SYSTEM SUPPORT A STRATEGIC, BUT UNPROFITABLE BUSINESS.
System support is still one of the largest IT services market and
one of the most strategically important in Europe, despite being one of
the least profitable, according to a new report from International Data
Corp. Gross profit margins are continuing to decline in the sector, and
IDC says the only way to halt the decline is increased operational
efficiencies. Those who enjoy the highest margins are the companies
focusing on supporting their own product lines, who can, to some
extent, set their own prices. Companies supporting third party products
face the tightest squeeze, particularly in the desktop space.
Subcontracting low margin activities, minimizing stock, automating
support processes and generating economies of scale are all cited as a
means of increasing efficiency. But high availability support and
support centered around internet-based electronic commerce
infrastructures will be the keys to success in this market, concludes
the report, Operational Efficiency in the System Support Market,