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Fast Growing MSPs Offer More, Charge More

By Edward Gately
January 09, 2017 - News
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... more services across the board, from basic support to high-end network monitoring, according to the survey. In particular, high-growth MSPs are capitalizing on the boon of cloud adoption by offering a wider range of cloud-based service offerings. By offering comprehensive product suites, high-growth MSPs warrant premium prices for these services, leading to higher overall average sizes of their monthly managed-services contracts.

The divide between low-growth and high-growth MSPs appears to be increasing, Lopez said.

“MSPs, like many other businesses, need to continue to innovate and be entrepreneurial," he said. “The primary difference between high-growth MSPs and their lower-growth peers is their vision and ability to invest in their own business. For any MSP to succeed, [it] must have the financial and operational discipline to work in the new world where technology is not only seen as important, but strategic, in the eyes of SMB users. SMBs today are more knowledgeable about the importance of IT, and the threat of how poor IT affects their overall business. So a successful MSP must position itself to be opportunistic, and identify the right technology investments that will not only meet the needs of their customers, but also help them grow their business. That is the path toward achieving high-growth status."

Emerging service categories offered by high-growth MSPs include:

  • Network operations center (NOC): Nearly half (47 percent) of high-growth MSPs report they offer 24x7 NOC services, compared to only about one-quarter (27 percent) of lower-growth MSPs.
  • Backup and disaster recovery: Forty-three percent of high-growth MSPs offer cloud-to-cloud backup. Additionally, more than four in five (83 percent) of high-growth MSPs offer full backup and disaster recovery.
  • Security services: The largest delta in security service offerings is with two- or multi-factor authentication, which high-growth MSPs are 30 percent more likely to offer. Also, the mean number of security-related services offered by high-growth MSPs is eight — two more than their lower-growth counterparts. In addition, high-growth MSPs are nearly 40 percent more likely to offer all 10 security-related services than their lower-growth peers.
  • Network and infrastructure monitoring. High-growth MSPs offer each of the eight services more frequently than the lower-growth group. Deltas range from virtual parity for LAN/WAN monitoring to about 40 percent for all cloud-monitoring services combined.

Survey respondents chose meeting-security risks as the most important IT problem or service need their clients will face in 2017. Also, three listed concerns that touch upon different cloud issues. When added together, security and cloud tie as the top risk concern (31 percent versus 30 percent, respectively).

Most MSPs aren’t equipped to address their clients’ biggest concerns, Lopez said.

“Many had already started to make the leap over the last couple years into these areas, but too many have not," he said. “We already know customers are demanding services around security and cloud, and those that are not able to deliver will end up losing customers to those that are."

High-growth MSPs don’t just “check a box" when it comes to creating service offerings, according to Kaseya. Having a clear vision of what current and prospective clients need from their service-provider partners today and in the future allows MSPs to invest in the right technologies and align their business strategy for future growth, it said.

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