Managed service providers (MSPs) are jockeying for growth by focusing on business planning and expansion of technology offerings, a new report from distributor and solutions aggregator TD Synnex said.
The report supplements the company’s earlier 2023 Direction of Technology Report and zeroes in on the survey’s respondents self-identifying as MSPs.
While 65% of respondents noted business consulting and planning investments were imperative, 80% said that expanding their solution offerings was important or very important for growth.
"The MSPs we work with cite the critical need for strategic planning, business development, alongside training and enablement to leverage the opportunities presented by lucrative high-growth technologies,” said Sergio Farache, TD Synnex chief strategy officer. “With the current pace of change across the technology landscape, it is clear MSP respondents are focused on pulling the right levers to ensure their financial success. Our MSP Special Report was purpose built for MSPs to provide important insights that help inform and grow their businesses.”
The MSP data was collected as part of the second-annual Direction of Technology (DoT) Report, which surveyed channel partners, including resellers, systems integrators, service providers, and MSPs.
Respondents shared that networking (28%) and security (27%) were top revenue drivers over the past 12 months.
MSPs expect the top areas for growth will be Data Analytics (37%), Artificial Intelligence/Machine Learning (37%), and Augmented Reality/Virtual Reality (31%) overtaking both networking (30%) and security (27%).
Skills Gap, MSP Revenue, Regulatory Pressures Examined
Here are some findings from the MSP report:
On the skills gap.
- MSPs talent recruitment and retainment (46%) and ongoing technical education (33%) are among their top challenges, along with keeping up with the rapid technological change (45%).
- Not surprisingly, data analytics (33%), security (26%), networking (24%) and AI/ML (22%) are the top skills they are hiring for, in line with the solutions they anticipate driving the most revenue in the coming years.
On MSP revenue expectations.
- 75% of respondents expect revenue growth in 2023 and beyond. On average those self-selecting as an MSP derive 20% of revenue from the sale of managed services, compared to 15% in the overall channel.
- Three quarters of MSPs ranked as very important or important, growth through acquisition (73 %) or organically (77%). Less than half (47%) cited actively seeking a buyer as important.
- Approximately 70% of respondents say that global expansion (69%) and entry into new vertical markets (66%) are important or very important. This is in addition to the 80% who noted that expanding their solution offerings was important or very important.
On regulatory pressures.
- Approximately one-third of MSPs say that rapid regulatory change (36%) and meeting and documenting ESG standards (34%) are challenges to their business.
- While data protection (72%) and cybersecurity (54%) rank at the top of the list today, in two years’ time that changes dramatically with ESG (42%) ranking at the top of the list compared to data protection (35%) and cybersecurity (38%).
Jill Kermes, Synnex corporate vice president, global corporate communications and citizenship said that the study’s data “underscores the competing needs and priorities for MSP growth, as well as the challenges to that growth.”
The survey was conducted from May to July 2023 and captured feedback from more than 550 B2B channel partners from over 60 countries in global regions of North America, Europe, Latin America and the Caribbean (LAC), and Asia Pacific and Japan (APJ). Of those respondents, 227 self-identified MSPs participated in the survey.