New Report from Kaseya Explores the Challenges and Opportunities for MSPs

Kaseya has released its third annual “Datto Global State of the MSP: Trends and Forecasts for 2024 Report,” reflecting high growth in the industry, but also increased competition.

“While MSPs have long been the unsung heroes of tech, this year’s survey results clearly speak to a growing understanding of the critical role technology plays in a sustainable business,” said Holly Pateman, Kaseya’s SVP of Product Marketing. “With revenues and competition on the rise, and a focus on the need for a superior customer experience, MSPs have a front row seat to what makes their customers successful. As a result, these MSPs have a clear view into what keeps a major cornerstone of our economy – small and midsize businesses – running.”

According to the report, the MSP industry has exploded over the last few years with major growth in 2023, despite a difficult economic climate. In North America, 68% of MSPs experienced a revenue increase, and among them, 38% saw their revenue grow by more than 10%. Likewise, the revenue increase was also significant in Europe. Nearly two-thirds (64%) of MSPs in Europe experienced year-over-year revenue growth, and among them, 37% of those experienced an increase of more than 10%.

At the same time, the survey notes heavy competition in this space. More than a third (35%) of MSPs globally cite competition as the biggest challenge, up from 29% last year. While seen as a challenge, MSPs are harnessing this competition to drive innovation and are offering solutions to better meet their clients’ needs, with 91% regarding customer experience as a high or top priority.

Among the key findings of the report, 74% of respondents said they prefer to use fewer vendors to meet their technology needs — up from 64% in 2022. Fewer vendors is seen to enable a streamlined supply chain, improving procurement, delivery, deployment, asset management and services. Top services that respondents anticipate adding to their portfolios include collaboration software (27%), business intelligence or analytics software (22%), and incident response and forensics (22%). Approximately half of the respondents report that 50% or more of their clients are shifting their workloads to the cloud. MSPs in North America anticipate the most significant shift in cloud migration in the next three years, driven by clients adopting Infrastructure as a Service (IaaS) and migrating databases and email servers to the cloud. Nearly half of the respondents (47%) predict that 75% to 99% of their client base will move workloads to the cloud in the next three years. On the cybersecurity front, 28% of respondents cited their customers’ lack of concern about cyber-risks as a major cybersecurity challenge.

The report is based on a survey of 1,575 MSPs worldwide, providing an in-depth look at the current state of the MSP market, demonstrating the critical role MSPs play in the overall success for small and mid-size businesses, as well as how the landscape has evolved and what the industry can expect in the coming year.

Channel Impact^®
The report underscores the importance of customer experience in a highly competitive market, and also reinforces the need for MSPs to be equipped with the tools and knowledge to educate their customers effectively – particularly in the cybersecurity space.