MSPA Releases META Group Research Results to Its Membership; Continuing Adoption of Managed Service Provider -MSP- Model Validated

Business Wire, June 24, 2002

Business/Technology Editors

CONCORD, Mass.--(BUSINESS WIRE)--June 24, 2002

The MSP Association today announced to its membership several key findings of a META Group (Nasdaq: METG) multiclient research study on the MSP market. The study, titled Managed Services: Optimizing Core Competencies, was conducted to provide information about the current state of the Management Service Provider (MSP) market, who is involved in the decision-making process for managed/management services, and what is important in making vendor selection decisions.

According to Corey Ferengul, Vice President with META Group's Service Management Strategies service and one of the authors of the study, "The MSP market is beginning to mature, with users understanding it as a form of selective outsourcing and a business model, as opposed to a vendor description. However, we see the business moving more toward larger vendors, with partners assisting in the delivery of services."

Other key findings include:

-- Primary drivers for companies considering selective IT outsourcing include lack of internal resources, desire to focus on core competencies, lack of internal skills, and cost reduction.

-- Companies looking to outsource select IT functions are looking to the Managed Services Provider (MSP) model for viable and strong alternatives to buying and implementing management tools on their own.

-- Enterprises are outsourcing select IT functions and will continue to do so for new applications and web-based applications rather than for existing applications where there has been a significant previous investment.

-- The areas within managed/management services most likely to be outsourced in the next year include managed hosting, VPN management, desktop management, network management, Web site monitoring/reporting, Intrusion detection monitoring/management, and Help desk/Problem management.

-- Customers want custom SLAs. They expect technology-related SLAs but want vendors to commit to service levels around the customer service they are delivering, not just around the technologies they are managing.

"This study validates the increasing awareness and growing adoption of the MSP model as a valid outsourcing business model," said Ray Kindiak of Nuvo Network Management, Chairperson for the MSP Association's Research Committee. "The MSP Association sponsored this study to intimately learn the customers' perspectives of selective outsourcing. We are now seeing greater traction in the adoption of this second generation model of outsourcing in spite of other IT market contractions," added Mr. Kindiak.

For more information about Managed Services: Optimizing Core Competencies as well as other META Group multiclient studies, contact Kathleen Kenny at kathleen.kenny@metagroup.com.

About the MSP Association

Founded in June 2000, the MSP Association, Inc. is an international consortium of companies collaborating to educate and drive excellence in the Internet delivery of select IT functions. Membership is made up of managed service providers and vendors with solutions for IT management, security, storage and outsourcing services. Information on the MSP Association is available on the Web at http://www.mspassociation.org