Managed service providers (MSPs) are feeling the heat to master artificial intelligence (AI) and deliver the support their customers are clamouring for.
Barracuda Networks’ latest study, “The Evolving Landscape of the MSP Business 2024,” illuminates the hurdles the channel community is currently facing.
On the bright side, there’s an anticipation that recurring revenues will make up 45 per cent of total earnings, a jump from last year’s 35 per cent. It’s also expected that most partners will roll out five new services in 2024, with the top performers zeroing in on security.
This focus on recurring income is telling, signalling a move from one-off projects to more enduring partnerships.
Marketplaces are getting a thumbs-up too, with 88 per cent of MSPs saying they’re key to their operations and streamlining their work.
More than 80 per cent of MSPs surveyed admit they need a big boost in their AI know-how and application. Nearly 70 per cent are under the gun to give their customers the lowdown on AI and the tech to go with it.
According to past Barracuda MSP surveys, competition has been a worry for a while, and it’s still a hot topic. Many are banking on growth this year, but over half are bracing for stiffer competition.
With many MSP clients cutting back on in-house IT, the race to be the go-to advisor is on.
Jason Howells, Barracuda’s VP of MSP International Sales said MSPs have to stay nimble to keep their spot as key partners to their client.
“They’re up against not just tech challenges but also business ones like more rivals and fresh market paths. The pinch from the cyber skills gap is now on MSPs’ shoulders,” he said. ”
They’re in a good position to lend a hand, but our findings reveal they’re also struggling to find and keep staff. Adapting to the demand for AI goodies like SOCs is tough but could be a goldmine.”
Howells suggests MSPs buddy up with suppliers who get their struggles and can arm them with the right gear and support as solid ties with vendors who have the know-how will help MSPs back their customers in this quick-change scene.
For MSPs with the right service chops, security smarts, and a handle on the AI craze, the future’s looking bright.
“In 2024, MSPs are their clients’ strategic allies, tackling tech tangles and the security snags of going digital,” said Richard Tubb, an MSP growth guru and MSP Day talker. “Our research shows MSPs are keen on new chances that’ll do wonders for their clients and their own business growth.”
