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In today’s business environment, an explosion of varied communication, hardware and mobile device options as well as adoption of cloud and hosted applications has made the IT service provider’s role more complex than ever. Our IT Service Provider Benchmarking Study found that this evolution has led to demand for new services and a shift in client business and budgeting priorities – both positive developments for IT service firms.
More than 67.3% of survey respondents found that the expansion of cloud and hosted applications was driving the greatest change in demand for services. Mobile connectivity was another critical driver to 57.7% of respondents. Integrating devices, platforms, applications and other elements of IT infrastructure has led to expanded demands on the network, and, in turn, increased business opportunities for 48.1% of respondents. Finally, the “bring your own device” (BYOD) era has created an important business opportunity, cited by 36.5% of respondents.
The good news is clients are willing to allocate more of their budgets to these growth areas. According to our study, 67.3% of the ITSPs polled reported that their clients were prioritizing the need to support cloud-based apps in budgeting and business priorities, and supporting BYOD environments, also known as “the consumerization of IT,” is also a customer priority according to 42.3% of IT service provider respondents.
As greater demand emerges for integrating such systems and devices with existing IT infrastructures, the role of the IT service provider is changing. Such complex environments need to be planned and managed to ensure effective and seamless integration of services. Many IT service providers are acting as trusted counselors and consultants, helping companies integrate and scale their infrastructures, rather than reactive problem-solvers who are called in when the company has an IT problem or emergency.
As customers reevaluate their budgeting priorities, many recognize the increasing value of flattening their out-sourced IT investment: 53.1% of survey respondents saw the most potential for growth in 2013 in managed services contracts, which are recurring revenue based engagements with specific service level agreements.
The survey results show that IT systems and device integration is changing both the opportunities for IT providers and the business relationship with IT customers. As the landscape shifts, the move to managed service contracts is a “win” for both sides: Customers receive gain the benefit of deeply integrated IT resources without the overhead of enterprise IT, and IT service providers are able to flatten their revenue and embed themselves in their clients’ organization minimizing attrition and creating more dependable revenue streams.
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