Half of European MSPs are now servicing over 100 clients on annual contracts – up 23 percent on last year.
Datto recently surveyed 400 European MSPs, for its 2018 European State of the MSP Report, which highlights the challenges facing the global channel and which business goals are of most importance to MSPs.
It found that half of European MSPs are now servicing more than 100 clients on annual contracts – up 23 percent on last year’s report findings, which indicates that savvy CIOs are recognising the benefits of channel partners when prioritising their business’ digitalisation and employee/customer experience strategies.
Selling backup and disaster recovery (BDR) solutions as a challenge has dropped from 18 percent in 2017 to just eight percent this year, proving that thanks to ransomware and cyber security issues over the past year, BDR is no longer such a hard sell for MSPs, as businesses and end users are becoming smarter about the need to backup and mitigate against issues before they arise
MSPs that specialise stand more chance of monetising as they differentiate themselves in an often-overcrowded market. The report highlighted the majority of MSPs already recognise this need for specialisation services. In 2017, professional services was the top vertical targeted by MSPs, followed by manufacturing and construction then healthcare. But now 55 percent of MSPs offer specialised services for manufacturing companies, with financial (49 percent), legal (42 percent), non-profit (37 percent), education (34 percent) and healthcare (33 percent) specialised services were also target industries.
Reddit is the go-to forum of choice for the channel, the same as in 2017. So CIOs and end users that are socially active are likely to already be in touch with a wealth of MSP players and advisors.
Datto’s Mark Banfield said that the European managed service provider (MSP) channel is continuing its strong upward climb, as shown by its report’s findings. It’s clear that recurring revenue is the way forward with half of MSPs servicing more than 100 clients on annual contracts, he indicated. As a result of this strong growth, MSPs are seeing significant revenue returns with 37 percent turning over $1 to $5 million on an annual basis and 12 percent reporting revenues of $5 million or more every year.
Despite market growth, MSPs are still facing an enormous challenge with marketing and sales efforts, with 47 percent citing this as their biggest struggle – above staffing/training (37 percent) and ransomware/cyber security (33 percent). MSPs looking to continue to improve their business growth will need to dedicate time to recruit the right staff to run their sales and marketing efforts, so that they can concentrate on their customers.
Marketing pain points include lead generation, followed by hiring sales talent, cold calling and market differentiation. To mitigate this, MSPs should partner with a vendor who understands their need for sales and marketing support.
MSPs that specialise stand more chance of monetising as they differentiate themselves in an often overcrowded market. While offering a generic service may seem like the sensible way to attract a wider pool of potential customers, focusing business efforts for a specific vertical, or verticals, is far more likely to make MSPs stand out. The majority of MSPs already recognise this and 55 per cent of them now offer specialised services for manufacturing companies, while specialised services in the financial (49 percent), legal (42 percent), non-profit (37 percent), education (34 percent) and healthcare (33 percent) sectors were also target industries for MSPs.
The channel is synonymous with long-term relationships and MSPs are becoming more social, with 90 percent using social networks, including Facebook (65 percent), LinkedIn (56 percent) and Twitter (29 percent) on a daily basis. Only 10 percent of MSPs do not use any form of social media and, when it comes to socialising with industry peers, Reddit is the go-to forum of choice for the channel.
