STATE OF THE

IT INDUSTRY
REPORT

1ST QUARTER, 2008

STATE OF THE INDUSTRY REPORT
TABLE OF CONTENTS

INTRODUCTION & METHODOLOGY ......................................................P. 1

MOST EXPENSIVE STATES ...................................................................P. 2

HIGHEST VOLUME STATES ..................................................................P. 3

MOST EXPENSIVE CITIES ......................................................................P. 4

HIGHEST VOLUME CITIES .....................................................................P. 5

HIGHEST VOLUME ZIP CODES................................................................P. 6

MOST EXPENSIVE IT CATEGORIES.........................................................P. 7

MOST EXPENSIVE IT SUB-CATEGORIES..................................................P. 8

ABOUT ONFORCE ...............................................................................P. 9

Hourly rates in the VoIP / Telephony

category are more than 60% higher than
POS. And the networking and software
categories are even less expensive.
STATE OF THE INDUSTRY REPORT

Introduction & Methodology:

This State of the Industry (SOTI) report was compiled by OnForce, the world’s largest marketplace
for IT service professionals. Since its inception, the OnForce Marketplace has been used to
complete nearly 750,000 work orders. The timeframe for this study is the January 1 – March 31 of
2008, and it encompasses data from all the service events from this timeframe from more than
1,000 VARs, solution providers and IT service firms.

We used best practices of statistical analysis to compile and normalize this data in an effort to
maximize accuracy and reliability for our readers. We’ve provided some base-level analysis with
each table, although we were careful to let the data speak for itself. Our intent is to publish this
report on a quarterly basis and, in the future, to include quarter-over-quarter and year-over-year
comparisons.

Statement of Purpose:
We’ve put this report together and offered it free to IT industry companies, analysts and media for
three reasons:
ƒ First, this type and volume of real-world transactional information about the IT services industry
doesn’t exist anywhere else;
ƒ Second, we believe it’s critical for industry leaders and innovators to make decisions based upon
reliable, real-world data, as opposed to intuition. We did not publish this report to push any
agenda or point of view. We simply believe that informed leaders make better decisions.
ƒ Finally, this information serves as a roadmap to service companies and professionals alike,
pointing the way to the highest value categories and locations for profitable expansion.

If you have questions, or would like to learn more about the trends within the IT services industry,
please reach out to your contact at OnForce, or email us at trends@onforce.com.

Best regards,
Matt Johnston

Vice President of Marketing

OnForce, Inc.
p: 781.761.9209
e: matt.johnston@onforce.com
w: www.onforce.com

SOTI Report – Glossary of Terms:

Number of Providers – The number of service professionals within a given location or category.
Average Work Order Value – The average price of a work order within a given state or category.
Hourly Rate Index – The hourly rate index (HRI) enables a comparison of the cost per on-site hour.
The national average is pegged at 1.00, so if a state has an HRI of 1.25, that state has an hourly rate
that is 25% higher than the national average. If a category has an HRI of 0.80, the hourly rate of that
category is 20% lower than the national average.

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STATE OF THE INDUSTRY REPORT

Most and Least Expensive States:

States like NY, TX
and CA are less Data Snapshot: Wyoming, Vermont and Alaska are the states with the
expensive on the highest hourly rates, at nearly 2X the national average. Georgia, Arizona
whole than WY, ND and Oklahoma have the lowest hourly rates for IT services at more than 30%
and ID. below the national average.

Our Take: What drives hourly rates in each state? There are a number of
factors, but we observed a strong inverse relationship between the hourly
rates and the number of IT service professionals in a state. Fewer service
pros in a state yields longer average acceptance times, and a higher hourly
rate – straightforward supply and demand.

Density of service professionals (defined as the number of service pros per

square mile) is an even more telling indicator of hourly rates, which explains
why states like Wyoming, Alaska and North Dakota – where service
professionals are relatively scarce – are among the most expensive states.

It’s worth noting that we found no discernible correlation between

geography and whether a state is more or less expensive, so the Northeast
isn’t necessarily more expensive than the Midwest. To see where your state
ranks, see the OnForce MarketView Index at www.onforce.com/marketview.

ONFORCE: STATE-BY-STATE HOURLY RATES

State HRI Rating State HRI Rating State HRI Rating
WY 2.28 1 NM 1.33 18 NJ 1.00 35
VT 1.91 2 CT 1.28 19 NY 1.00 36
AK 1.80 3 NE 1.27 20 TX 0.98 37
ND 1.68 4 RI 1.26 21 VA 0.96 38
ID 1.61 5 UT 1.23 22 DC 0.94 39
HI 1.55 6 LA 1.17 23 MN 0.94 40
PA 1.54 7 AL 1.16 24 IL 0.91 41
WV 1.54 8 MI 1.14 25 ME 0.88 42
AR 1.53 9 MO 1.13 26 CA 0.85 43
MS 1.47 10 IN 1.11 27 MA 0.81 44
KS 1.46 11 NV 1.11 28 SC 0.77 45
CO 1.45 12 FL 1.10 29 NH 0.72 46
IA 1.44 13 NC 1.10 30 WI 0.71 47
MT 1.42 14 TN 1.06 31 KY 0.70 48
SD 1.38 15 OH 1.05 32 GA 0.67 49
WA 1.37 16 DE 1.03 33 AZ 0.61 50
OR 1.36 17 MD 1.03 34 OK 0.59 51
TABLE 1

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STATE OF THE INDUSTRY REPORT

Highest Volume States:

States like CA and
FL have nearly 40X Data Snapshot: California, Florida and Texas have the largest IT service
the volume of those economy, defined as the volume of IT service events completed. Vermont,
states at the bottom Delaware and Rhode Island have the smallest volumes in the U.S.
of this list.
Our Take: There is a strong correlation between a state’s population and
the size of its IT service economy. Thus, the highest volume states tend to
be those with large populations and economies, such as California, New
York and Illinois. Whereas the other end of the spectrum is filled with lower
population states such as Rhode Island, Wyoming and South Dakota.

ONFORCE: STATE-BY-STATE VOLUME RANKINGS

State Volume Ranking State Volume Ranking
CA 1 CT 27
FL 2 LA 28
TX 3 MN 29
NY 4 IA 30
PA 5 KS 31
IL 6 UT 32
VA 7 AR 33
OH 8 OK 34
NC 9 AK 35
GA 10 NM 36
NJ 11 ID 37
MI 12 NE 38
TN 13 MS 39
MO 14 MT 40
AZ 15 HI 41
WA 16 DC 42
MA 17 ME 43
MD 18 WV 44
CO 19 ND 45
SC 20 NH 46
WI 21 SD 47
IN 22 WY 48
KY 23 VT 49
AL 24 DE 50
NV 25 RI 51
OR 26
TABLE 2

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STATE OF THE INDUSTRY REPORT

Most Expensive Cities:

Four of the most
expensive cities are Data Snapshot: Akron, OH, Topeka, KS, Irvine, CA and Parsippany, NJ top
in Florida, more than the list as the cities with the highest hourly rates in the country, at more
in any other state. than 3X the national average.

Our Take: There are many reasons why hourly rates may be higher in one
city than national or even statewide averages. In general, in these cities we
observed an imbalance between IT service supply and demand. Said
differently, there is a correlation between the ratio of service pros to
volume, and the hourly rates that the local market will bear.

We also noticed that the average work order size in these cities tends to
exceed the national average, indicating that the work in these locations may
be larger scale and/or more complex. See details for any state or the top
100 U.S. cities at www.onforce.com/most_popular_workorder_locations.

ONFORCE: CITY-BY-CITY HOURLY RATES

City State HRI
AKRON OH 3.76
TOPEKA KS 3.62
IRVINE CA 3.48
PARSIPPANY NJ 3.17
GREENSBURG PA 3.02
GAINESVILLE FL 2.49
ORLANDO FL 2.37
GILBERT AZ 2.36
BROOKFIELD WI 2.33
CLEARWATER FL 2.27
APPLETON WI 2.12
OWENSBORO KY 2.12
LAKELAND FL 2.11
BROOKLYN NY 2.07
BEAVERTON OR 2.06
DALLAS TX 2.01
ANCHORAGE AK 2.00
MISSOULA MT 1.95
TOLEDO OH 1.93
ALTOONA PA 1.92
DULUTH MN 1.88
GRAND JUNCTION CO 1.87
DENVER CO 1.86
ROCKFORD IL 1.85
STOCKTON CA 1.84
TABLE 3
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STATE OF THE INDUSTRY REPORT

Highest Volume Cities:

Five of the top 25
highest volume Data Snapshot: New York, Houston and Chicago top the list as the busiest
cities are in Texas, IT service cities in the U.S.
more than in any
other state. Our Take: While there’s a correlation between a city’s population and its
volume of service events, there were some definite surprises on this list.
For example, although cities like Las Vegas, Miami, Atlanta and Orlando
don’t crack the top 25 list for highest population, they’re among the busiest
cities when it comes to IT services. To see the volume in your city, or to
learn about any of the below markets, search at www.onforce.com/explore.

ONFORCE: CITY-BY-CITY VOLUME RANKINGS

Volume Population
City State Ranking Ranking *
NEW YORK NY 1 1
HOUSTON TX 2 4
CHICAGO IL 3 3
LAS VEGAS NV 4 28
SAN ANTONIO TX 5 7
MIAMI FL 6 43
LOS ANGELES CA 7 2
ATLANTA GA 8 34
JACKSONVILLE FL 9 12
ORLANDO FL 10 85
DALLAS TX 11 9
PHOENIX AZ 12 5
WASHINGTON DC 13 25
RICHMOND VA 14 113
NASHVILLE TN 15 29
TAMPA FL 16 55
BROOKLYN NY 17 **
SAN DIEGO CA 18 8
ALBUQUERQUE NM 19 33
CHARLOTTE NC 20 20
AUSTIN TX 21 16
IRVING TX 22 108
BOSTON MA 23 23
PHILADELPHIA PA 24 6
DENVER CO 25 26
TABLE 4
* Source: U.S. Census Bureau
** Brooklyn is considered part of New York City for census purposes, but
OnForce tracks the city name of each service event. Brooklyn’s population
of approximately 2.5 million would rank in the top 5 largest U.S. cities.

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STATE OF THE INDUSTRY REPORT

Highest Volume Zip Codes:

Florida, Texas and
Virginia are home to Data Snapshot: The highest volume zip codes in the U.S. are in West Palm
40% of the 25 top Beach, FL; Frisco, TX; and Irving, TX.
volume zip codes.
Our Take: The list of zip codes with the greatest volume of service events
can be explained in one of two ways: these zip codes are either part of a
large metropolitan area, such as Brooklyn, Chicago or Houston, or there was
highly repetitive project/staffing work that was being done in that area
during the 1st quarter. Search for IT professionals in any zip code in the U.S.
at www.onforce.com/explore.

ONFORCE: ZIP CODE VOLUME RANKINGS

City State Zip Ranking
WEST PALM BEACH FL 33404 1
FRISCO TX 75034 2
IRVING TX 75063 3
TROY MI 48083 4
LAKE MARY FL 32746 5
FARGO ND 58103 6
WINDSOR CT 06095 7
MIDDLETOWN PA 17057 8
SHARONVILLE OH 45241 9
JUNEAU AK 99801 10
PARSIPPANY NJ 07054 11
OWENSBORO KY 42301 12
HOUSTON TX 77002 13
BROOKLYN NY 11232 14
CHICAGO IL 60606 15
FRESNO CA 93720 16
ALBUQUERQUE NM 87102 17
NASHVILLE TN 37214 18
ARLINGTON VA 22204 19
RENO NV 89502 20
RICHMOND VA 23219 21
NEWPORT NEWS VA 23602 22
FORT LAUDERDALE FL 33301 23
JACKSONVILLE FL 32256 24
NEW YORK NY 10016 25
TABLE 5

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STATE OF THE INDUSTRY REPORT

Most and Least Expensive IT Categories:

The HRI for VoIP /
Telephony work is Data Snapshot: The hourly rates for VoIP / Telephony, Wiring & Cabling
more than 60% more and Consumer Electronics are the highest of all IT categories. Computer,
expensive than POS Networking and Software work yields the lowest hourly rates.
or Networking.
Our Take: We’re not at all surprised to see VoIP at the top of this list as the
most expensive IT service category, given that it’s an emerging technology
compared to established categories like Networking and Computers. In our
conversations with VARs and solution providers, this is attributed to the
idea that “where there’s mystery, there’s margin”. For those service
companies and professionals looking to discover which categories of the IT
universe offer the highest service margins, this list offers a solid roadmap.
To view details for each state by category, check out the OnForce
MarketView Index at www.onforce.com/marketview.

ONFORCE: IT CATEGORY HOURLY RATES

Average WO
Category HRI
Value
VoIP/Telephony $449 1.50
Wiring & Cabling $282 1.36
Consumer Electronics $116 1.26
Security $128 1.19
Computer Laptop $129 1.09
Computer Peripheral $118 1.04
Printer/Copier $111 0.94
Point of Sale $172 0.92
Server $197 0.90
Computer Desktop $163 0.85
Network $210 0.81
Software $255 0.79
TABLE 6

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STATE OF THE INDUSTRY REPORT

Most Expensive IT Sub-Categories:

The Consumer
Electronics category Data Snapshot: VoIP / Telephony complete systems, server expansion
has five of the top cards and POS digital signage top the list as the IT sub-categories with the
25 IT sub-categories. highest hourly rates.

Our Take: Similar to the previous table, the below information lays out in
greater detail which corners of the IT landscape offer the highest hourly
rates and, presumably, some of the highest margins.

Based upon our conversations with VARs and solution providers, we believe
three factors are at work: the relative complexity of the technology, the
relative maturity of the technology, and the urgency of a given service
event (which would help explain the presence of several POS and
networking items on the list).

ONFORCE: IT SUB-CATEGORY HOURLY RATES

Average
Category Sub-Category WO Value HRI
VoIP / Telephony Complete System $2,449 5.49
Server Expansion Cards $133 2.92
Point of Sale Digital Signage $393 2.13
Consumer Electronics Projector $522 2.11
Security Alarm Systems $150 2.10
Consumer Electronics PDA $187 2.04
Point of Sale Receipt Printer $92 2.00
Wiring & Cabling Dropped Ceiling/Raised Floor $591 1.89
Computer Desktop CD/DVD Reader or Burner $92 1.87
Computer Peripheral Backup Storage $172 1.86
Computer Peripheral Scanner $98 1.78
Wiring & Cabling In Wall $431 1.75
Consumer Electronics Plasma/Flat Panel TV (on wall) $171 1.69
Server Storage Network (SAN) $145 1.66
Server CPU $175 1.66
Computer Peripheral Hard Drive/Flash Drive $150 1.64
Server Network Connectivity $238 1.61
VoIP / Telephony Hardware/Router $542 1.60
Network Switch/Hub $192 1.58
Consumer Electronics Mobile Device $75 1.57
Point of Sale Key Pad $75 1.55
Consumer Electronics iPod/iTunes/MP3 Players $712 1.53
Server Hard Drive $147 1.53
VoIP / Telephony Network Connectivity $236 1.52
Security Closed Circuit TV $126 1.51
TABLE 7

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ABOUT
ONFORCE
OnForce is the world’s largest marketplace for contract IT service
professionals. The company enables VARs, solution providers and IT
staffing firms to find highly qualified service professionals throughout
the United States and Canada.

Thousands of IT service companies turn to OnForce to expand their

geographic and skill set coverage without adding overhead or upfront
expense. OnForce offers buyers increased control and reduced
management costs, while offering higher levels of customer
satisfaction and faster response times than traditional methods of
finding contract technicians.

Since its inception, the OnForce marketplace has been used to

successfully complete nearly 750,000 work orders. The OnForce
community is made up of 5,000+ IT service buyers and 12,000+ IT
service providers who work in a wide range of technology categories,
including computers, printers, networking, VoIP and consumer
electronics.

For more information, visit www.onforce.com or call 1.888.515.0100.

The On-Demand Marketplace For IT Service ProfessionalsSM

10 Maguire Road • Building #2 • Lexington, MA 02421

www.onforce.com | 1.888.515.0100 | info@onforce.com