Boom times for IT service providers

Survey of 1,300 IT service vendors confirms they are money machines, as enterprises seek help with cloud, mobile and security.

Information technology and digital transformation is the hottest demand area in business today, and enterprises are increasingly leaning on outside service providers to help make things happen.

This is the main takeaway from a survey of 1,300 IT service providers, released by Autotask, which confirms an insatiable demand for services in cloud, mobile and security development. 

Here's what enterprise are asking for the most these days:

  1. Cloud/hosted apps (also last year's leading demand category)
  2. Mobile connectivity (also last year's number two)
  3. Maintaining always-on environments (displacing last year’s No. 3 disruptor, BYOD/consumerization of IT)

IT service companies are money machines this year. In the survey, they report higher earnings and anticipate more growth over 2013. More than 95 percent are hiring and/or outsourcing. The hiring rate will jump by 46 percent over last year, and outsourcing will rise by 25 percent.

In addition, IT service companies’ billing rates are rising. Last year, 51 percent of companies said they billed an hourly rate of $100 to $150. This year, that number jumped to 62 percent.

IT service companies cited new client requests (78 percent), the need for new skills (45 percent) and geographic expansion (25 percent), along with the improved economy as the factors driving their hiring plans in 2014.

However -- just as the shoemaker's children ran around in bare feet, or doctors make the worst patients -- IT service firms don't seem to be doing a good job of automating and digitizing their own operations. The study also found that more than half of respondents are losing up to 20 hours of billable time each month on tasks that could be automated, eliminated or streamlined. These tasks include duplicate data entry, inaccurate billing, sub-optimal scheduling, on-premises hardware and software maintenance; and disparate system maintenance.

(Thumbnail photo: CERN Office of Media Relations.)