It's one small piece of information that provides big-time hope to the managed services market. Kaseya says its annual revenue more than doubled in 2007 compared to 2006. Solutions providers can breathe a collective sigh of relief -- at least for the next few weeks -- as they digest the Kaseya news. But we should all keep the news in perspective. Here's why.
Since most platform providers are privately held, it's difficult to measure the overall health of the managed services sector. In the broader economy, IBM provided some hope about IT spending on Monday, but Wall Street remains on edge. Intel recently announced weak results; Citi Group delivered a big loss; and American Express is worried about consumers reducing spending and missing credit card payments.
So, what about the managed services sector? No IT sector is completely immune to an economic slowdown or recession. But three pieces of anecdotal evidence suggest managed service providers and their partners remain relatively upbeat about their current business prospects.
- Kaseya says its 2007 revenue was 215% of the prior year's results. And the company didn't mention seeing any spending slowdowns in Q4 2007.
- Autotask plans to expand its staff by 30 to 40 percent this year amid continued revenue growth.
- Our MSPmentor 100 list -- to be unveiled January 28 -- indicates that most managed service providers enjoyed high double-digit revenue growth in the MSP space this in 2007. Many of the list members more than doubled their managed services revenue compared to 2006.
Hopefully, that lesson won't repeat itself in the managed services space. Current business looks good, but be sure to ignore pundits who claim managed services are completely immune to a recession.