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How Big Is The Market For Managed IT?

Growing demand for the services of TeamLogic IT Franchises

Back in 2013, the industry expected worldwide IT spending to hit $2.1 trillion in 2014, according to an International Data Corp. report. That number is a distant memory. In December 2015, First Research reported that global IT spending had climbed to $3.7 trillion. In the U.S. alone, national spending on IT has risen to $340 billion annually.

The managed IT services (MSPs) industry has blossomed from a niche segment of the overall IT industry into the force that is driving the industry into the future. The growing demand for managed IT services was recently documented in CompTIA’s Fourth Annual Trends in Managed Services Study, which surveyed 350 business owners on their use of these services. According to MSPmentor, “more than two-thirds of companies surveyed said they have utilized outside IT services within the past 12 months, signaling a steady uptick in the use of managed services among organizations.”

MSPmentor reports that the surge of managed IT services in business is the direct result of the value these services and the range of solutions these services bring to small businesses and to large companies that employ an internal IT staff or department.

“And while the growth of managed services often allows companies to free up their IT departments for other functions, they continue to seek bigger payoffs from their partnerships with MSPs, such as becoming more competitive or ramping up their efficiency, according to the study,” MSPmentor reports. “This, in turn, is opening the door for MSPs to grab new business opportunities, especially those concerning the factors that drive end users’ decisions to use managed services, such as operational efficiency, enhancing security and being more proactive in IT maintenance.”

TeamLogic IT faces little competition in the managed IT services segment

Despite the boom in the IT industry, the industry remains very fragmented. According to CompTIA, there are about 118,000 independent computer repair IT companies in the United States, and only about 12,000 managed IT service providers. The vast majority of these companies are independent IT providers who serve small companies that employ between one and 10 people. While there are a handful of brands that serve large companies who employ upwards of 500 people, TeamLogic franchise owners are best suited to serve clients who are in the middle of large and small, employing 10-100 people on average.

TeamLogic IT was created to become the go-to IT team for small and medium-sized businesses. We offer fast responses to IT challenges; but more importantly, we act as an IT advisor to our customers, monitoring their vital IT systems to prevent problems and eliminate downtime. We also analyze their businesses to recommend specific technology solutions that can help them grow. We’re not just the folks business owners call when something breaks; we are business partners who provide guidance and access to new technologies that can help make our clients more efficient, more profitable and more secure.

“Our sweet spot, and where we do well, is in working with the companies that have outgrown their local IT service provider but are still too small to work with an enterprise company,” says Chuck. “In reality, virtually every small business in the U.S. needs us. Business owners have never been more sensitive to their dependence on IT. IT drives productivity and, ultimately, profitability. We tend to talk very little about technology with our clients and a lot about business. What happens when their technology fails? How much will business be affected? We help our clients leverage technology to run their businesses better and more profitably. This is a services business, and customer service is king.”

TeamLogic IT is winning a significant share of the managed IT services segment

Davis Merrey, TeamLogic IT’s Franchisee of the Year in 2013, says the size of the opportunity was one of the primary factors that attracted him to this business in 2007.

“It was a need that would go on forever,” he says. “And I enjoy helping people succeed. … The thing that impressed me most was, as I walked into the Franchise Services building, there was a sign that said ‘Our mission statement.’ Having been in the corporate world a long time, I expected the typical corporate mission statement — ‘to enhance the wealth of stockholders’ or ‘to serve customers’ — and what I saw was ‘to make our employees and franchisees successful.’ I thought, ‘Whoa. Corporate America could learn a lot from that.’”

To grow the business and provide the best value to customers, a TeamLogic IT owner should act as a consultant to their clients. It’s not just about configuring servers and selling cloud services; it’s about understanding clients’ needs and how technology struggles might be holding them back, then removing hurdles so they can grow their business.

How big is the opportunity? Every small and medium-sized business with technology needs it to be reliable, and we make it possible for them to have reliable, secure, accessible tools for their businesses.

Without reliable systems, doctors’ offices can’t function. Dental practices grind to a halt. Law offices can’t serve or bill their clients. Manufacturing facilities can’t run their lines at full capacity. Accounting firms are hobbled. Advertising agencies cannot manage their workflow to serve their clients. Downtime means lost revenue. CA Technologies commissioned a survey in 2011 of 200 companies across North America and Europe, which found that $26.5 billion a year in revenue is lost to IT downtime.

 

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