they grow beyond basic transport services, increase margins and reduce churn."

The MSP space is a bright spot in an otherwise dull telecom market, one where older core services have reached near saturation and experience the low growth common to mature industries.

“The Managed Services market, on the other hand, will grow faster than basic transport as businesses of all sizes look to service providers to deliver the next generation of business applications, while simultaneously migrating their supporting telecom networks to newer technologies, such as IP, cloud and wireless,” INSIGHT said. “The complexity faced in managing these applications and networks, coupled with limited resources, declining budgets, disparate networks and support systems, is driving the IT manager to managed services.”

Finally, managed services are the key to keeping enterprises competitive in lean staffing times.

“With the global and the U.S. economy stagnant, and businesses not hiring, enterprise IT departments must still find a way to deploy those new applications. With limited IT staffing, the enterprise can focus on the developing the corporate application, while outsourcing the network design, installation and management to a provider who has the ‘state of the art’ tools and skills to do it right,” the report said. “New cloud-based applications can be deployed in weeks, allowing the enterprise to rapidly respond to their customer’s evolving needs.”

You can get an executive summary of the report, but you must register first.

Edited by Alisen Downey