The managed IT services industry is expected to growing at an astounding rate of 12.5% annually through to 2019 to a value of $193 billion worldwide. Which is pretty significant when in 2012, the industry was predicted to reach about $45 billion by 2016.
Managed services are described as skilled outsourcing functions that transfer some, or all in-house functionalities to be managed by a third-party managed service provider. The outsourced services are typically provided for a single monthly payment on a subscription basis.
JDL Technologies published a survey in January 2016 survey of IT executives that provides some insights into the use of managed services and managed service providers.
The most astounding facts for me were the following about cost savings:
The average cost benefits reported by surveyed companies who switch to managed services range from:
Average Annual Savings = 30%-40%, and
Average IT Efficiency Increase = 50%-60%
The same was found for companies adding managed services to existing in-house IT capabilities, according to “Managed Services Market” by Managed Data Center.
You would think that the cost savings would be the main reason companies decide to sign up for most companies…but it turns out cost isn’t even in the top three.
Reason #1 -- ”Simplified IT Management” for 37% of companies surveyed;
Reason #2 -- Improved Security (33%); and
Reason #3 -- Increased Efficiency (29%)
In another recent survey, CompTIA’s 4th Annual Trends in Managed Services report, uncovered similar factors driving managed services decisions for end users. The issue of cost savings came in at #4 here:
Adoption Drivers: Also of significant note in this survey were the top three factors that initially drive the use of managed IT services. They are
#1) Becoming more efficient;
#2) dealing with growing information technology complexity; and
#3) improving reliability/reducing downtime.
So it seems to me that improving business processes while strengthening IT systems go hand-in-hand for forward-thinking businesses. A better functioning network minimizes issues, allowing more time to focus on what matters most—the business.
As the complexities of evolving technology become more and more challenging, a growing number of companies are finding solutions with managed services. Whether upgrading or contracting out, too many companies still leave this decision until after a major event. They don’t worry about their network system until it breaks, or worse. That’s when everything comes to a sudden stop and your IT system is now in full focus.
The problem with this is that it always costs a lot more when it’s a little late. The sudden unplanned investment in new hardware and software often necessary at this point can become very expensive to catch up on. And the disruption to business and lost or stolen data can be many times the value of the fix.
It seems a pretty attractive option when professionally managed services can give you stress-free and smoother running operations, less down-time and risk of loss, plus a more competitive edge in your industry—all while saving you money and time.
These are the real reasons why managed IT services are growing. Maybe they are good enough for you too?