Managed service providers (MSPs) are adding to their revenue streams by deepening their involvement in the security market as they look for continued growth.
Research carried out for this year’s MSP Day revealed the channel had continued to evolve over the past year and identified those areas that would deliver opportunities.
The Evolving landscape of the MSP business 2023 report, which accompanied the sixth annual day for celebrating managed service providers, provided an insight into the progress made across the channel, with global services-related MSP revenue set to increase by a further 25% in 2023 compared with 2022.
The research found that even in the face of economic headwinds, many MSPs were feeling confident and were expecting to expand on their position in 2022, with revenues expected to increase from an average of $12m per MSP last year to over $16m in 2023.
Many had responded to the increased need from customers for security expertise and 85% of respondents were seeing an increased need to provide a security operations centre (SOC).
For MSPs, the impact of hybrid working could be seen, with just shy of half making sure they could support more flexible working. There were also fears about increased competition and stress levels, which for the average firm were likely to remain high across 2023, underlining the pressure many MSPs are under to support customers and nurture the growth of their own business.
“To see growth in MSP revenues over the last year, largely driven by adding additional security services, shows that MSPs are more relevant to their customers than ever, and that they are an extremely resilient and tenacious bunch. The report also suggests that MSPs are ready to continue that growth, adding more services to their portfolio over this coming year than last,” said Jason Howells, vice-president, managed service provider, international sales, at Barracuda MSP.
“I was pleased to see there is a lot of confidence and much to be proud of. MSPs should take the opportunity to reflect on their achievement, celebrate their successes, continue to learn from their peers and lead with security-focused services to meet the needs of their existing customers, as well as exploring new routes for incremental revenues,” he added.
The report also revealed that sustainability continues to be a top priority for MSPs as they look to improve the position of their own businesses and help customers.
Almost all respondents (99.8%) said their organisation was taking steps to boost its sustainability credentials and half revealed they were making getting to net zero a key part of their business strategy.
“There are many opportunities for MSPs in 2023. Small and mid-sized businesses face an enormous gap between their current level of security and the level of security they should have to stay safe,” said Roy de Bruijn, chief commercial officer at Tredion.
“It is our responsibility to raise awareness among SMBs of the cyber security risks they face, the gaps they need to address, the compliance requirements they face – such as the NIS2 Directive in Europe – and the investment that needs. The future is bright for MSPs who have the people with the skills to support customers through that journey,” he added.