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.

Channel Impact^®
MSPs have become essential service providers, especially among SMBs. That is likely to continue as IT becomes increasingly important to this market segment.