For many small and medium sized businesses (SMB) and value-added resellers (VAR), the cost and technical complexity of maintaining an in-house network, complete with security and workable databases, are factors that are driving an outsourcing trend for more cost-effective management.
The trend is among several reasons SMBs and VARs are turning to IT management companies like ConnectWise who provide professional services automation (PSA) software. ConnectWise reports that demand among VARs for their Managed Services Platform has been strong since its release last November.
“IT Outsourcing is the future of IT Solutions Providers serving the SMB
market, and many VARs are realizing that unless they jump on the bandwagon, they will be left in the dust,” says Arnie Bellini, President of ConnectWise PSA.
“We anticipated this trend quite a while ago and responded by building a Managed Services Platform add-on to our PSA product that allows our clients to incorporate their MSP (management service provider) tools into our software. This enables them to manage many of their clients’ needs remotely, increasing service levels and decreasing costs.”
Much of the cost accelerating the trend for VARs is created by shrinking margins in hardware and software sales that have made it difficult for business to earn a profit from those revenues.
The growing view of “software as a service” is building trust in these services along with the desire of many SMBs to add predictability to their monthly IT expenses.
Gartner reports that unless VARs transition to the new Managed Services model, at least 40 percent are at risk of “going belly up.” Another important factor is that SMBs have a great need for local strategic IT partners to help them build IT strategic plans and manage them, which local VARs are uniquely poised to do.
On the more technical side of things, these managed services offer an easier solution to network security as hosted solutions provide defenses against spam, viruses, phishing, and pharming.
While IT outsourcing has been a trend with large companies for most of
this decade, these factors have converged to accelerate this solution among small and midsize businesses. Gartner reports in a recent survey that nearly 60 percent of SMBs are now interested in managed services.
