Sept/Oct 19 - ChannelVision Magazine

Martin Vilaboy Editor-in-Chief martin@bekabusinessmedia.com Gerald Baldino Contributing Editor gerald@bekabusinessmedia.com Percy Zamora Art Director percy@bekabusinessmedia.com Berge Kaprelian Group Publisher berge@bekabusinessmedia.com (480) 503-0770 Anthony Graffeo Publisher anthony@bekabusinessmedia.com (203) 304-8547 David Garcia Digital Marketing Manager david@bekabusinessmedia.com Beka Business Media Berge Kaprelian President and CEO Neil Ende General Counsel Corporate Headquarters 10115 E Bell Road, Suite 107 - #517 Scottsdale, Arizona 85260 Voice: 480.503.0770 Fax: 480.503.0990 Email: berge@bekabusinessmedia.com © 2019 Beka Business Media, All rights reserved. Reproduction in whole or in any form or medium without express written permission of Beka Business Media is prohibited. ChannelVision and the ChannelVision logo are trademarks of Beka Business Media Outsourcing is bouncing back, suggests research by analysts at Computer Econom- ics. After a temporary drop last year, the average percentage of the total IT budget that organizations are spending on outsourcing is at a five-year high. This news of outsourcing’s increase is somewhat paradoxical, said CE. Outsourcing generally goes down in good economic conditions and up in poor ones. However, the economy has shown steady growth throughout the survey period. “And our data shows that companies are increasing IT operational budgets at the highest rate they have in recent years.” So it’s unlikely the economy is a primary reason for the increase. Outsourcing as a Percentage of Total IT Budget 2015 2016 2017 2018 2019 10.2% 10.6% 11.9% 9.4% 12.7% Source: Computer Economics, 2019 Overall, the percentage of the total IT budget being spent on outsourcing increased from 9.4 percent in 2018 to 12.7 percent in 2019. Not only is this a healthy increase, but it continues a five-year trend toward increased outsourcing (2018 is seen as an outlier). Network operations, IT security, help-desk support and disaster recovery are among the greatest gainers, show CE findings. Small businesses, in particular, “are really driving this increase,” said David Wagner, vice president of research for Computer Economics. That’s good news for a partner community that emphasizes the SMB space. Better yet, a potential reason for this jump in outsourcing, “is that companies are simply more comfortable with handing over more of their work to service providers,” said CE researchers. “The cloud transformation has been well under way for the past few years. More companies are adopting SaaS and increasing their use of the public cloud. While not all of this fits under our definition of outsourcing, these cloud services are likely making companies more comfortable with putting their fate, not to mention their data, in a provider’s hands.” And again, small companies, which initially adopted the cloud at a faster pace than their larger brethren, could be out front on this sentiment. “The more that companies put their data in the hands of outside providers, the more they are willing to accept the risk, and the more skilled they are in identifying vendors that can perform as needed,” said the research firm. Perhaps the willingness to outsource IT functions isn’t so surprising. Small busi- ness technology needs, after all, aren’t likely to become less complex, less reliant on specialization and integration and less crucial. We also don’t see any slowdown in the number of new choices. At the same time, it’s unlikely that internal IT capabilities and IT budgets at small businesses will grow and expand commensurately. Sounds like a good time for the savvy to strike. Grab an IT Outsourcing Rebound LETTER 6 Channel Vision | September - October, 2019