Remote Managed Services Offer EMEA SMBs a Cost Effective Means to Manage ICT in a Tough Economy.

Spending on Remote Managed ICT Services by EMEA SMBs Expected to Triple by 2013, says AMI

LONDON -- Remote managed ICT services have emerged as a bright spot in this tough economy as EMEA small and medium businesses (SMBs, companies with 999 employees or less) struggle to manage their growing ICT needs while keeping costs low. Annual spending on remote managed IT services by EMEA SMBs is expected to triple in the next five years, representing a compounded annual growth rate of 24%, according to a new report just published by AMI-Partners.

"Though EMEA SMBs have been increasing their use and dependence on ICT, the majority of them operate with very limited financial & internal IT resources," according to Hugh Gibbs, EMEA VP of Research and Consulting at AMI. "Difficult economic conditions over the last 12 months in all European markets have exacerbated a trend that has been gaining strength over the last few years. The managed services proposition which outsources management of ICT assets to a 3rd party (and offers proactive and guaranteed service levels for a fixed monthly outlay) is now resonating with large numbers of SMBs in EMEA."

While EMEA SMBs have been using managed services in select areas for some time (e.g. managed web hosting), they are now broadening their managed services usage to cover other types of ICT assets including PCs, servers, storage, security, applications, communications and networking.

As a result, the managed services industry is undergoing rapid change. Local channel partners, who provide most of the external ICT support to EMEA SMBs, have been transforming their business models to include remote services, which allow them to serve more customers with fewer resources.

"Channel partners who have transitioned to the remote service model have higher revenues per employee and are also growing faster than those who have not made the change," says Melissa Chong, Senior Analyst at AMI and chief architect of the study. Chong adds that using remote management software allows service providers to deliver better service by monitoring their customers' ICT assets on a 24/7 basis.

Many of the partners have been enabled in their transition by the availability of remote management software being available to them via the SaaS model, reducing the barriers to entry. These lower barriers have also led to the creation of a new breed of startups: the pure-play managed service providers (MSPs) whose business model is primarily delivering remote management services.

In addition, several new types of providers have been entering the market--ranging from traditional incumbent telecom service providers, IT vendors and distributors to retailers and online resellers. "The growth of the managed services industry will dramatically change how EMEA SMBs spend their [euro]49 billion on all types of IT services; every provider would like a greater piece of that pie," said Gibbs.

While some of these new providers are serving SMBs directly, others are enabling their local channel partners to deliver managed services, capitalizing on the strong relationship already existing between the channel partners and their EMEA SMB customers.

Related Studies

AMI's just published "The Emerging SMB Managed Services Market Opportunity & Ecosystem in EMEA" provides a comprehensive overview of the rapidly evolving remote managed services market in EMEA from both demand-side and supply-side perspectives. The study focuses on remote managed IT services that are delivered based on a recurring fee model (rather than break-fix), and will help business planners and marketers understand the key dynamics of this fast-growing, but still highly fragmented market in Europe. It explores the key patterns and drivers of end user adoption, and discusses the different models services providers are using to support them. It also outlines the growing ecosystem of service providers that is now emerging in the main country markets and presents detailed market sizing and forecast for nine types of managed services in leading countries and EMEA. This research draws on AMI-Partners' comprehensive quarterly and annual surveys of small (1-99 employees) and medium (100-99 employees) businesses and channel partners as well as detailed discussions held with over 30 managed service providers and key enabling vendors involved in this market.

For more information about this study, AMI-Partners, or our global SMB research, call 212-944-5100, e-mail ask_ami@ami-partners.com or visit the AMI Web site at www.ami-partners.com.

About Access Markets International (AMI) Partners, Inc.

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence -- with a strong focus on global small and medium businesses (SMBs), and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and "go-to-market" solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 25 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.