Datto, the business continuity and disaster recovery company – powering MSPs looking to evolve to monthly recurring revenue while better supporting customers, recently released a report which included a survey of more than 1,600 MSPs.
The findings are quite extraordinary.
“Almost 100% of channel thinks it is a good place to be right now,” said Mike DePalma, Channel Development Manager via a telephone interview. “I don’t know of any other industry where this is the case.”
He is likely right. Besides lawyers in Washington DC in the last 18 months, we can’t think of another group so optimistic about their future.
We predicted in 2017 the MSP future was bright and even we might have underestimated the opportunity.
Even better – according to Mike, the biggest pain point was sales and marketing – last year, 53% of respondents said it was a problem. Today, that number is down to 44%.
“It’s a really nice drop,” Mike exclaimed.
He went on to say Datto has been very active in putting resources in the hands of partners to address this pain point – referring to marketing materials, etc.
The biggest challenge for MSPs is finding qualified IT techs. Mike said he even heard a stat that there were 0.7 qualified techs for every opening – but take this with a grain of salt as neither of us could verify this number. We will be sure to update this post with attribution if it surfaces.
A Robert Half survey last year regarding a lack of tech workers in Research Triangle Park in North Carolina, found demand was highest in areas such as cloud security. And 93% of IT leaders told Robert Half that they are having trouble with recruiting. Thus 86% are looking to find skilled IT professionals and relocate them to the capital city area.
As of last July, there were more than 22,000 open information technology jobs in RTP, according to data compiled by the North Carolina Technology Association. That number grew from just over 18,000 in December – an increase of more than 20%.
Mike said as tough as it is to hire in the U.S., Europe is seeing even larger challenges.
Managed service providers typically generate monthly recurring revenue (MRR) – it is what makes them different from the value-added resellers. This fits with survey results which shows over 80% of MSPs report receiving some of their revenue from MRR. This year for the first time, more than half of MSPs derive the majority of their revenue from MRR. Another great sign that traditional resellers are adapting to the new reality of IT and telecom spending.
Most MSPs won’t be surprised to see that 51% responded that they wear multiple hats – handling technical and business responsibilities.
Perhaps part of the reason for optimism in the MSP market is 80% of them predict adding 1-10 clients in the next 12 months. This ties in nicely with lack of churn as just 6% of MSPs say this is a pain point.
MSPs who have a focus, lean towards lucrative service industries – healthcare, finance and legal top the list.
Other important takeaways – help desk is the most popular service at 87%, VoIP is at 60% and internet connectivity is at the bottom at 41%. Dell servers are the favorite, followed by HPE and Lenovo. VMware is the most popular virtualization solution at 44%.
The good news is companies are getting used to paying for things on a monthly basis thanks to streaming television, radio and corporate cloud services such as Salesforce. Cybersecurity is getting more complicated and needs the watchful eye of an experienced expert.
In all, great news… We are excited for the very bright MSP future.
Learn about the latest in everything MSPs need… UCaaS, the Channel, IT, IOT, Edge, Cybersecurity, AI, SD-WAN, and the Future of Work at the world’s only MSP Expo, part of the ITEXPO #TechSuperShow, Feb 12-14, 2020 Fort Lauderdale, FL.