….are you jumping on board or are you going to be left behind?
The IT market has drastically changed over the past few years and many companies are adopting the new business processes, however, there are plenty of organizations that are still making decisions like it is 1997. Managed Services market growth now outpaces the rest of the IT industry, but some companies are still unsure about the benefits of working with a Managed Service Provider (MSP). Unfortunately those businesses are being left behind by their competition.
– (1984-1997): Up until the late 90’s businesses deployed their own IT systems.
They either had their own IT staff or used a small local IT company. These businesses bought solutions from that IT company, would call them when there was a problem with the systems and then be billed time and materials. IT companies loved this model because they were set up to make money when there were issues. This was a completely reactive model and a very high costs for the client. Not only did they have to pay the IT companies’ bill, but they also had employees that could not be productive during system downtime. Most businesses largest monthly cost is their payroll, so imagine what it would cost you to have 3 hours, 1 day, or 3 days of downtime. This business model had a large capital investment for IT and a large operating expense as well. Most of the work was completed onsite and very inefficient.
– (1997 to 2011): In the late 1990s and early 2000s a new software was created.
Remote management and monitoring software was introduced to the marketplace and allowed IT companies to manage their customers remotely. During this time companies started to outsource specific IT functions under a new business model – managed services. This new model allowed IT companies to be more efficient, more scalable, and, most importantly, provided cost savings to their customers. This new model allowed the IT channel to provide enterprise level support at a fraction of the cost of having it in house. Not only did clients receive better IT service, but their technology was being managed proactively which reduced downtime. Reduced downtime equals increased efficiencies which equals increased profits. This new model offered a huge opex savings to the marketplace.
– (2012 and onward): Cloud has become a big buzzword in the IT marketplace for a reason.
Cloud computing allows companies to centralize and virtualize their systems, which creates greater operational efficiency, and reduced capital expenditures. Moving forward technology will continue to change and will be delivered as a service. More companies are going to start paying a fixed monthly fee for their IT systems and services. Technology is going to continue to change and be more of an opex expenditure instead of a capex. More and more businesses are adopting this new model and typically, this allows them to outpace their competitors.
We’re seeing businesses adopt the new model at a very fast pace. They are tired of dealing with internal systems and just want their IT to work. They are partnering with managed IT service providers to gain proactive support and cloud computing in a bundled package. Trust me, the competition is doing this and it’s time to hop on this ride to gain that advantage for your organization!
