IT Biz Poised for Moderate Growth this Year

MSP TODAY NEWS

IT Biz Poised for Moderate Growth this Year

By Doug Barney

A study done last month by channel-focused non-profit CompTIA finds the IT market will experience meager growth this year, as little as 3.4 percent globally to as high as 5.9 percent. The U.S. will be even slower with a range of 3-4.5 percent, slim pickings indeed.

The good news is this disappointing growth will still outpace the overall global economy, set rise just 2.5 percent in the U.S. and 3 percent worldwide. The research was based on an online poll of 525 IT industry vendors.

A flat market doesn’t mean IT isn’t important – it actually more critical than ever.

“The importance of technology to business success has never been greater as IT continues to transition from supporting tool to a strategic driver,” said Tim Herbert, vice president, research, CompTIA.

At the same, CompTIA highlighted technologies that have made big gains on the last two years, including big data, cloud and mobile apps.

This year it looks like IT services will lead the charge, with hardware continuing to struggle.

There is also good news for employment, where “on the employment front, 41 percent of IT companies plan increased investments in staffing in technical positions this year, compared to 15 percent that plan staffing decreases. Among non-technical positions, 32 percent of firms plan increases and 16 percent decreases,” CompTIA found.

Finally, CompTIA called out 12 trends for this year, which the organization said includes:

Macro Trends

  1. “Technology becomes a core competency for more businesses.
  2. Mass customization gets more sophisticated.
  3. Processes and workflow get a makeover.
  4. Technology is increasingly embraced as the remote control of life.

Technology Trends

  1. Cloud wars intensify.
  2. Diverse devices flood the market.
  3. Big data has a little sibling.
  4. Software's appetite is not satisfied.

IT Channel Trends

  1. When it comes to your channel business, it's OK to stay in two lanes.
  2. Time to rebrand the "trusted advisor."
  3. Back to basics: Reinvesting in technical expertise.
  4. Channel dynamics: Partner or competitor?”

Some Special MSP Advice

A goodly portion of CompTIA members are MSPs, and CompTIA takes great pains to offer up advice and research.

The biggest suggestion is for MSPs to move away from break-fix and build recurring revenue through sticky high-level managed cloud services. And even once you have cloud services, continue to expand them. “The best in class are branching out,” said Jim Hamilton, vice president of member relations at CompTIA. “Services that are well established tend to have restricted margins and tend not to be as profitable,” he explained. “But people who go out and develop new technology solutions tend to be more profitable.”

In fact, Hamilton just didn’t surmise this to be true. The organization did research and found that “the best-in-class companies invested twice as much in new services compared with the average MSP.”

In its “Quick Start Guide to Managed Services” CompTIA offers advice on how MSPs can grow beyond break-fix where your revenue is dependent upon handling incidents and keeping things running rather than providing new value. One way to identify new opportunities is to listen to customers. “Use your IT help desk to spot trends. More than fixing customer problems, your IT

help desk can be your direct connection into your customers’ long-term business planning—revealing their wants and needs through casual conversations with your support personnel,” CompTIA argued. “Next, leverage your NOC (network operations center) to track performance, reliability, and scalability trends within your customer settings.”

One CompTIA member is already living that advice.

“The origin of our offering is not from a product manager, it really comes from the customers themselves. To strengthen the dialog, EnabledSuccess launched a user group that meets several times a year via conference calls,” said Rene Theberge, national sales manager at EnabledSuccess Inc., an Ottawa MSP.




Edited by Cassandra Tucker

MSPToday Editor at Large

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