MSPs a beacon of stability during the permacrisis
When I was younger, I remember my mother sometimes exclaiming ‘Would you look at the state of that?’. When she uttered that phrase, she was not inviting anyone within earshot to join her in admiration of the state of the ‘that’ or person she was urging them to look at. Far from it. Usually, she was asking the person with her to join her in disparaging something that was far from perfect.
Luckily, when Datto asks people to look at its Global State of the MSP Report: Looking Ahead to 2023, the response is likely to be far more positive. While the world might be in the grip of permacrisis in 2022, the MSP community is having a pretty good run of it at the moment.
According to the survey of more than 1,800 MSPs worldwide, 95% think now is a good time to be an MSP and 82% expect revenue to increase over the next three years. Almost three-quarters (74%) are anticipating growth of more than 5% (up from just under half in 2021).
If you were wont to quibble, you could note that 98% of respondents said it was a good time to be an MSP last year and 96% expected a revenue increase over the next three years. But considering the backdrop of high inflation, high interest rates, surging fuel prices and the consequences of Russia’s illegal invasion of Ukraine in 2022, it doesn’t look as if the MSP community is wallowing in pessimism.
The biggest cause for concern for MSPs, funnily enough, comes from within, namely competition from other MSPs. This is the second year in a row that competition from fellow MSPs has been viewed as their biggest challenge. It says something about the increasing levels of competition within the MSP space that 2021 was the first time competition from other MSPs was identified as the biggest challenge.
Fred Voccola, CEO at Kaseya, Datto’s parent company, describes this finding “as no surprise. The pandemic led to an increase in need for IT services and produced savvy customers who like to shop around. MSPs have had to evolve to keep pace with the competition”.
Nevertheless, despite their generally rosy outlook, it’s intriguing that revenue growth and profitability are tied in second place as the biggest challenge for MSPs. Clearly, the vast majority of them believe they will overcome those challenges.
In terms of size, 36% of respondents had annual revenues between $1 million and $5 million and just under a third reported revenue of less than $1 million.
According to Datto, one of the most surprising findings in the report was that revenue generated from break-fix is increasing. The company said it had “re-emerged as co-managed services, which enables MSPs to get a foot in the door with larger business by focusing on a specific IT challenge”.
As Voccola puts it: “The traditional break-fix model is evolving, and it represents a gateway for MSPs to secure new business.”
The survey also found that 95% of MSPs identified new market opportunities in cloud integration as more clients looked to the cloud for better storage design and implementation, as well as to provide better productivity and collaboration across teams. Close to half of respondents expected over three-quarters of their workloads to be in the public cloud within three years, up 25% from last year’s survey.
Judging by the findings of the report, the state of MSPs is well worth a look. If you want to look at the state of that, you can download it here.
Subscribers 0
Fans 0
Followers 0
Followers