Managed service providers (MSPs) are essential service providers for millions of small and midsize businesses (SMBs) worldwide. MSPs are always on the go, keeping up with the latest technology and changes in the industry. They are constantly looking for new opportunities to grow their businesses. But what makes MSPs tick? What keeps them up at night? And what are their biggest opportunities? This blog post will explore these questions and more.
Challenges faced by MSPs
A study by Datto, a Kaseya company, reveals that 29% of surveyed MSPs rate competition as their biggest challenge. 28% rank revenue growth and profitability as pressing challenges while 24% feel acquiring new customers and hiring is a difficult task.
Even though technologies are becoming more advanced and helping to combat breaches, MSPs are still having trouble finding skilled security specialists. They are also struggling with the complexity of current security products.
The top barriers MSPs face to offer cyber security solutions are:
- Hiring skilled cybersecurity professionals (42%)
- Complexity of cybersecurity products (41%)
- Managing too many different cybersecurity products (38%)
- Insufficient training of existing staff (33%)
Current MSPs offerings and what they plan to add
90% of MSPs offer cloud-based infrastructure design and management. This indicates that the shift to the cloud continues to be strong among SMBs. The top 5 MSP offerings include office productivity software services, networking, Business Continuity and Disaster Recovery (BCDR), and technical support.
The below figure shows the anticipated growth areas for MSPs within the next 12 months.
As per the study, 97% of responding MSPs offer managed security services. The top three types of security services that are currently being offered are email security (76%), followed by password policy management (71%), and security framework and compliance auditing (69%). Many areas are expected to grow in the future, with managed detection and response, dark web monitoring, compliance monitoring, and privileged access management taking the lead.
Managed security services that are top-of-mind for MSPs are:
- Managed detection and response (30%)
- Dark web monitoring (30%)
- Web content filtering (29%)
- Compliance monitoring (29%)
- Privileged access management (29%)
- Endpoint detection and response (EDR) (28%)
- Patch management (28%)
- Incident response (IR) & forensics (28%)
Current trends
The revenue MSPs generate from break-fix services is increasing. Internal IT departments are unwilling to work with new vendors, so MSPs often get an opportunity to fix a problem for them in order to form a relationship. For example, MSPs may offer a compliance audit and then offer to help manage the results through a co-managed service. This opens the door for future service offerings from the MSP.
Cloud integration is becoming more popular as clients look for better storage design and implementation that can increase productivity and collaboration. 95% of MSPs found that the cloud presents new market opportunities. However, many MSPs have been hesitant to move to the cloud due to compliance, security, or budgetary concerns. Yet 50% of MSP respondents expect 75% of workloads to be in the public cloud within three years.
Get the complete report here.
Source: Datto Global State of the MSP Report
Read next: $2 trillion market opportunity for cybersecurity technology and service providers, finds McKinsey
