5 Trends That Will Advance – and Challenge – the Channel in 2018

MSP leaders are not the type to sit back and let change happen to them.

Rob Rae

By Rob Rae, VP, Business Development, Datto

2017 has been a big year for MSPs. Global ransomware attacks of unprecedented magnitude and a record hurricane season tested the channel’s resilience — and our customers’ disaster preparedness. But don’t get comfortable, because the managed-services sector is evolving at an accelerated pace. With an 11 percent CAGR, the global MSP market is projected to hit the $245 billion mark by the end of 2022, according to a report by Market Research Future.

What’s ahead for channel partners in 2018? I’ll dive into some trends here that I believe will advance the future of the channel as we move toward the dawn of a new decade.

1. Maturation of the MSP Model

MSPs are becoming more sophisticated and are increasingly aiming to deliver enterprise-grade solutions that are also simple to use. Some MSPs will grow to become virtual CIOs serving small-to-midsize businesses. More than simply managing an SMB’s day-to-day IT operations, these providers will gain the opportunity to become active members of these customers’ organizations and contribute to their success by recommending the latest advancements in networking, BC/DR and SaaS protection technologies to support, in real-time, business needs and goals. But it’s not just MSPs that are maturing. Recent and sizable consolidation in the channel-focused supplier space, like my company Datto’s acquisition of Autotask last month, further validates the MSP model.

2. MSPs Go Global

The MSP model is validated in North America and Australia, and customers want global reach, as a recent Global Channel survey shows. But while the European market is well beyond the question of “is this a good idea?” the fact is, Europe is traditionally a bit more conservative than its counterparts when it comes to adopting new business models. This, together with region-specific challenges like Brexit, has Europe pacing at about half the adoption and consolidation rate of North America and Australia. However, the conversation is no longer around the value of the MSP model in Europe; instead, it’s focused on creating better efficiencies for MSPs.

Conversely, the Asian market is much quicker at adopting business models and technologies that have a proven track record. There’s rapidly growing interest in the MSP model in the region, and we are going to experience really quick levels of adoption that will make Asia the market with more growth in 2018. Overall, look for supplier partners that will maximize the value you can offer to customers, no matter where they do business.

3. The Ransomware Threat Continues

Technology is getting more complicated, which is bad news for SMBs relying on in-house IT teams. And cybersecurity leads the way in complexity: According to Datto’s 2017 State of the Channel Ransomware report, 97 percent of global MSPs reported in 2017 that ransomware is becoming more and more frequent, and 99 percent of respondents expect the frequency of attacks to continue to increase over the next two years. Massive, global ransomware outbreaks are going to become …