Rob Rae (Datto)
According to findings, the majority of MSPs report an annual revenue of between US$1-5 million, with 80 per cent reporting recurring services driving a portion of their revenue.
This is indicative of the shift seen from IT service providers modelled solely on ad-hoc services to becoming more strategic advisors to their SMB clients, with 44 per cent of respondents reporting that more than 50 per cent of their revenue was from recurring services.
“The survey shows what we see every day, it is a great time to be an MSP,” said Rob Rae, vice president of business development, Datto. “It is a positively charged environment.
“Almost half of surveyed partners have been working in the industry for more than 15 years and nearly 100 per cent of them said that right now is the best time to be in their industry.
"For more than a decade, Datto has been passionate about providing the right technology to MSPs, who support the backbone of the economy through their work with small businesses."
Furthermore, the report also highlighted the efforts MSPs are making to expand and diversify their portfolios in an effort to capture more managed services revenue, such as networking-as-a-service, which many may not think of in terms of a recurring contract model.
Ultimately, Rae said SMBs are willing to pay for managed services to keep their IT infrastructure and networks running efficiently.
“SMBs in particular struggle with increasing IT complexity, an explosion in security threats, greater compliance demands, and intensifying skills shortages,” added Alastair Edwards, chief analyst, Canalys. “More than ever, companies are turning to trusted IT partners to help solve these challenges.
“Canalys research shows that more than 80 per cent of channel partners around the world now offer some form of managed service.
"To stay ahead, IT service providers must evolve their businesses, shifting towards more recurring revenue and greater industry specialisation. Partnerships with the right technology companies and platform providers will be critical to success."
In addition to taking on a more strategic role and expanding their solutions sets, 56 per cent of MSPs specialise in services for a particular industry, with healthcare holding the number one spot for the second year in a row.
Furthermore, 71 per cent of MSPs plan to hire more employees in the next 12 months to keep apace with industry growth.
The report also highlights that MSPs are becoming increasingly savvier when it comes to marketing and sales, however, these areas still represent top challenges for today’s MSPs.
Security also remains a top priority for MSPs and their clients, with ransomware and cyber security almost doubling as a pain point, from 14 per cent in 2017 to 30 percent in 2019.
The top three most critical security offerings according to MSPs are anti-virus, advanced firewall, and remote monitoring and management (RMM) solutions.
