MSPs are beefing up their service mix as the mainstream adoption of cloud computing and security concerns increase sales opportunities. That’s according to the eighth annual MSP Benchmark Survey by Kaseya, an Ireland-based provider of infrastructure management solutions for MSPs and IT organizations.
The survey says MSPs with MRR growth of at least 20 percent have stepped up their game in certain key areas, including hybrid/multi-cloud, security, and data backup.
The report shows an emphasis on scaling up cloud up services for targeted customer segments that match the MSP’s expertise and experience. Adherents of this strategy reported margin ranges almost double those of MSPs overall. In addition, successful MSPs are expanding their security offerings to include emerging capabilities such as real-time intrusion detection, multi-factor authentication, and third-party application updating. To assure effective DR and backup capabilities, 85 percent of the most successful MSPs reported use of products from multiple vendors, enabling them to make their own choices with respect to best-of-breed solutions. That statistic was measured at 78 percent across the broad range of respondents.
Infrastructure monitoring and management continues to be the fastest growing and most widely offered services among all MSPs, and are rapidly becoming table stakes in the MSP marketplace. The survey also found that while top MSPs continue to invest in these areas, they also recognize the opportunity to grow their service lines and maximize profit margins by furnishing customers with new solutions that fit a wider variety of budgets.
“This year’s survey shows that business demands are now more intense and less predictable,” said Jim Lippie, SVP of channel development at Kaseya. “This sets up an evolving MSP landscape in which the winners boost revenue through a broad menu of profitable new services and more efficiently run their own operations through increased automation and modern pricing structures.”
More than one-third of high-performing MSPs report fewer than 10 employees. These MSPs typically leverage automation to put time-consuming routine tasks on autopilot, thereby allowing them to service more endpoints per technician. The survey also suggests that cost-based pricing is fading as top MSPs recognize that focusing solely on cost always leaves the door open for a less-expensive vendor. Instead, they are moving to a pricing model based on the value of their services.
Survey data was gathered from both Kaseya and non-Kaseya customers in the fourth quarter of 2018 with responses from more than 800 MSPs of all sizes in over 40 countries.
The survey reveals the strategies used by a broad range of managed service providers to provide value to their customers.