News and Events
ServiceSource Executive Summit Underscores Maintenance and Support Revenue as Key Profitability Drivers in 2009
Top Technology Companies Convene to Discuss Effects of Economic Downturn, Renewed Focus on Maintenance Annuity Stream and Importance of Protecting Installed Base
10 November 2008, San Francisco, CA — ServiceSource, a San Francisco, CA-based Service Performance Management leader for the high-tech industry, concluded its North America Executive Summit, an annual gathering of Service and Sales leaders from leading global technology companies and channel partners, with a clear message that driving maintenance and support revenue is more critical than ever looking into 2009.
In a confidential survey conducted among executives at the Summit, over 70% of attendees stated they are feeling the effects of the economy on their services businesses. Furthermore, 65% indicated that their clients are placing a higher value on renewing maintenance and service agreements in order to extend the lifecycle of their existing technology investments.
“In some ways, we’re facing a perfect storm in the industry. Maintenance and renewals provide an annuity stream that can account for up to 50% of our client’s revenue. Given the lack of available credit and depressed capital spending, pressure to reduce costs, and a real focus on customer retention, it’s time for technology companies to play defense financially by driving increased service renewals in an expedited and efficient manner,” said Mike Smerklo, President and CEO, ServiceSource. “As the second largest manager of maintenance revenue in the technology industry with over $3B in revenue under management, ServiceSource is laser-focused on maximizing that line item to drive a predictable, profitable revenue stream for our clients.”
According to Gartner, in a worst case scenario for global IT spending, “worldwide IT market growth drops from 5.8% to 2.3% in 2009”.1 With spending on products and licenses expecting to slow, helping customers stretch their IT investments through maintenance and support services is clearly a top priority for technology providers and channel partners. 88% of Summit attendees indicated that services were strategic to business success in 2008 and 92% indicated that its importance would grow in the next year.
“ServiceSource provides accurate data that has helped us manage the ever-changing reseller landscape and has enabled us to align our maintenance strategy to our overall professional services strategy,” said Steve Kedzior, Senior Vice President, Client Solutions, Insight. “The complexity of day-to-day business can slow the decision-making process, but ServiceSource has helped us swiftly collect and analyze the right data needed to run our business more effectively.”
Following the success of its Executive Summit, ServiceSource released a new white paper on “The Value of On-time Renewals”, now available for download at http://www.servicesource.com/how-we-can-help-you/vantage-library.php
1 (Dataquest Alert: IT Market Forecast Worst-Case Scenario, by Richard Gordon et al, October 2008).
About ServiceSource
ServiceSource is the service revenue performance company. We partner with technology, healthcare, and life sciences companies to maximize maintenance, support, and subscription revenue while optimizing customer loyalty. We increase contract renewal rates for clients on average by 10–25 percentage points — and in some cases by up to 40 points. These dramatic results are achieved via a purpose-built service revenue solution, including a suite of cloud applications and managed services built on a proprietary technology platform, which combines the industry's most robust data management engine and a unique service revenue master, leveraging our deep knowledgebase of benchmarks and best practices. Our solution delivers proven results through a 100% pay-for-performance business model that enables a success–driven, shared–risk partnership. Headquartered in San Francisco, ServiceSource has $5 billion in service revenue under management.
For more information on ServiceSource, visit www.servicesource.com or call: 415.901.6030.
About Insight
Insight is a technology solutions provider serving global and local clients in 170 countries on all continents. Today, thousands of clients, including more than 80 percent of the Global Fortune 500, rely on Insight to acquire, implement and manage technology solutions to empower their business. Insight is ranked No. 477 on the 2008 Fortune 500 list.