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IT and Support Services: SMBs Prefer Trusted Providers or One-Stop-Shop

by Patrice Samuels | Aug. 15, 2016

When small businesses (SMBs) choose an IT and support service provider, the two most important considerations are the provider’s ability to include all of the company’s devices and provide a comprehensive IT service plan. Over one-half of small businesses that use professional IT services use two or more services. However, small businesses may have to rely on multiple vendors to address their IT needs, resulting in a highly fragmented IT and support services market.

Broadband service providers have been successful in providing services across multiple categories. They have achieved at least 13% market share across various IT services, a testament to the increased focus of many broadband providers to bundle IT services with broadband for small businesses. Local IT companies are also strong players across service categories. The preference among small businesses for familiar providers and service bundles gives strong competitive advantage to incumbent IT service providers. Broadband providers have an advantage over other vendor options as a result of their existing relationship with SMB clients; over 50% of SMBs in most industries subscribe to broadband services.

As telcos and cablecos that provide broadband services to small businesses assess opportunities to generate additional revenue, services that leverage the operator’s strengths in network and in data-oriented services are a natural addition. Over the past few years, most of the larger providers in the U.S. have embarked on designing IT and support service packages that appeal to SMBs.

The scope of service offerings differs among broadband providers; however, most providers offer some or all the following services:

  • Website development and hosting
  • Local ad listings updates
  • Wi-Fi hotspots
  • Document sharing and collaboration solutions
  • Cloud storage and back-up
  • Network security
  • Premium technical support
  • Online payment processing

Service providers also market these offerings under several strategic objectives that are relevant to small businesses, including:

  • Fueling growth (or efficient growth)
  • Protecting or safeguarding the business
  • Simplifying IT
  • Connecting with consumers
  • Transforming work process

Promoting outcomes or business objectives allows service providers to appeal to small business decision-makers that may have limited technical knowledge upon which to base a purchase decision. At the same time, such broad messages provide little differentiation from other vendors. This may prove problematic in a highly fragmented market.

In addition to listing the actual products and services on their websites, service providers may also provide a number of other resources for small businesses:

  • Extensive information on why the various services offered are relevant to small businesses
  • Case studies showing the effectiveness of solutions offered
  • Links to partners that can help potential customers with strategic direction and support
  • Programs that give small businesses access to other non-IT products and services at discounted rates, including shipping, office supplies, printing or financial services

The market for providing IT and support services to SMBs is huge for broadband providers and others that provide bundled services specific to individual company’s needs. Total revenues for IT and support services for U.S. small businesses, including cloud storage, server management, cloud-based productivity applications, network security, technical support and cloud-based enterprise applications revenues, are estimated to increase from $8.4 billion in 2015 to approximately $10.1 billion in 2019.

This article originally appeared in ECT News.

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Patrice Samuels

Patrice Samuels

Senior Analyst

INDUSTRY EXPERTISE: Smart home products and services, technical support services, consumer experience

Patrice covers smart home products and services and leads Parks Associates Smart Home Tracker product, keeping clients informed of industry developments and competitive shifts across more than 10 smart home product markets. She also leads digital home technical support services with a focus on market trends, business models, and provider strategies. Patrice manages custom research projects and strategy workshops that help companies understand the consumer experience in the connected home.

Patrice earned her MBA from Texas A&M University at College Station and BSc in Psychology from the University of the West Indies.

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