Traditional Services Outpace E-Business DemandPRNewswire Despite hype over e-commerce, traditional hardware and network-related services are in greater demand than e-business services for solution providers, according to a just-released survey by Reality Research & Consulting. The services that end-customer companies want most from solution providers include hardware/software integration, application development and software support, and professional services such as consulting. The findings are based on a December 2000 survey of 315 solution provider organizations that derive more than half of their revenues from billable services. As profit margins on computer products continue to decline, growing numbers of information technology (IT) solution provider organizations are moving from a product-focused to a services-centric model. Reality Research estimates that the average solution provider organization derives 50 percent of its annual revenue from services on a billable basis or bundled with products as a total solution. "The migration to service models is critical to solution providers and IT product manufacturers that rely on the indirect sales channel to recommend, influence and integrate products into customer solutions," said Richard March, Senior Director at Reality Research, a leading market research and analysis firm. "The sale of hardware and software on Web-based sites is the latest pressure point on product margins," explained March. "Solution providers in the network integration market report that product-related margins have fallen to five percent from 30 percent eight years ago." The solution provider respondents in the survey represent executives and principals of system integrator, network integrator, value-add solution provider, software developer and consultant organizations. Reality also interviewed 200 IT and line of business managers at organizations that outsourced IT services in 2000. Reality conducted both the solution provider and IT surveys by telephone. Additional findings showed that IT respondents outsourcing services anticipate cost savings of approximately 20 percent from outsourcing services. Small businesses typically see the most savings (21 percent), compared to 17 percent for enterprise end-customer companies. Reality Research & Consulting delivers strategic and tactical market intelligence and analysis on the IT market and channels. Its client list includes major technology companies, such as Hewlett-Packard, IBM, Intel, 3Com and Microsoft. Reality is an independent business unit of CMP Media Inc. It is based in Jericho, NY, with offices located in Waltham, MA and Redwood Shores, Ca. For a complete listing and description of Reality's products and services, visit http://www.realityresearch.com/. CMP Media Inc. (http://www.cmpnet.com/) is a leading high-tech media company providing essential information and marketing services to the entire technology spectrum-the builders, sellers and users of technology worldwide. Capitalizing on its editorial strength, CMP is uniquely positioned to offer marketers comprehensive, integrated media solutions tailored to meet their individual needs. Its diverse products and services include newspapers, magazines, Internet products, research, direct marketing services, education and training, trade shows and conferences, custom publishing, testing and consulting. SOURCE: CMP Media Inc. Contact: Richard March, 516-733-733-8645, rmarch@cmp.com; or Elizabeth Website: http://www.realityresearch.com/ Company News On-Call: http://www.prnewswire.com/comp/181993.html or fax, |