Security outfit Kaseya released its third annual Datto Global State of the MSP: Trends and Forecasts for 2024 Report, which surveyed 1,575 MSPs worldwide about what keeps them up at night.
The survey provides an in-depth look at the current state of the MSP market, demonstrating the critical role MSPs play in the overall success of small and mid-size businesses, how the landscape has evolved and what the industry can expect in the coming year.
Kaseya’s SVP of Product Marketing, Holly Pateman said that MSPs have been the unsung heroes of tech, this year’s survey results.
“With revenues and competition on the rise, and a focus on the need for a superior customer experience, MSPs have a front row seat to what makes their customers successful. As a result, these MSPs have a clear view into what keeps a major cornerstone of our economy – small and midsize businesses – running.”
According to the report, the MSP industry has exploded over the last few years with major growth in 2023, despite a difficult economic climate. In North America, 68 per cent of MSPs experienced a revenue increase, and among them, 38 per cent saw their revenue grow by more than 10 per cent. Likewise, the revenue increase was also significant in Europe.
Nearly two-thirds (64 per cent of MSPs in Europe experienced year-over-year revenue growth, and among them, 37 per cent of those experienced an increase of more than 10 per cent.
The survey shows that competition is stiff. More than a third (35 per cent) of MSPs globally cite competition as the biggest challenge, up from 29 per cent last year. While seen as a challenge, MSPs are harnessing this competition to drive innovation and are offering solutions to better meet their clients’ needs, with 91% regarding customer experience as a high or top priority.
With the IT needs of SMBs and MMEs constantly changing, the main priorities that stood out for IT professionals to keep in mind in the coming year include:
• Embrace vendor consolidation: 74 per cent of respondents said they prefer to use fewer vendors to meet their technology needs — up from 64 per cent in 2022. Fewer vendors mean a streamlined supply chain, improving procurement, delivery, deployment, asset management and services.
• Expand the service portfolio: Top services that respondents anticipate adding to their portfolios include collaboration software (27 per cent), business intelligence or analytics software (22 per cent), and incident response and forensics (22 per cent).
• Embrace cloud migration: Approximately half of the respondents report that half or more of their clients are shifting their workloads to the cloud. MSPs in North America anticipate the most significant shift in cloud migration in the next three years, driven by clients adopting Infrastructure as a Service (IaaS) and migrating databases and email servers to the cloud. Nearly half of the respondents (47per cent) predict that 75- 99 per cent of their client base will move workloads to the cloud in the next three years.
• Address cybersecurity concerns: 28 per cent of respondents cited their customers’ lack of concern about cyber-risks as a major cybersecurity challenge. It underscores the pressing need for MSPs to be equipped with the tools and knowledge to educate their customers effectively.
“As we head into the end of the year and the start of 2024, we can all learn from the stories, challenges and successes of the MSPs shaping the future of IT services. We hope that this report will shed light on this thriving industry that is currently experiencing more growth potential than ever before,” said Pateman.
