Research Firm Cuts Managed Services Spending Forecast

Research Firm Cuts Managed Services Spending Forecast

Managed Services Reality Check from Insight ResearchFinally, a healthy dose of reality from a market research firm. While many pundits evangelize managed services as recession proof, Insight Research has adjusted its annual managed services forecast downward. In other words, Insight says the managed services market is growing -- but not as quickly as previously expected. Just like you, MSPmentor wants to see this market thrive. But I also welcome responsible research. Take a look.

First, the good news:

  • Despite the slowdown in all US economic sectors, spending on managed services is expected to grow at a compounded rate of nearly eight percent over the next five years, according to a press release from Insight Research.
  • The study predicts revenues associated with the managed services market will grow from nearly $30 billion in 2008 to nearly $43 billion in 2013.
  • The study focuses on managed data center services, managed infrastructure, managed LAN services, managed WAN services and managed mobility services.
Now the reality check. For those who bother to read the Insight press release a bit more closely, you'll find this nugget of info:
"Make no mistakes about it, while telecom is faring better than many other segments of the economy, the recession is certainly having a negative impact on growth, which required that we adjust our annual managed services forecasts downward," wrote Robert Rosenberg, Insight's president. "However, this storm does have a silver lining for the managed services providers, since enterprise IT and telecom managers will be much more willing to listen to the economic logic of outsourcing now that internal staffing is contracting."

MSPmentor and Insight: On the Same Page

Finally, a market research firm that echoes MSPmentor's position: It's great to be an MSP, and mid-market customers want to hear from you. But NO portion of the IT industry -- not even managed services -- is recession proof.

If a vendor or "trusted advisor" tells you otherwise, call their bluff. The most competitive MSPs continue to do well, but they're working extra hard for every new dollar these days.

For more information on the Insight Research report, visit http://www.insight-corp.com/reports/manserv09.asp.

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