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How Technology Services Are Sold

In its analysis of findings, Reality assesses prevalence of Internet-based services, purchasing of vendor-packaged services and average selling prices for specific services.
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How Technology Services Are Sold sizes North American service provider populations by specific services sold to end-customer companies. In its analysis of findings, Reality assesses prevalence of Internet-based services, purchasing of vendor-packaged services and average selling prices for specific services. Reality also identifies leading vertical markets among end-customer businesses purchasing services and primary sources of service delivery.

Specific report objectives are to examine:
  • Sizing of North American solution provider populations by specific services sold to end customers
  • Determine among end customers the importance values of service delivery attributes such as timeliness, reputation, local relationship, cost and others
  • Assess "mission critical" services that end-customer companies receive from their IT service providers.
  • Identify leading vertical markets among end-customer companies purchasing services from IT service providers.
  • Examine purchases of packaged services by solution providers according to product segments and brands
  • Analyze annual revenue that solution providers derive specifically from services-only sales at all their locations.
KEY FINDINGS
  • Reality Research estimates that 65,500 solution provider organizations in North America (US and Canada) sell services to end-customer businesses. This estimated population of solution provider organizations comprises such business models as system integrator, VAR, consultant, Web integrator and others.
  • Among these solution providers selling services to end-customers, system configuration and installation is the leading service, sold by 91 percent, or an approximate population of 59,600 companies.
  • Solution providers use a variety of approaches to deliver services. More than half of the solution provider population delivers services to end-customers with some kind of vendor assistance (58 percent), equating to an estimated 38,000 companies


METHODOLOGY

Phone polls of 401 solution providers, 200 IT managers plus qualitative findings. The quantitative solution provider findings are based on telephone interviews with 401 solution provider organizations (value-added resellers, systems/network integrators and consultants). A stratified sample for the survey was drawn from the Reality Universe database of 93,500 solution provider organizations in North America. A sample of 5,000 businesses was drawn from CMP Media's InformationWeek circulation base. Qualitative research with solution providers was conducted via two focus groups with participants from solution provider organizations that deliver services through their own personnel and through vendor-packaged or managed services.

Table of Contents

  • Guide to Charts
  • Key Findings
  • Report Objectives
  • Methodology
  • Solution Provider Populations and General Approaches to Services
    • Populations by Service Skill Sets
  • End-Customers: Primary Sources of Service Delivery
    • Service Sources by Customer Size
    • Importance of Service Delivery Attributes
  • Annual Sales from Services among Service Providers
    • Average Selling Prices for Services
  • Vendor Assistance for Service Delivery
    • Levels of Vendor Assistance
    • Packaged Services Purchased
  • About Reality Research and Consulting
Guide to charts:
  • Figure 1. How Solution Providers Deliver Services
  • Figure 2. Solution Provider Populations/By Service Skill Sets
  • Figure 3. Primary Sources for Service At End-Customer Companies
  • Figure 4. How End-Customer Companies Evaluate Service
  • Figure 5. Top Vertical Markets Among Service End-Customer Companies
  • Figure 6. Average Selling Prices For Services
  • Figure 7. Packaged Services Purchased From Vendors


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