With IT playing an even bigger role for millions of small and medium businesses, MSPs have become essential service providers to this evolving market. In fact, as SMBs increasingly entrust their IT to MSPs, individual MSPs are benefiting from that growth. Over the past three years, 22% of MSPs reported that their total revenue per year grew by up to 5%, and 24% of MSPs reported growth of up to 10%.
Supporting MSPs in this economy and market, the two most consistent drivers of MSP growth include generating a higher portion of total revenue from managed services, and setting specific revenue and growth goals. Combined, these two activities enable MSPs to roughly double their rate of growth. In fact, for every 10% of total revenue derived from managed services, MSPs grow their businesses by between 0.25% to 0.75% on an annual basis. Further, the survey suggests that larger MSPs and also upstart MSPs located in North America are growing at the fastest rate.
Though many cited economic uncertainty as the main driver of potential fiscal challenges, an increase in cloud migrations may offset losses. The survey found that 57% of MSPs expect the use of on-premises servers for critical applications to decline over the next three years. Worldwide stay-at-home orders have dramatically increased demand for cloud and IT for many businesses, with MSPs playing a critical role in helping businesses meet the demands of the accelerated digital economy.
In addition to the unknown economic landscape, client cybersecurity, work/life balance, sales and marketing and hiring are the top issues keeping MSPs up at night. Cybersecurity continues to be a pain point, with 34% of MSPs citing this as a top concern (compared to 30% in 2019). However, rising concerns around cybersecurity could indicate a higher demand for security services from clients, as SMBs increase their awareness about IT security. This paints an optimistic picture for MSPs who offer effective cybersecurity services, as it is now a requirement for SMBs.
Datto will be hosting its first virtual MSP Technology Day on Thursday 25th June. Details
