As Prices for Outsourced Desktop Support Drop, Some IT Shops Get Shafted
Some cash-strapped IT departments are inking deals with vendors for desktop support services at rock-bottom prices. But they may be signing up for all-time low levels of service that may defeat the purpose of outsourcing in the first place and cost them more money in the long run.
CIO — Prices for outsourced desktop support have been decreasing steadily over the last three to four years, but some recent rock-bottom deals may be too good to be true.
In the last year, some IT shops have signed new outsourcing contracts for desktop support with prices ranging from $20 and $24 per device per month, according to Ben Trowbridge, CEO of outsourcing consultancy Alsbridge. Yet current benchmarked prices for full desktop support are two to three times that, ranging from $54 to $70 a month, according to data from Alsbridge's benchmarking division ProBenchmark.
[ For more articles on the cost of outsourcing, see Outsourcing Prices: Why the Recession Isn't Really Driving Them Down, Outsourcing Prices Falling, Buyers Getting Savvier and Credit Crunch Changes Economics of Outsourcing. ]
Several factors may be causing the drop in prices for outsourced desktop support, says Trowbridge. Niche providers and offshore vendors have entered the market, offering more aggressive pricing, which in turn pressures traditional players such as IBM Global Services and EDS to reconsider their rates.
Furthermore, because many desktop services can now be provided remotely, outsourcers can offshore support more cheaply. "For example, not too long ago, if a server needed to be rebooted, a person had to manually touch the machine to reboot," says Trowbridge. "Advancements in remote infrastructure management technology now allow the server to be rebooted from a separate location with no physical access required. For desktop services, remote functions have become more of a reality today."
The global recession may be having an effect on desktop support pricing, too. Existing outsourcing customers are scrutinizing their costs, and having laid off employees and reduced their desktop assets, are renegotiating not just for lower prices but for a more limited scope of service, says Trowbridge. That may also cause prices to decrease.
Anticipating the commoditization of desktop support services, outsourcers had already made a number of changes to their service offerings over the last few years in order to offer lower prices while maintaining profit margins: For example, they standardized hardware, locked down user configurations, and quietly unbundled services typically included in desktop support.
A full-service desktop support configuration normally includes asset management, software break/fix support, tier two problem resolution, LAN administration, email, premise network, system monitoring tools, hardware maintenance, file and printer servers and devices, and all IMAC (install, move, add, change) services.
"Over time, larger components of service became unbundled from the overall desktop configuration—components like service desk and e-mail," says Trowbridge. Those were big chunks of services amounting to more than 10 percent of the cost of a typical desktop support configuration. Today, IT service providers have gone further, slicing off even thinner slivers of service such as tier two service support and IMAC, in exchange for lower prices. And IT executives charged with cutting IT costs have shown an increased tolerance for cutting such corners.
