Why Managed Services are Hot in 2021

TSIA’s State of Managed Services 2020 report was released at the beginning 2021, revealing an important statistic involving how technical products and services are related in the market. The reported revealed that the revenue ratio between products and services reported by the largest tech companies has reversed. Services now make up 60% of revenue, leaving only 40% of tech expenditures applied to product. Managed services as an industry therefore is expected to continue to thrive.

If you are an SMB strategizing for a more streamlined and cost-efficient process, as well as looking for ways to acquire and retain more customers and revenue  – 2021 may be the year you should seek out managed services to help.

SMB Owners Embrace Managed Services

According to the Salesforce Small and Medium Business Trends Report, SMB operations are handicapped by several constraints, including access to capital, accessing the appropriate technology to meet their needs, and recruiting/hiring the right personnel with the right skill set. Of course, a strong cyber security response is also top of mind. Here are the top reasons SMBs are flocking to managed services providers – and why you should consider doing so.

1. Access to latest technology: SMBs often have teams who are overworked and understaffed. They may also have a skills gap, meaning they don’t have the skills or training necessary to keep up with a rapidly changing IT landscape. These companies easily recognize the benefit of working with an outside technical support team or managed service provider (MSP). Outsourcing provides an extra staff of IT experts who can react and troubleshoot to issues which arise.  Perhaps more importantly, clients have access to the latest technology and solutions; protecting uptime and increasing profitability. The managed services model solves the labor constraint issue and prevents internal IT departments from being caught behind in both day to day issues and long-term goals.  By employing an MSP, businesses can access business-grade technology and leverage tools to maximize their IT infrastructure’s reliability.
2. ROI and cost savings: One of the main business benefits of managed services is increased cost savings. IT budgets are made up of many line items: hardware, software and network infrastructure costs, as well as expenses related to ongoing maintenance. Labor cost is a significant line item for any company, but especially for SMBs who depend on managed service providers. Some companies need to reduce the amount of IT staff because the expense of compensating their staff is too high for their business model. Depending on their size, a company may lack a dedicated IT team altogether, forcing other employees to try to function as “IT personnel”, causing frustration and slowing down productivity.The ROI of managed services can be supported by looking at how the MSP will free up employee time, giving them the freedom to dedicate their time to more high-value projects and  increasing productivity.
3. Enhanced security: Security is a complex and ever-present issue for all small businesses and companies. The Ponemon Institute recently reported that 76% of SMBs have reported a cyberattack within the last 12 months. Business email was the greatest source of compromise with ransomware attacks right behind.MSPs are known as experts in cybersecurity services. In fact,  91% of SMBs would sign up for managed services to get the right cybersecurity protection, and would even commit to 30% higher fees to gain that level of protection.
4. Peace of mind: Sometimes the value of a service is intangible. SMBs don’t want to worry about adequately staffing IT operations, the reliability of their networks, or keeping their connections secure. More and more, SMBs are choosing to work with MSPs to get the round-the-clock coverage they need while gaining the freedom required to focus on growing their own business.Have more questions? Call Alliance IT today for a consultation. Let us show you how managed services can set your company up for a successful 2021.