Break-fix services are on the rise as businesses of all sizes attempt to make do with aging computer equipment.
That's one of the highlights from the year-end report from OnForce, an online services marketplace for CE and IT professionals.
In fact, the majority of work orders performed in 2008 through the Lexington, Mass.-based services platform were for diagnosis and repair and parts swap, said OnForce CEO Peter Cannone. He said that 65 percent of all work orders through On Force were for break-fix in 2008. He sees that trend accelerating in 2009.
"We see a massive shift to diagnose and repair systems this year," said Cannone, who predicted break-fix services will be up 20 to 30 percent in the first half of this year. "The overall mood is IT spending will be down, but services spending will be up."
"The message for solution providers is you can make money on break-fix," said Cannone. "If you have the attitude that you can't make money on break-fix you will be in trouble. Everyone is hunkering down for the storm."
OnForce said that the increased layoffs and economic downturn have more corporate IT departments and consumers turning to the services platform for cost-effective solutions. In addition, the services marketplace sees an increase in sales of whitebook or non-branded systems.
Todd Barrett, director of sales for CPU, a Woburn, Mass.-based solution provider, said CPU is focused on staying in close contact with every single customer in the midst of the economic downturn. "This is the third recession I have been through and the only thing I learned from the last one is it is probably going to change sooner than people think in terms of the perception of customers," he said. "People are going to lose jobs and leave jobs and budgets are going to be cut, but at some point the cat is going to be let out of the bag, IT spending will go up and whoever is at the table when the economy turns is going to eat. The others won't."
Among the other highlights of the 2008 year-end On Force report are:
- Hourly rates were highest for work orders for projectors, home network and peripherals.
- Consumer electronics accounted for four of the top five most expensive onsite service categories in 2008.
- The average value for VoIP work orders was over $500, making it the highest revenue per service event.
As for the fourth quarter data, desktop computer was the highest volume category followed by TV-Video. In addition, hourly rates for network-server onsite services was more expensive than every other consumer electronics category.