What's The Big Deal With Managed Services?

With low entry costs, explosive market growth, and recurring revenue opportunities, experts say VARs should be adding managed services to their portfolios.

The market for managed services is strong — especially in the world of SMBs. According to IDC, the SaaS (software as a service) market is projected to reach $10.9 billion in revenue by 2009. Douglas Cottle, CEO/president of Secure Resolutions, a company that provides MSPs (managed services providers) with a suite of security and business products, says, "Customers have learned that being in a chaotic state is not productive for their businesses and are proactively moving to a ‘managed' state so that they can focus on their core businesses rather than reacting to disasters."

In a recent survey conducted by Autotask, a company that provides IT services-management software, half of the 300 VAR respondents said they currently offer some form of managed services, while the other half are strongly considering the move to managed services. "While an increasing number of VARs are making the transition into managed services, few have made the complete transformation [where most of their revenue is coming from ongoing recurring services]," says Bob Godgart, CEO of Autotask.