| Early sales figures for January point to a strong IT sales and services rebound in 2010.
OnForce, an online marketplace based in Lexington, Mass. made up of more than 13,000 service technicians, said it has seen a 14 percent increase in work order volume in January compared with the year-ago period.
The upbeat OnForce forecast is in line with reports from a number of solution providers and other recent sales forecasts and economic data.
The National Association for Business Economics (NABE) Monday, for example, said that the services industry experienced a growth in unit demand in its most recent survey conducted Dec. 18 to Jan. 7. And Forrester Research, a Cambridge, Mass., consulting firm, is forecasting in 2010 a 6.8 percent increase in IT consulting/systems integration and a 7.1 percent increase in IT outsourcing sales compared with 2009.
"We are starting to see pent-up demand result in more [IT] projects getting green-lighted," said OnForce CEO Peter Cannone. "These are projects that absolutely have to get done like a Point of Sale [POS] refresh. The [IT] project market is coming back. We see slow and steady growth for 2010."
The rebound in IT project sales is in stark contrast to 2009, said Cannone. "Project work in 2009 was nearly nonexistent," he said. "There were a lot of companies that were due for a network or hardware refresh that held off because it was such a rough year. The IT downturn was deep and hard-hitting in 2009 and it prevented a lot of businesses from doing any kind of technology refresh. That pent-up demand is coming into play in 2010."
Cannone expects IT services through the OnForce platform to soar to more than $200 million in 2010, up from $150 million in 2009.
Luigi Giovanetti, co-owner of CPU Sales & Service, a highly regarded Woburn, Mass., IT solution provider, said 2010 is off to a great start. "The orders have been coming through left and right," he said. "We probably did 40 percent of our monthly number in the first week of January. Things are turning around."
"I see a great 2010," added Giovanetti. "People were overworked and underpaid in 2009. It's time to get things in place and replace aging IT equipment so people can work better, faster, smarter and more efficiently."
Cannone said the market is favoring solution providers that are full-service organizations in the year ahead. "If you are going to survive in this new decade you need software, services and remote services capabilities," he said. "You are going to have to do it all to survive in this new decade. The big challenge for VARs is running a services business."
Cannone said IT services companies saw service utilization rates plummet 20 percent to 25 percent in 2009 because of a sharp drop in IT project sales work. He said the IT services utilization rate was at about 50 percent in 2009.
Cannone said that he sees service providers today carefully managing their service utilization rates by augmenting their staffs through the use of the OnForce platform. "A lot of companies laid off technicians because of the dramatic drop in IT project business," he said.
While 2009 was a year of cost cutting, Cannone predicted a focus on revenue generation for 2010. He sees companies embracing a new wave of technology like mobile devices that can make their sales staff more productive. "There are some very positive signs," he said. "The leading indicators look good for 2010. It's going to be a much better year than 2009."
-via ChannelWeb
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