Led by CompTIA Market Research, learn about the IT channel’s attraction to managed services, managed services adoption to date, and customer priorities and demands.

1. Channel
Bytes
Accelerating Managed Services

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On Tap For Today
 The channel’s attraction
to managed services
 Managed services
adoption to date
 Customer priorities and
demands
2

3. WHY MANAGED SERVICES?
3

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Why is the Channel Transitioning to Managed Services?
MARKET FACTORS1
TECHNOLOGY FACTORS2
MODEL FACTORS3
• Economic factors
• Competition / commoditization
• Shifting expectations
• Alternative delivery models
• Mobile business capabilities
• Emerging technologies
• Declining margins  complexity
• Engagement type / cash flow
• Operational excellence

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Channel’s Level of Expertise with Managed Services Model
10%
52%
39%
Early on
Learning
Curve/Too
Soon to Tell
Skilled
Expert
Competent
and Getting
Better
Self-Assessed Characterization “Skilled Experts” in
Managed Services by Size
Source: CompTIA’s Trends in Managed Services Operations study
Base: 198 U.S. Managed Service Providers
71% Large firms
($50M and up in revenue)
30% Medium-sized firms
($5M-$49.9M)
25% Small firms
(Less than $5M)
HALF of channel firms report
doing some managed services in
last year.

6. AND YET…
6

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The Reality: Growth of Managed Services Not Soaring
“Managed services is a model of
outsourcing all or parts of IT functions
to an outside firm through an ongoing
contractual relationship, such as a
recurring monthly fee. The MSP
assumes responsibility for the
proactive management, monitoring
and maintenance of the IT functions
or systems covered by the service level
agreement (SLA).”
Just 3 in 10 end
users report using
managed services
for some or all of
their IT

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Technology’s Stature Growing for All Size Companies
Trending of VERY IMPORTANT
Rating of Technology by Firm Size
48%
36%
59%
65%
55%
71%
<50
employees
50-99
employees
100+
employees
2014 2016 Projection
9%
43%
49%
NET somewhat
important / not that
important
Important
Very important
Rating of Overall Importance of
Technology to Business Success
Source: CompTIA’s 3rd Annual Trends in Managed Services study
Base: 400 businesses (end user)
NET importance = 92%

9. 18
%
56
%
26
%
Market Offers Myriad Ways to Manage Technology
Satisfaction Levels with Current IT
Management Methods
 Formal IT department with
dedicated staff
 Informally handled among non-IT
staff
 Periodic use of outside firms/third
parties for various projects and/or
troubleshooting
 Outsourcing/contractual
arrangement with a managed
services provider for ongoing
responsibility for some or all of IT
functions
Chief Ways IT is Handled Within
Businesses Today
Very
Satisfied
Mostly
Satisfied
NET At Least
Somewhat
Dissatisfied
Companies that
underwent a
reduction or
elimination of in-
house IT staff due
to contracting with
an MSP recorded
the highest
percentage of “very
satisfied”
responses.
Source: CompTIA’s 3rd Annual Trends in Managed Services study
Base: 400 businesses (end user)

10. MAPPING TO CUSTOMER
PRIORITIES
10

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End User Strategic Business Priorities for Next 12 Months
16%
34%
37%
42%
50%
52%
56%
Managing competitive threats
Improving operational efficiency
Innovating more effectively
Improving data analytics for
better/faster decisions
Reaching new customer segments
Improving staff
productivity/capabilities
Reducing costs/overhead
Source: CompTIA’s 3rd Annual Trends in Managed Services study
Base: 400 businesses (end user)

12. Improve security
Proactive approach to IT problems
Better uptime
Gain access to newer
technologies
Cost savings over in-house IT
1
2
3
4
6
7
8
9
5 10
Peace of mind
Free internal staff for
strategic work
Tap into cloud solutions
Lack of internal IT
Handle remote office IT
Top 10 Factors Driving Managed Services Adoption
Source: CompTIA’s 3rd Annual Trends in Managed Services study
Base: 400 businesses using managed services in some way

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End User Main Decision Priorities in Choosing an MSP
1 Proof of expertise/skills by MSP
Proof of experience by an MSP
Opportunity to speak to other MSP
customers
Better insights into the hand off
between MSP and internal IT
Easier to understand service level
agreement (SLA)
2
3
4
5
Source: CompTIA’s Trends in Managed Services study
Base: 273 managed services users

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SLA Elements Deemed Most Important by Users
9%
14%
14%
20%
32%
55%
61%
63%
Service cessation provisions
Perfomance targets
Time and material model
Base fee with optional services available to
add/remove at anytime
Business continuity/operational backups
Response times
Data security/privacy
24/7 support
Source: CompTIA’s 3rd Annual Trends in Managed Services study
Base: 400 businesses using managed services in some way

15. THE NEW IT BUYER, UPSELLING AND
PRICING
15

16. Tailoring the Sales Conversation to Right Buyer
4%
21%
27%
48%
Other
Committee comprised of
IT and non-IT executives
Non-IT executive, such as CFO,
COO, General Manager, etc.
CIO or other senior IT staff
Source: CompTIA’s 3rd Annual Trends in Managed Services study
Base: 400 businesses using managed services in some way
Who’s Driving the Move to a Managed Services Contract?

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Further Proof: IT Channel Firms Also See Shift in
Purchasing Authority Going to Business Executives
IT Firm Assessment of Shifts
in Purchase Authority
10%
36%
44%
11%
Don't know
No change – expect CIO/IT
dept. to continue as
primary IT purchase
authority
Modest change
Significant change – expect
noticeable shift in purchase
authority to business
executives
Actions Taken by IT Firms to Address
Shifts in Purchase Authority
Source: CompTIA 2014 Industry Outlook | Base: 525
executives at U.S. IT firms
38% Focus less on HW/SW specs and more
on total solutions
35% Training to better equip sales staff to
sell solutions to business executives
34% Better align solutions to meet business
needs and technical requirements
32% Use of social media platforms to target
business executives
25% Redesign marketing collateral with
more of a business user focus

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IT Functions at Top of List to Move to Managed Services
27%
27%
28%
29%
31%
34%
36%
38%
Application monitoring
Business continuity/disaster recovery
Web site design
Database management
Help desk/IT support
Network administration/maintenance
Web site hosting
Security (firewalls/antivirus)
Source: CompTIA’s Trends in Managed Services study
Base: 273 managed services users

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Pricing Trends for Managed Services Today
Managed Services Pricing
31% By user consumption
22% Fixed recurring fee
20% Per user
19% Varies based on customer
9% Per device
Source: CompTIA’s Trends in Managed Services Operations study
Base: 198 U.S. Managed Service Providers
1
2
3
Negotiate terms on customer-by-
customer basis
Keep pricing the same unless new
services added
Increase pricing based on set
formula or metric
Contract Renewal Pricing
Procedures

20. Information That Would Improve Managed Services Process
1
2
3
4
5
6
7
8
More quantifiable ROI
Clarity on types/frequency
of activity reporting
Clarity in branding for
search purposes
More options to alter or
waive contract if things go wrong
Easier to understand/
negotiate SLA
Better insights into handoff
with internal IT
Proof of experience
(customer refs)
Proof of expertise
(certifications, credentials)
Source: CompTIA’s 3rd Annual Trends in Managed Services study
Base: 400 businesses using managed services in some way

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Carolyn April
capril@comptia.org
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