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Resellers Optimistic About the Economy, According to MX Logic Survey
Posted: Tue Apr 21, 2009 03:37:00 PM
Despite Reports of IT Spending Declines, Most Resellers Expect Sales to Remain Unchanged or Increase in 2009

Englewood, Colo. April 21, 2009 The economic glass is half full for most resellers, according to a survey conducted in March by MX Logic, the world's largest independent provider of managed email and web security solutions. While 56 percent of resellers surveyed said they had seen sales decline in the past few months, 87 percent expected their year-over-year sales to remain unchanged or increase in 2009. Moreover, 90 percent of resellers surveyed expect the overall economy to pick up by 2010.

The survey of more than 200 Value Added Resellers (VARs), Managed Service Providers (MSPs), IT Consultants and System Integrators also showed a shift of sales toward managed or SaaS-based services and away from traditional hardware and software solutions as businesses try to control or reduce IT costs. Forty-four percent of resellers said "managed services" was the most profitable segment of their business, followed by consulting (15 percent) and service contracts (15 percent). Conversely, 57 percent of resellers said that hardware and software sales had been negatively impacted by the slowdown.

"These survey results validate what weve been saying for a while now, which is that businesses large and small are shifting rapidly toward managed security services to help better control or even cut costs on critical but routine IT tasks such as email and web filtering, or archiving," said Pete Khanna, president and COO of MX Logic. "The current economy has certainly put that shift into hyper drive, which presents an exciting opportunity for our resellers."

Earlier this year, Forrester Research reported that while overall IT spending would decrease in 2009, businesses would allocate more of their IT spending on security. Resellers agree. Nearly 70 percent of resellers reported that their customers had downsized their IT departments in the last six months. However, 66 percent said their clients' investments in security solutions have remained the same or increased this year.

Resellers are also pushing extra hard to market themselves, according to the survey. Sixty-two percent said they had increased marketing and sales initiatives, whereas 14 percent were offering more bundles and 8 percent were lowering prices.

Other notable findings:

Forty-eight percent of resellers said they lead with managed services on new sales calls, followed by consulting (34 percent), hardware (12 percent), and software (6 percent).
Sixty-five percent of resellers said they sell a managed service as part of a bundle or integrated package versus a stand-alone solution.
Fourteen percent of resellers expect overall sales to decrease in 2009.
Only eight percent of resellers reported growth in hardware and software sales.
Twenty-three percent of resellers noted an increased interest in managed services since the economic downturn.
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