[October 17, 2012]

Western European SMBs to Spend $63B on IT Services by 2016

Western Europe's 12 million plus small and medium businesses (1 to 999 employees) currently spend one fifth of their total ICT budgets on IT support services. Remote managed services are taking a growing slice of the pie and enlarging its value overall, as established by AMI's newly published study, 2012 Western Europe Small & Medium Business Managed Services Overview.

The impact of the cloud in SMB markets is having its effect on service provision as well as traditional ICT infrastructure. Improved Internet connectivity, business management familiarity and comfort levels with cloud service concepts, tied with the effects of the economic slow-down in Europe, have heightened the appeal of remote managed ICT services (RMITS). The spread of Internet trading and e-commerce, as well as the criticality of 24-hour availability of web sites for customers, are also spurring the need for out-of-hours support that cannot be cost effectively covered by in-house IT staff. The combination of these factors is contributing to the 12% anticipated growth in RMITS spending in Western European countries through to 2016.

"ICT support services have traditionally been the preserve of the local channel partner as Western Europe SMBs want their support providers to be close at hand and knowledgeable about their companies," comments Hugh Gibbs, VP Research for EMEA, and the study's author. "The increasing availability of remote monitoring and management tools and hosted datacenter facilities have lowered the barriers to entry to service provision for a large number of traditional VARs and resellers, and simultaneously encouraged the emergence of a new generation of start-up-'pure play' managed service providers (MSPs)," said Gibbs.

"Wit the economic climate as it is, many Western Europe SMBs have subjected their ICT spend to very close scrutiny and have put the squeeze on support service contracts in particular," continues Gibbs. In this environment service providers and channel partners have had to make more efficient use of their skilled technical support resources and to service a larger number of customers. RMITS tools (often paid for on a customer-use basis) have enabled them to do this. Remote managed services have also allowed them to penetrate the larger numbers of small businesses with more competitively priced RMITS options. RMITS tools also allow service providers to deliver a more proactive and differentiated service to their customers.

"While the lion's share of Western European MB service spend remains with traditional channel partners and smaller MSP 'pure-plays,' RMITS is bringing other players into the game. Telcos/hosters and retail are also delivering managed services to the volume small business space. Distributors and IT vendors are developing managed services options for their reseller partners to offer to their customer bases."

Related Study

AMI's 2012 Western Europe Small & Medium Business Managed Services Overview will provide answers to the following questions:

• What is the total market opportunity for ICT services among SMBs in Europe (by country and by segment)
• What proportion is migrating to remote, cloud-based delivery
• What services are SMBs adopting and what are the key drivers
• How does service bundling impact the purchase likelihood, and increase revenue potential
• How do SMBs handle ICT management and what are the implications for service providers
• Who are the players in the SMB managed services ecosystem and from whom do SMBs make RMITS purchases

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 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), 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 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.

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