The Economies Impact on the IT Services Industry
Posted by Matt Carroll on Thu, Apr 16, 2009 @ 10:17 AM
While the failing U.S economy is certainly creating worries for most; for some the tanking market is creating growth opportunities. Many companies view IT related tasks as the most expendable within the firm. Technology maintenance and security positions are difficult to measure. They don't contribute directly to a firm's bottom line. During our current economic crisis, companies IT staffs may be among the first to be cut. The major reason: these positions can easily be outsourced to IT service providers for a fraction of the cost.
Typically, hiring IT Service providers has been reserved for small-medium sized businesses. When companies reach a considerable size they tend to invest in an internal IT staff. Large firms are comfortable keeping company data in-house and having technology solutions tailored specifically for their business. However, with the economy failing this is becoming a less feasible option. Some large companies, like General Motors, outsource IT service because it is far more cost effective.
So why are third party IT service providers a more feasible solution? IT service providers typically charge a low monthly fee for their services. They take care of everything an IT staff would handle; ranging from data back up, application/web hosting, internet connectivity, etc. In addition to this, IT service providers are constantly making necessary upgrades to hardware and technology void of pricey additional charges.
If your business decides to have your own IT department, expect a significantly greater investment. IT professional's salaries (approx. $85,000 per qualified personnel), servers and other necessary hardware are a major expense. In addition to this, technology and hardware needs to be upgraded or replaced every few years. Also, if your IT personnel encounter major issues, they may have to branch out and outsource from IT service providers.
While the economy is certainly creating instability, businesses have numerous options for their technology needs. Large firms may decrease internal IT operations through personnel downsizing or minimizing network hardware. Or, they may outsource their IT needs to a third party service provider. The IT services industry has a vast amount of providers capable of fulfilling businesses technology issues.