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The third annual MSP Day has arrived at a point when most managed service providers (MSPs) are proving their worth to customers navigating the challenges posed by the coronavirus.
As well as marking a moment when the industry can pause and note the achievements of MSPs, the day is accompanied by research that provides an update into the state of the managed services world.
The theme last year was around the need for more education to make sure customers grasped what a managed service provider could do for them. In this year’s Evolving landscape of the MSP business report, the message is around security being a key growth area.
There has been a positive shift in the perception of MSPs since the last report, with a rise in the number of channel players that view services as the best opportunity to secure their financial future.
The headline number from this year’s report was that 69% of respondents viewed managed services as their top revenue generator and largest opportunity for increasing sales this year. That compared with 54% last year, indicating that there is real momentum in the channel towards a services model.
That 69% compared with only 2% that saw hardware sales delivering them revenue growth and 1% holding onto software licence sales as the golden ticket.
As well as looking to increase services activity, nearly all MSPs (91%) planned to expand their portfolio this year to be able to offer customers a larger breadth of options. Just over half (53%) expected more than half of their business would come through managed services this year. The vast majority also saw demand from customers increasing.
Security had also risen up the charts in terms of areas MSPs were concentrating on, with endpoint and network protection rising in popularity.
Since the Covid-19 coronavirus lockdown, the number of phishing attacks has risen considerably, so the chances are even more MSPs are concentrating on supplying customers with services in that area.
Rising appetite for managed services
“Since launching MSP Day, and the corresponding Evolving MSP landscape report, we’ve witnessed a steady rise in the appetite for managed services throughout the world, which is evident in this year’s findings,” said Brian Babineau, senior vice-president and general manager for MSP Solutions at Barracuda.
“Among that appetite, security is the most sought-after service, particularly given our current global situation and cyber criminals’ willingness to exploit organisations that are suddenly much more vulnerable,” he added.
Reaching out to MSPs to help, particularly with security, was often a consequence of customers lacking in-house skills. Carolyn April, senior director of industry analysis at CompTIA, said there were no signs that the situation would change anytime soon.
“Security as a managed service is only going to become more sought after as organisations continue to wrestle with a shortage of skills and adjust to new working conditions, presenting a huge opportunity for MSPs to bolster their portfolios and cement themselves further as vital partners to their customer base,” she said.
“Despite the skills gap and the pressure of consolidation for many, this report portrays a growing opportunity for the MSPs of the world as adoption of managed services continues to rise – of which security offerings are the leading commodity,” she added.
Key findings of Barracuda’s MSP landscape report
- The majority of MSPs plan to expand their services portfolio in 2020.
- Managed services looks to be the top revenue generator for the vast majority of respondents.
- MSPs favour a hybrid approach to services.
- Security services are higher up the agenda for MSPs this year – endpoint security, email security and network security all made it into the top five services table in 2020.
- Rising security concerns and a lack of in-house skills among customers are driving the need for third-party service providers.
- The vast majority agree that demand for managed security services is increasing.