Kaseya’s 2019 MSP Benchmark Survey revealed that the highest performing MSPs are proactively beefing up their services as the mainstream adoption of cloud computing and security concerns increase opportunities for higher-margin ways to deliver infrastructure
The eighth annual survey highlighted a number of key industry trends including the need to manage hybrid and multi-cloud environments, heightened attention to security and the requirement for data back-up and protection in a data-driven world – present a combination of crucial challenges for MSPs. The survey showed that top MSPs those that reported an average annual monthly recurring revenue (MRR) growth over 20 per cent – have stepped up their game in these areas to stay ahead of competitors.
In cloud, they’re scaling up services for customer segments that match their expertise and experience and as a result, enjoy a margin range almost double that of MSPs overall. As infrastructures become more intricate and difficult to secure, these MSPs have expanded beyond predictable, standard offerings and deliver emerging services in real-time intrusion detection, two- or multi-factor authentication, third-party application updating and other areas. To assure robust disaster recovery and back-up capabilities, 85% of the most successful MSPs use more than one back-up provider to support customers’ needs, compared with 78% of all respondents.
Infrastructure monitoring and management continues to be the fastest growing and most widely offered services among all MSPs and are a minimum for entry in today’s MSP marketplace. The survey found that while top MSPs continue to invest in these areas, they also recognise the opportunity to grow their service lines and maximise profit margins by furnishing customers with new solutions that fit any budget.
Most MSPs struggle with prioritising between RMM and PSA. Top MSPs, however, know that blindly installing either of these tools is no guarantee of success. Each may be a precursor to the other, but their ability to integrate together is easily the single most important feature of any PSA or RMM solution. Eighty per cent of high performing MSPs considered integration to be exceptionally important, compared with 69 per cent of all respondents.
Other key findings include:
Cloud continues to change everything. As more of their customers migrate their IT infrastructure to the cloud, high-performing MSPs embrace cloud integration, migration implementation and management. Seventy one per cent of top MSPs host some part of their clients’ infrastructure in a private cloud environment, compared with 59% of all respondents.
Back-up is seeing changes. Ransomware and malware are far too common. Meanwhile, big data, the Internet of Things and artificial intelligence are driving businesses to be increasingly data-driven. Vigorous back-up and disaster recovery (BDR) capabilities are a must and high-growth MSPs are beefing up their BDR tools to make sure customers are protected.
Cost-based pricing is fading. Top MSPs recognise that focusing solely on cost always leaves the door open for a less expensive vendor. Instead, they are concentrating on the value their services bring to clients. Twenty-two per cent of these MSPs earned more than half their revenue from a value-priced model, compared with 16% that earned it from a cost-based model.
Bigger doesn’t mean better. More than a third of high-performing MSPs have fewer than ten employees. Rather than increasing headcount, these MSPs leverage the full power of automation to put time-consuming, rote tasks on autopilot. This allows them to manage thousands of endpoints per technician versus a few hundred without automation, as well as deliver high-value added services to their customers.
“Kaseya’s annual survey of MSPs worldwide reveals the strategies that these firms rely on to provide the most value to customers and stay ahead of the competition in a crowded marketplace,” said Jim Lippie, SVP of channel development at Kaseya. “This year’s survey shows that business demands are now more intense and less predictable. This sets up an evolving MSP landscape in which the winners boost revenue through a broad menu of profitable new services and more efficiently run their own operations through increased automation and modern pricing structures.”