CompTIA sees tepid growth for MSPs

It’s going to be an uphill climb for managed services providers as the MSP market is in for a slow growth, according to a survey by the information technology industry education and certification association CompTIA.

In a survey of 400 IT and business professionals involved in IT decision making as well as in-depth interviews with 17 top management level professionals, CompTIA found that current IT management and outsourcing behaviours indicate that majority of firms are satisfied with the performance of their in-house IT departments and are using less outside IT help.

Carolyn April, director for industry analysis with CompTIA said the survey covered United States-based respondents but findings could applied to MSP market north of the border as “the situation in Canada is likely to be as close to what is seen in the U.S.” For example MSPs in both countries tend to target small and medium sized businesses (SMB).

“We found that only three out of 10 end user organizations are using some form of managed services,” she said. “This represents tepid growth in the MSP market.”

April, however, was quick to add that MSP is not a dying sector.

“What these findings mean is not that MSP, as a model, is a failure. It just means that MSP firms have a big challenge ahead of them,” she said.

For instance, a recent report from research firm MarketsandMarkets predicts that the global managed services market will grow from $143 billion in 2013 to $256 billion in 2018. Research firm Gartner also estimates that global IT outsourcing market amounted to $288 billion last year while analyst firm International Data Corp. (IDC) predicts the North American business process outsourcing (BPO) market will grow to $100 billion by 2017.

For now, CompTIA found that nearly two thirds (63 per cent) of organizations have a formal in-house IT department.

Another 43 per cent said IT is handled by an in-house staff which they do not actually classify as an IT department. This is more likely to happen in small companies that cannot afford to hire staff for IT specific duties.

MSPs will be glad to know that last year 75 per cent of organizations, whether they have an internal IT department or not, availed themselves of an outside IT firm to manage one or more of their IT functions.

One interesting finding also indicated that companies that had to reduce or eliminate their IT staff in 2013 as a result of deciding to work with an MSP, reported the highest percentage of “very satisfied” responses in rating how their IT functions were being handled.

Still April detects a sense of cautiousness among organizations as they tend to farm out low level IT tasks to MSPs.

The top IT tasks handled by MSPs were:

  • IT repair and troubleshooting – 70 per cent
  • IT deployment, installation and integration – 58 per cent
  • It consulting – 55 per cent
  • Web design – 51 per cent
  • Cloud computing initiative – 50 per cent
  • Help desk and network management – 48 per cent
  • Cyber security needs – 43 per cent

“I guess it’s just human nature,” said April. “Something has to happen first before businesses switch to MSPs. It’s like they’re saying ‘If it ain’t broke, don’t fix it.’”

(To be continued – Where MSP opportunities are)



Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Nestor Arellano
Nestor Arellano
Toronto-based journalist specializing in technology and business news. Blogs and tweets on the latest tech trends and gadgets.

Blogger Spotlight

Avatar photo

Latest Blogs

CDN in your inbox

CDN delivers a critical analysis of the competitive landscape detailing both the challenges and opportunities facing solution providers. CDN's email newsletter details the most important news and commentary from the channel.