Datto Global State of the MSP Report Reveals Challenges Facing MSPs

Kaseya, a Miami-based provider of unified IT management and security software for managed service providers (MSPs), small to mid-size business (SMBs) and mid-market enterprises (MMEs), has released its Datto Global State of the MSP Report, which surveyed 1,800 MSPs worldwide about key concerns.

Among the respondents, 29% rated competition as their top concern. Revenue growth and profitability were tied at 28% as pressing challenges. Acquiring new customers and hiring were tied at 24%.

“For the second year in a row, the Datto Global State of the MSP Report shows that our partners are worried about the competition,” said Fred Voccola, CEO, Kaseya. “This comes as no surprise. The pandemic led to an increase in need for IT services and produced savvy customers who like to shop around. MSPs have had to evolve to keep pace with the competition.”

The report also found that revenue generated from break-fix is increasing. Internal IT departments are reluctant to work with new vendors, and MSPs often penetrate the market by focusing on fixing a problem for them. For example, they may offer a compliance audit and the results may lead to the MSP helping via a co-managed service.

Cloud integration ranked as another top trend as more clients look to the cloud for better storage design and implementation to increase productivity and collaboration. About 95% of MSPs surveyed found cloud solutions as a new market opportunity, although many have resisted moving to the cloud due to compliance, security, or budgetary concerns. Yet half of MSP respondents said they expect 75% of workloads to be in the public cloud in three years.

The top three managed security services currently offered are email security, followed by security framework and compliance auditing, and identity access management, according to the report. Several areas are expected to grow, with managed detection and response, dark web monitoring, compliance monitoring, and privileged access management taking the leading spots.

Channel Impact^®
Partners are worried about competition, revenue growth, profitability, customer acquisition and hiring, but the report also spotlights key areas where MSPs are seeing growth opportunities.