A global survey of 419 managed service providers (MSPs) conducted by Barracuda Networks finds that remote work and security are emerging as a primary driver of new business in the last year.
A full 85 percent of MSPs said there was an opportunity to grow their business in 2021 because the overall market was not saturated. More than half of MSPs (59 per ent) have expanded their services portfolios in the past 12 months, with some security service being the most frequently added.
Backup and recovery (90 percent), endpoint security (82 percent), email security (80 percent) and network security (80 percent) are the top four managed services most commonly provided, with email security, endpoint protection and network security among the services in highest demand in 2021, according to survey respondents. However, since the start of the pandemic, backup and recovery (48 percent), business applications (39 percent) and email security (39 percent) are cited as seeing the most increase in demand.
In terms of new opportunities, 90 percent of the respondents cited remote work as their most lucrative opportunity, followed by security at 80 pe cent, the survey finds.
More than half of MSPs (59 percent) said they expect services to account for 50 percent or more of their revenues this year, which compares to 48 percent who said they generated 50 percent or more of their revenue via services in 2020. In addition to providing services, most MSPs resell products, but the rate at which end customers prefer to consume IT as service in the wake of the COVID-19 pandemic has increased.
Vice president of international sales for Barracuda, Jason Howells said the survey notes that MSPs believe their reputation has improved significantly (28 percent) or slightly (43 percent) in the last year as demand for external IT expertise rose. Much of that demand has been driven by the increased complexity of IT environments and a general lack of available skills in critical areas such as security.
In some cases, MSPs are building new practices to complement existing ones to address security, while others opt to partner with MSPs with complementary expertise, noted Howells.
It’s not clear going forward what percentage of IT might be “consumed” as a managed service. Historically, the rate of IT delivered as a service stood well below 20 percent for many years. However, as organisations rely more on IT to accelerate digital business transformation initiatives in the wake of the pandemic, the percentage of IT consumed as a service is likely to expand significantly. “MSPs now find themselves in a unique situation”, said Howells.
