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IT HIRING: Highly Skilled Workers in Demand

Posted on 10.21.2013

Engineers, IT professionals and other highly skilled workers should feel good about their positions in the global workforce. With more companies adopting managed service provider (MSP) services, like hosting, network management and other IT services, these highly skilled workers are a hot commodity. 

In fact, Everest Group recently published a report, Managed Service Provider (MSP) – Mastering the Winds of Change, which focuses on shifting dynamics in the MSP market and identifies buyer adoption patterns and solution characteristics. 

The report indicates that engineers and IT professionals now constitute the largest job family managed by MSPs. The managed spend in the MSP market grew by 13-16 percent in 2012 to reach US $60-65 billion. The current market size, in terms of net fee income (NFI), is approximately US $1.05 billion. 

“Fundamental changes in the MSP market have the potential for causing dramatic competitive shifts,” said Rajesh Ranjan, vice president at Everest Group who led the report team. “Buyers are rapidly embracing new models, with the goal of unlocking new value from MSP. Service providers are grappling with how to add new capabilities and geographic footprint, placing bets on which segments of the market will emerge most quickly to align with their core competencies.”

Shifting market dynamics outlined in the report include: 

  • Increased “talent” scope of MSP: The MSP market has evolved to include varying job families and different types of workers such as Statement of Work (SoW) workers, independent contractors, and even permanent hires, within its scope.
     
  • Evolution in delivery model: With increasing maturity, MSPs have started to gain cost benefits through centralization of some MSP processes that were earlier delivered on-site. A few MSPs have started to use nearshoring/offshoring.
     
  • Entry of new MSP providers: In addition to the traditional MSPs, a number of new players from a variety of backgrounds have entered the MSP market.
     
  • Advent of advanced pricing models: MSP pricing models are evolving beyond the usual “percentage of managed spend” to include outcome-based / gain-sharing models.
     
  • Globalization of MSP: Large global MSP contracts spread across continents are emerging, though they are still small in number. However, only a handful of the largest MSP players with wide global footprint have the capability to play here.

 

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