MSPs Better-Positioned to Cope With Economic Uncertainty

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Oakbrook Terrace, Ill. — May 19
Companies delivering technology solutions through a managed services model have weathered the economic recession better than companies focused on more traditional product and support sales, new research from CompTIA reveals.

Though profits from both groups have been negatively affected by the economy in the past year, managed services providers have been better able to generate cash flow, avoid wild quarter-to-quarter fluctuations in income and generally outperformed traditional technology resellers. The top managed services providers surveyed tended to hold their profits longer even as the economy headed down, and began their recovery sooner, the survey reveals.

“Managed services represent the best opportunity in some years for technology solution providers to create significant shareholder value,” said Todd Thibodeaux, president and chief executive officer at CompTIA.

Results of the inaugural CompTIA MSP “Best in Class” Benchmark Report were presented today at a meeting of the CompTIA Managed IT Services Executive Forum. The group, which has more than 50 members, was created earlier this year to help drive the success of the managed IT services market through networking opportunities, education and accreditation.

The benchmark survey of 158 technology providers in North America was conducted during February and early March and examined financial performance for a 15-month period, from Q1 2008 through Q1 2009.

One factor examined in the survey was earnings before interest, taxes, depreciation and amortization (EBITDA), an adjusted net-income figure that is a reasonable proxy for a company’s ability to generate cash flow. The survey found that the median managed services company had higher EBITDA in Q1 2009 (5.3 percent), even after four quarters of economic pressure, than did the median traditional technology solution provider in Q1 2008 (5.1 percent).

The complete CompTIA MSP “Best in Class” Benchmark Report is available to CompTIA members.

The CompTIA Managed IT Services Executive Forum is currently engaged in three initiatives:

  • Addressing the key educational needs that will lead to differentiation (and potentially accreditation) for managed services providers.
  • Addressing business issues, education and best practices specific to the area of managed printing services.
  • Creating a vendor-neutral, business-level accreditation process to identify solution providers that follow industry accepted best practices for managed IT services.
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