Study: MSP Revenue Growth Measured Amid Pandemic
Datto, Inc., a Connecticut-based provider of cloud-based software and technology solutions delivered through MSPs, has released its fourth annual Global State of the MSP Report, based on a survey of more than 1,800 MSPs around the globe.
Prior to the COVID-19 pandemic, MSPs were expected to grow by 17% according to the report. After the start of the pandemic, 40% of MSPs expect to reduce their growth projection by at least 10%.
“Along with identifying the specific behaviors of high-growth MSPs and the technologies MSPs rely on, we also wanted to understand how MSP priorities have shifted due to the pandemic,” said Rob Rae, senior vice president of business development, Datto. “While economic uncertainty is troubling for MSPs, it’s still a good time to be in the industry. Nearly 40% of MSPs reported annual revenue of $2.5M, demonstrating health and opportunity in the market.”
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%.
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.
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.
MSPs have become essential service providers, especially among SMBs. That is likely to continue as IT becomes increasingly important to this market segment.
Commvault and Microsoft Forge Joint Strategy for Data Management
Commvault, a New Jersey-based provider of data management software, has entered into a multi-year agreement with Microsoft that tightly integrates go-to-market functions, engineering, and sales of Commvault’s Metallic Software-as-a-Service (SaaS) data protection portfolio with Microsoft Azure.
“Today’s announcement combines two of the best enterprise cloud technologies to simplify and accelerate a customer’s journey to the cloud,” said Sanjay Mirchandani, President and CEO, Commvault. “This is a new era for Commvault and our direction is clear – help our joint channel partners and customers simplify IT with enterprise-class, proven data protection solutions delivered through SaaS and protected in the cloud.”
The collaboration builds upon Commvault’s longstanding use of Azure capabilities including application and data migration, long-term retention, and Azure Blob Storage for its scale, durability and security. The new agreement includes plans to build a SaaS offering of Metallic Cloud Storage on Azure Blob Storage and other deep product integrations with native Azure services.
As part of the agreement, Metallic will be a featured app for SaaS data protection in the Azure Marketplace for public cloud and hybrid IT customers. Commvault will also continue to support choice for customers who request alternative clouds based on business requirements. Metallic Backup & Recovery for Office 365 is now available on the Azure Marketplace.
The agreement promises to address the need for data protection backed by scale and multi-layered security in a hybrid world.
Tech Data Plans to Invest in Digital Transformation
With its acquisition by funds managed by affiliates of Apollo Global Management now complete, Tech Data announced plans to invest approximately $750 million in digital transformation initiatives over the next five years.
The investment is intended to help the Clearwater, Florida-based distributor’s partners will power Tech Data’s strategy to deliver state-of-the-art automation, platforms and analytics to support the needs of its partners. The plan includes building a hyper-scalable digital business platform and a cloud-based digital marketplace that are designed to serve emerging technology markets and consumption models.
“This investment over the next five years helps ensure the company has the resources necessary to launch a bold digital enablement and innovation program that will transform the way it serves channel partners and employees,” said Robert Kalsow-Ramos, Private Equity Partner at Apollo.
Tech Data’s acquisition by the Apollo funds represents a new era for the distributor at a time when distributors are constantly looking for new ways to add value to the offerings of their channel partners.