Data Protection and Security Ranked Among Top Five Managed Services by MSPs in Enterprise Strategy Group Report
The report, titled, “MSP Partner Landscape 2020” details the best practices and actions leading partners take to unlock MSP success. Also included is how the top vendors serving MSPs structure their offerings, programs, and support in order to help partners succeed. Finally, the report looks at what is driving partner transformation and revenues in the MSP space, shifting customer preference/consumption patterns, ongoing business viability, and service focus areas.
“Partner-led managed services are here to stay as the industry continues its shift toward subscription products,” said author of the report, Kevin Rhone, Senior Analyst at ESG. “As detailed in this research, 86% of MSPs believe cloud-based managed services represent a fundamental change in how their business customers are consuming IT solutions.”
The managed services space was forecast by ESG to grow 11.5% CAGR from 2019 through 2024, and to reach $US319B by that year. Forward-looking tech vendors recognize that leading partners have a new set of priorities and challenges when serving customers while maintaining profitability in the transformed world of IT.[1]
Key findings that are summarized in the report include:
– The top five security related managed services as ranked by MSPs nationally:
1. Endpoint protection
2. Network security
3. Data protection
4. Cloud security
5. Authentication
– In terms of the biggest internal challenges for MSPs when selling cloud-based managed services for service providers with more than 10 employees are determining the right pricing levels for different managed services (31%); poor margins on cloud-based managed services (21%); developing and executing successful marketing campaigns (29%); recruiting technical staff with cloud-oriented skills (28%), and customer billing logistics (22%).
– The biggest external challenges for larger MSPs surrounding the delivery of cloud-based managed services are the resistance of customers to cloud-based managed services (21%); lack of pricing/margin control (27%); competition from other vendors or service providers (18%), and the lack of a centralized portal to managed services from different vendors (24%) and difficulties with getting the right training and enablement from service providers or vendors (21%).
– Organizational attributes for large MSPs that have the most positive impact on the organization’s profitability include technical support (37%); solutions that fit with the rest of the MSP’s business (34%); fair and competitive vendor pricing (28%); ability to control pricing and margin levels (30%), and the vendor’s web-based partner portal, making it easier to do business.
In addition to building the most profit-optimized subscription-based solutions portfolio, selecting the highest value solution delivery model is especially important. For example, a common cloud brokerage model can place a drain on profits, channel healthy models provide complete control over pricing and margins, limit client communications to the MSPs and ensure greater control over the value of the MSP’s business to ensure strong recurring revenue and greater long-term valuation.
“The report provides important takeaways for both MSPs and the vendors that support them,” said Eran Farajun, EVP, Asigra. “With respect to organizations in the cybersecurity-enabled data protection space, it shows that this segment remains in high demand and in widespread use by MSPs. On the business front, it emphasizes the need for vendors and MSPs to ensure that efficiencies and the enablement of business value are built into the operator’s business.”
