If it's Broken, Do Fix It By Peter Cannone, CEO, OnForce
We can all agree that the poor economy is a fundamental game-changer in how customers and consumers are choosing to spend their IT dollars these days and, in turn, VARs are struggling to respond to these shifts in order to stay profitable.
Since OnForce connects both IT and consumer electronics (CE) service demand with local service supply technicians, we have therefore created a measurement tool to help VARs gain insight into trends across the various IT and CE service sectors. The OnForce Services Marketplace Index (OSMI) Year-End Report for 2008, a comprehensive analysis of more than 300,000 service events this year across North America, demonstrated that in 2008 "break-fix" -- or repair -- events saw a markedly bigger year-over-year increase versus new installs. We expect this trend to continue throughout 2009 as experts aren't predicting a full economic recovery until the following year, and VARs continue to tighten their fiscal belts.
This year, consumers and businesses are saving money by doing more with less, while VARs will further utilize the platform-as-a-service model to save monetary and human capital. The top trends we expect to see across the IT industry in 2009 include:
-- Fix not Buy: "I'll fix it first, and then buy only what I absolutely need." This is what we saw played out this year as businesses and consumers tried to make do with what they had. This is a significant shift in mindset from just a couple of years ago, when many consumers and businesses purchased new products rather than repairing them. Furthermore, consumers and businesses will delay purchases of new equipment until it is an absolute necessity. In 2008, there was a sharp increase in the break-fix sector, with 65 percent of work orders in break-fix across all service sectors including network, POS, server and VoIP.
-- Customer Becomes Price King: Decreasing demand will put customers in the driver's seat when it comes to pricing for service and equipment. Customers will feel a greater sense of mobility to shop around and wait for the best deals when it comes to purchasing new equipment and negotiating service contracts with VARs and resellers. Channel businesses not accustomed to haggling will need to become better versed in the art of the deal.
-- Cheap Becomes Chic: The lure of popular brand name technologies is being replaced by the lure of saving money; businesses and consumers will seek new ways to tighten their belts by purchasing lower-cost equipment such as netbooks vs. notebooks and non-branded PCs vs. branded -- hence, cheap becomes chic.
-- Outsourcing Internal IT Needs: An accelerating shift to outsourcing by many corporate IT departments and service providers will create an increase in both repair and new installation work for internal use as downsizing continues. For many, it will become necessary to use a third-party vendor, thus enabling them to free up valuable in-house IT personnel for more pressing needs. According to Forrester Research, the managed services industry is poised for greater expansion in 2009 as VARs and resellers look to reduce costs throughout the installation and aftermarket service supply chain. This will result in greater opportunities for service technicians, contractors and other third-party entities.
There is a tremendous amount of opportunity in the break-fix sector for VARs and OEMs to remain profitable and grow in these times by understanding the trends mentioned above. As companies continue to streamline their service processes, a redefined service model for VARs and vendors will emerge thanks in part to close assessment of more affordable options and prudent spending habits.
Peter Cannone is the CEO of OnForce (www.OnForce.com) a national network of onsite service providers connecting service demand with local supply through an online marketplace.
We can all agree that the poor economy is a fundamental game-changer in how customers and consumers are choosing to spend their IT dollars these days and, in turn, VARs are struggling to respond to these shifts in order to stay profitable. 
