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Analysis: Mid-market turns to managed services

A consensus is emerging that only 3% of companies that reduced their IT staff during the recession are planning to recruit to fill the shortages.

The research is stacking up that firms that shed staff to cut costs are not going to bring them back.
 
But they continue to require technical help and will be increasingly turning to the channel for this.

Small companies have always used the channel but mid-market companies have had some resources in-house. That is no longer the case with most having cut back in the downturn.
 
What that means in practical terms is managed services. At a seminar run by MicroScope and Kaysea last week in London, the consensus seemed to be that the mid-market in particular was opening up.

"We have resellers that are now sealing significant deals with mid-market companies and making a business on the back of it," a Kaysea spokesman told MicroScope.

Doubters have only to look at the research from Esteem Systems and the recent job figures from the Recruitment and Employers Confederation (REC), which sets out the current situation quite plainly.

Alastair Kitching, chief operating officer at Esteem Systems, says even though there is a feeling the economy is coming out of recession, there is still a great deal of caution.

"Our survey showed businesses are understandably being cautious with investing in recruitment, despite the fact that we're coming out of recession. However, 95% of the businesses we questioned believe it's vitally important to continue to invest in IT solutions, with 61% identifying managed services as a preferred approach," he says.

"Businesses are clearly putting IT at the heart of their plan for recovery, and managed systems are increasingly being seen as the best vehicle to deliver that recovery in IT. This is because the current climate may still be too unstable to commit to recruiting more staff," he adds.

The REC figures showed a demand for managed services expertise in temporary positions and firms were looking to consultants and third parties to provide those skills.

A clear trend is emerging, particularly in the mid-market, for managed services to fill a gap. This is set to continue to grow as most of the analysts agree that over the next few years, outsourcing and cloud will take larger chunks of the market.

Resellers looking for growth opportunities are starting to get some of the clearest indications yet that managed services, outsourcing and consultancy are all in demand. ‚óŹ

This was first published in June 2010

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