10 MSP Trends for 2018


As managed services continue to grow rapidly, MSPs have many issues to navigate while seeking to expand their capabilities and grow their customer bases.

According to ResearchandMarkets, the managed services market is expected to grow from a little more than $152 billion this year to nearly $258 billion by 2022. IT budget constraints for installation and implementation of required hardware and software, limited IT support to manage and support managed services, and the need for greater scalability are major factors that are likely to drive the adoption of cloud managed services in the coming years.

“The demand for managed services has never been higher, but service providers must keep an eye on emerging trends to avoid significant revenue drops caused by changes in the market,” said JD Helms, president of CloudJumper.

In the gallery below, SolarWinds MSP, CloudJumper and Kaseya provide 10 trends expected to impact MSPs next year.

Datapipe's Robb Allen

Trend: The cyber battlefield is moving from the enterprise to SMB.

In 2018, MSPs will have an opportunity to step up the protection they offer SMB clients and play a larger and more valuable role in their clients’ businesses, according to SolarWinds MSP.

“For many years, the enterprise has been a primary focus for the cyber adversary, but this is changing,” said Tim Brown, SolarWinds MSP’s vice president of security. “The enterprise still controls the money, the valuable information, the access and the data that the adversaries are looking for — but they are now a harder target. The easier target is the SMB who is the partner to the enterprise, or the SMB that controls sensitive data.”

TPx's Minner and Bowman

Trend: The rise of the “super MSP.”

“The MSP market used to be defined by local competition, made up of smaller niche firms — much like local competition with a mom-and-pop hardware store,” said Miguel Lopez, Kaseya’s senior vice president of MSPs. “In 2018, this market will get turned on its head as more super MSP powerhouses – the Lowes and Home Depots of the hardware-store world – set up shop in the North American market. This has already begun, but next year the impact of super MSPs will be even more acute. These super MSPs are the result of M&A activity among smaller players. The MSP market will see much consolidation in the coming year, leading to the rise of the super MSP.”

Customer Satisfaction

Trend: Cyber risk equals business risk

The correlation between business risk and cyber risk – and the importance of managing both – will become increasingly important for MSPs.

“MSPs have always played a role in helping their clients manage business risk,” Brown said. “This is now extending to cyber risk, and in 2018, there will be greater demand and need for MSPs to measure, quantify and help guide their customers to reduce both.”

Microsoft's Gavriella Schuster

Trend: Growth in cloud computing

Global spending on public cloud services and infrastructure is expected to reach $266 billion in 2021, according to IDC. The cloud computing market is expected to achieve a five-year compound annual growth rate (CAGR) of 21 percent and public-cloud services spending will reach $128 billion in 2017, an increase of 25.4 percent over 2016.

The meteoric rise of cloud computing is altering purchasing decisions and changing how solutions are delivered through the channel. This shift is presenting challenges and providing opportunities to MSPs, according to CloudJumper.

Gold Star

Trend: Migration from private to public cloud infrastructure

While private-cloud environments deliver a type of cloud computing that is similar to public clouds, they also require sophisticated virtualization, technical automation, resource monitoring and many other costly resources, CloudJumper said. With a public cloud, organizations do not have to purchase, install, operate or maintain servers or other equipment as they would with private clouds. As organizations seek to reduce their annual IT spend, public clouds offer a viable alternative.

WiC logo gallery size

Trend: The need for “cyber hygiene”

MSPs and their clients will need to make a greater investment in cyber hygiene and management in order to reduce cyber risk in 2018, according to SolarWinds MSP.

“A well-managed environment is a secure environment,” Brown said. “In fact, the majority of major cyber events have occurred because of bad cyber hygiene. In 2018, MSPs will be presented with a greater opportunity to address this issue within client environments — where systems and applications have not been patched, people have too much access and the attack aperture has not been limited, resulting in the risk of a small incident becoming a major breach.”

Champagne Toast

Trend: GDPR, other regulations increase pressure

MSPs will see an impact from regulations such as Europe’s General Data Protection Regulation (GDPR), which will drive stronger security and more attention to privacy in 2018 and beyond, SolarWinds MSP said.

“GDPR is not only affecting the European Union, but also the world,” Brown said. “GDPR does not prohibit the storage and usage of personal data, but mandates that personal data be appropriately secured and controlled. This and other regulations are driving better practices and more awareness of security and privacy.”

Sales Growth

Trend: The M&A effect

MSPs will continue to be impacted by increasing acquisitions related to the consolidation of tools they use to operate their businesses, CloudJumper said. A recent example of this is the acquisition of Datto by Autotask. However, MSPs can look forward to a rising number of acquisitions and mergers as key providers centralize important MSP-enablement solutions under an integrated solution set, the company said.

Sales Growth

Trend: Telcos, ISVs pose increasing threat

Continued movement down market by telcos and ISVs is expected in 2018, resulting in the erosion of MSP market share. Many telcos are actively trying to make use of their existing scale and IT savvy to move beyond basic voice and data services in order to begin selling a managed service.

Additionally, ISVs seeking to expand software availability, delivery and reach are augmenting revenue with service-based business units. With managed services proving to be a profitable line of business for telcos and ISVs, established MSPs can expect to feel revenue pressures in the year ahead and beyond, CloudJumper said.

SecurityFirst's Jim Varner

Trend: Changing security model to benefit MSPs

The lack of qualified security personnel, the level of service provided internally, the cost of service provided by security partners, and other factors are driving a “great deal of change” in how clients deal with security, Brown said.

In a recent SolarWinds MSP survey, 60 percent of enterprise and small-to medium-size enterprise respondents reported they are handling security internally – in whole or in part – but more than 80 percent of them are planning to switch to an outsourcing model in the next 12 months. Roughly half are switching because internal resources have proven too expensive, creating a key opportunity for cost-effective service providers.

One comment

  1. Avatar Michael Stichel November 14, 2018 @ 7:59 am

    have a guess where 7 out of 10 servers will be located in near future 😉

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