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IT service providers are growing and most are in hiring mode, with the expanding scope of endpoint management the key business driver.
Those are some of the main takeaways from Autotask Corp.'s IT Service Provider Benchmarking Survey, the results of which were released today. The survey was conducted by research firm Decision Tree Labs, and polled more than 1,100 service providers worldwide. Autotask publishes periodic service provider surveys and reports. The company provides remote monitoring and management, professional services automation, and file sync-and-share products.
Autotask found that 55% of the IT service providers surveyed cited "a steady or significant increase" in the number of endpoints under management. The survey also noted endpoints as the top security concern for clients, meaning that service providers have an opportunity to both manage and protect customers' endpoints. The cloud, meanwhile, has become an increasingly important tool for IT service providers. According to the survey, 80% of the respondents said they depend on cloud delivery to manage and secure endpoints.
As a result of these broad trends, service providers continue to grow the top line: Autotask reported that most companies projected growth rates in the 5% to 15% range.
"We know the size of our market is growing," said Patrick Burns, vice president of product management at Autotask, noting that cloud services and IT services spend is increasing.
Burns said he sees significant growth in Autotask sales in its customer base with regard to new seat provisioning.
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Service providers are onboarding new personnel amid steady demand for endpoint management and other managed services. According to Autotask's survey, 80% of IT service providers are now hiring.
"That is a general sign of health in the industry," Burns said of the hiring trend.
As for key areas of hiring, survey respondents identified service desk (65%), sales (32%) and projects (23%).
Service providers confirm that hiring is underway.
Michael Corey, president of Ntirety, a database services company in Dedham, Mass., and a division of cloud company Hosting Inc., said his company is always growing its service desk operation. Across the industry, in general, service desk personnel are the lowest cost resource in a service provider, so that area tends to see considerable hiring activity as companies grow, he noted.
A boost in service desk hiring "can only mean that they are adding customers," he said of IT service providers.
IT service providers watch different signals as they manage growth, but the Autotask survey zeroed in on a handful of key measures. At the executive management level, the chief concerns are overall profits, profitability by customer and billable resource utilization, according to Autotask.
Tinnirello said he cares about the third factor, billable resource utilization, but would rank profitability by line of business ahead of that metric.
Corey said he watches gross margin, noting that overall profitability is the result of many factors, including the number of people he hires. Gross margin, he said, allows for apples-to-apples comparisons.
"I know what a normal gross margin is in my business, and I am always tracking against that," he said.
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