The managed services business will see domination by the top five per cent of providers while increasing cyber-attacks, and security may be the disruptor that cloud never turned out to be says CEO of Continuumm Michael George (pictured giving the keynote at the service technology platform user conference last week in Boston). He highlighted the biggest shifts taking place in the industry, and unveiled the Continuum Security Go-To-Market Business Plan to support MSPs in the phase change.
While mainly talking about the US market Michael George also says there are tell-tale signs in any market. He tells IT Europa:
“Given the geographical and demographic diversity in the small to medium business markets throughout Europe, MSPs will increasingly struggle with a shrinking workforce compounded by GDPR and other critical security initiatives, which will make it harder for smaller MSP firms to compete. Having said that, the concentration of revenue will stay more fragmented then it will be in the US, however, service providers there should be on the lookout for warning signs, such as increasing M&A activity, a reduction in the workforce and an increase in size of the top firms in the biggest metropolitan areas.”
A combination of market forces has created the perfect storm which will allow just 20% of the 40,000 MSPs in the United States to dominate 80% of the available revenue by 2020: a reduction in the workforce of up to 40%, mass market consolidation through merger and acquisition, and the dominance of large-scale MSPs in 107 metropolitan areas across five verticals.
And the security issue will be the driver for customers to switch suppliers: “At the beginning of the year, we predicted that security would be the number one reason why end-customers fire their providers,” Michael George said. “Today, that likelihood has only increased, because SMBs are no more than two degrees of separation from a business that has been hit by a cyber-attack. The threat has moved from our news headlines into our business circles, and every businessowner is fearing annihilation.”
