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98 Percent of Managed Services Is Chaotic

The managed services market is in complete chaos, according to research conducted by N-Able, a provider of tools to enable managed services.

The managed services market is in complete chaos, according to research conducted by N-Able, a provider of tools to enable managed services.

Using a metric based on the Capability Maturity Model, N-Able has measured the capability of its partners to deliver managed services. Its findings are shocking: 98 percent of its customers initially are either in the chaos or reactive stage of maturation. Only 2 percent has progressed to the higher three levels--proactive, service and value--and are able to deliver true managed services, the company says.

"A lot of these small guys are getting into managed services, but their ability to get it is limited," says Gavin Garbutt, N-Able's president and CEO.

According to VARBusiness' 2006 State of the Market Survey conducted last fall, 44 percent of solution providers said they were offering managed services, and the average solution provider derived 23 percent of its revenue from managed services. Another 21 percent said they were considering entering the managed services market. Overall, most saw potential in the managed services market, with 56 percent anticipating healthy growth and 38 percent moderate growth.

The reality is much different. In VARBusiness' 2006 State of the Market Midyear Report, nearly one-third said managed services fell short of their expectations. Only 11 percent said that managed services exceeded expectations.

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