China Rising - Mid-Market Onsite and Remote Managed Services nears $3B

A recent Techaisle survey of 1,862 SMBs in China found the market for Onsite/Remote Managed Services has been growing rapidly and is near the $3B mark in the mid-market space; expected to reach $2.847 billion in 2012.

Other important points include that the 250-499 employee segment represented the largest share among company sizes, with 47.5% of the total. This is followed by the 100-249 group with ~30% and finally the 500-999 category with ~23%.

On the Services side, PC Services are the largest segment with $800 or 28% of the total, followed by Other Managed Services $509M or 18%, and Server at $485 or 17%, Seven of the top 10 service segments top $100M, providing a good set of opportunity segments.

Having lived in Korea and Hong Kong from the early 1980s through the mid-1990s and watching the Seven Tiger markets rise from bit players to important gears in the global IT supply chain, this doesn't really come as a surprise - however the rapidity and thorough break away toward private property and commercial economy that China has managed, exceeds even the early predictions and forecasts.

The overwhelming reason for using Managed Services in China across all segments was Cost Control. This was followed by the need to Focus on the Core Business which is very difficult for SMBs with limited skilled resources, even in a country like China where hiring a new FTE to support basic IT infrastructure is relatively inexpensive as compared to many other countries.

The third most important reason was to free up the IT staff so they can add other types of value to the organization; helping to move IT from a Cost to a Profit Center.

Techaisle's SMB managed services adoption and trends data and analysis is available as individual country reports for US, UK, China, India, Brazil, Germany, Australia.

Davis Blair
Techaisle