MSP Model Gains Market Acceptance as Continued Growth Is Forecast, According to IDC

FRAMINGHAM, MA – NOVEMBER 7, 2001 – The management service provider (MSP) emerged in 2000 as an evolving business model that has now gained acceptance and recognition. IDC believes the MSP model provides an important alternative to traditional software tools licensing that can bring benefits to the IT center, the software vendor, and the service provider.

 

According to IDC, the management service provider market grew to $172 million in 2000, which surpassed earlier estimates, and is expected to reach $1.1 billion by 2005. Approximately 40 MSPs were recognized in July 2000 through an initial market sizing and identification. Six months later, more than 80 corresponded to IDC’s definition.

IDC defines a management service provider as a company that delivers subscription-based IT infrastructure management functions as a bundle of management tools and services, typically accessed over a network. Customers such as corporate IT centers use the management service provider to help manage their own infrastructure in conjunction with in-house staff.

Revenue growth for this market is attributed to the increase in ebusiness-related and enterprise Web sites, and the development of successful MSP operations by several vendors. Although the development of the MSP business form, associated market acceptance, and revenue growth for MSP subscriptions are still in the early stages, the MSP market is dynamic, growing, and will undergo significant changes in the future.

"eBusiness growth is prompting greater direct contact between end-users and Web-based applications," said Tim Grieser, research director for IDC’s Management Service Providers service. "The ‘end-user experience’ in terms of performance and availability has become a critical success factor for ebusiness. This offers opportunities for vendors to provide software products and MSP services to monitor and manage performance and availability."

IDC’s recently published research Worldwide System Management MSP Market Forecast and Analysis, 2001-2005 (IDC #25389) addresses the worldwide market size of MSP subscription-based revenue in 2000 and forecasts market growth for the next five years. IDC has also recently published a forecast and analysis report for MSPs titled Performance and Availability Management MSP Market Forecast and Analysis, 2001-2005 (IDC #25240). This research addresses performance and availability management functions.

To purchase these documents, please contact Cheryl Toffel at 1-800-343-4952 extension 4389 or ctoffel@idc.com.