2008 was year of break-fix work and new network installs as both companies and consumers did more with less, buying only what they need and not what they want – except in certain areas
BOSTON, Jan. 27 /PRNewswire/ — OnForce, the world's largest marketplace for IT and CE service professionals, today released its first annual OnForce Services Marketplace Index (OSMI) Year-End Report for 2008. Based on information provided by the OSMI and the company's strong relationship with its customers and service provider network, a picture is emerging of a year filled with challenges – but also opportunities. The company also released its Top Five Predictions for 2009 based on the OSMI and industry-wide data.
"Last year we saw a significant trend towards businesses and consumers fixing what they have and tightening their belts," said Peter Cannone, CEO of OnForce. "This trend will continue across 2009. Businesses are looking to outsource more of their services in order to increase profit margins and cut costs. This is evident by the growth of both buyers and service work orders placed through our marketplace in 2008."
"For 2009, diagnosis and repair services will become a major focus as businesses are likely to continue delaying new equipment purchases. We also anticipate businesses that do purchase new technology will move towards less expensive brands or unbranded alternatives," said Cannone.
"We also expect that end-users will pressure vendors to cut prices even further. Overall, the most significant trend in 2009 will be the continued use of outsourcing, as corporate IT departments are asked to do more with less. It isn't going to be easy, but there are opportunities for growth and success even in a down economy."
Compiled from more than 300,000 service orders completed across the OnForce Marketplace in 2008, the OSMI is a research tool that highlights market trends and growth opportunities for VARs and solution providers in the onsite services industry. Over the course of 2008, several trends were seen – for example, the move to repair rather than replace – which OnForce expects will continue into 2009.
The OSMI data from 2008 revealed a number of additional key findings:
- 2008 saw a sharp increase in the "break-fix" – or repair – sector. Up to 65% of all work orders were break-fix across all service sectors, PC desktop, printer, network POS, server, TV/Video, PC Laptop, VoIP, wiring & cabling, home theater.
- Desktop computers, TV/Video and Point-of-Sale (POS) systems were the highest volume onsite service categories in 2008, and accounted for over 50% of all work orders in 2008.
- Consumer Electronics accounted for four of the top five most expensive onsite services in 2008 (with the average cost per service of ~$250).
- Over the course of the Q4 holiday season, desktop computers ranked as the highest volume category for onsite service (over 22% of all Q4 work orders) with TV/Video coming in a close second (with over 21% of all Q4 work orders).
"There are really five key trends that we expect to see in 2009," said Cannone. "With the economic clouds still looming we see that most businesses and consumers remain in cost savings and belt tightening mode. They desire to fix rather than buy, they recognize that cheap can be chic, they will increasingly rely on outsourcing for corporate IT, and they will seek lower prices and have difficulty predicting demand. These are the challenges of the coming year and businesses need to recognize them in order to thrive in a challenging economy."
Cannone gave his Top 5 Predictions for the coming year based on what he saw as major industry-wide trends and within the OnForce marketplace:
Fix not Buy
"With the economic storm still gathering, one thing we've seen in the OSMI and heard from our customers and pros is fix it first and then buy only what you need," he explained, "Consumers and businesses will continue to delay purchases of new equipment and opt for break-fix services for the foreseeable future."
Cheap Become Chic
"Businesses and consumers are also seeking new ways to tighten their belts. We're seeing a shift to purchases of lower-cost equipment; PC vs. Apple, non-branded PC vs. branded; netbook vs. notebook, etc."
Outsourcing and Corporate IT
"Based on what we're seeing in the market, we predict an accelerating shift to outsourcing by many corporate IT functions," continued Cannone, "and service providers using the OnForce platform may see an increase in this type of work."
Customers Become the Price King
"Decreasing demand will put customers in the driver's seat when it comes to pricing for service and equipment. If the past is a guide, VARs that are looking to reduce costs throughout the installation and aftermarket service supply chain will result in greater opportunities for OnForce technicians."
The Future is a Foggy Place
"With everything that is happening – the continuing economic slowdown and general unpredictability of the market – it is difficult to gauge demand for in-house service techs. In 2009," concluded Cannone, "this uncertainty will lead to more service providers turning to OnForce to supplement their labor force."
The OSMI 2008 Year End Report and Q4 report is available for download at:
OnForce is the leading marketplace for information technology (IT) and consumer electronics (CE) service professionals. The company enables VARs and solution providers to find skilled professionals in virtually every zip code in the US and Canada. Since its inception, the OnForce marketplace has been used to successfully complete nearly 1 million work orders. The OnForce community is made up of 5,000+ IT and CE service buyers and 13,000 service professionals who work in a number of technology categories, including computers, printers, networking, VoIP, point of sale and consumer electronics. For more information, visit www.onforce.com.