Managed Services: Top Trends Impacting MSPs in 2023

NERDIOCON — The managed services industry is experiencing a golden age, according to Datto.

Datto’s Greg Jones

“There are still challenges out there. But overall, this is a great time to be an MSP,” said Greg Jones, vice president, business development, EMEA, at Datto. “There’s a lot of opportunity, and we look at this time as a golden age for the MSP community.’

Indeed, more than nine out of 10 MSPs believe it is a great time to be in the industry, according to Datto’s Global State Of The MSP Report. Execs from Datto, a Kaseya company, were talking MSP trends at NerdioCon 2023 in Cancun, Mexico, Thursday. Channel Futures is there.

In terms of riding out the current economic turbulence, Jones said MSPs are better placed than most.

“Arguably, wherever economic downturn or recession, more money than average is spent on technology to accelerate businesses through this recession. And when we look back at previous recessions, IT has always been one of the strongest sectors to really weather a storm.”

However, vendors need to step up more to help new MSPs build their businesses, said Jones.

Vendors Need to Improve Support For MSPs

Jones said EMEA is around three years behind North America in terms of MSP maturity — but it is catching up.

At the same time, there are lots of new market entrants. Almost a quarter of MSPs surveyed said they are new to the business. This makes sense, given 95% of respondents agree it is a great time to be an MSP.

However, vendors need to do a better job in helping these firms develop their MSP practices, said Jones.

“There are a lot of new vendors that are just adding in a MSP track to their offering. It’s needed for MSPs to help them to go to market, but it can’t be an afterthought. Vendors need to really hunker down on the MSP. To help them in all aspects of the business — not only the tools and the technology, because arguably, that should be the last piece of the jigsaw. It should be more about helping them with going to market, sales and marketing strategy, content, business advice and really helping them on their business operational maturity level.”

Welcoming New Players to The Market

COVID had a massive impact on the MSP market, said Jones. As a result, it is now accommodating a lot of players that have seen its revenue potential.

“A lot of other industries lost lots of revenue and needed to recoup that and protect it for the future,” he said. “So, everybody is looking to lock in recurring revenue. If you look at most [private equity] and [venture capital] money, all they’re interested in is following the monthly recurring revenue.

“So even the likes of say big print firms – the likes of Kyocera, Konica Minolta, Brother – all lost the pay-per-click because people weren’t in offices. That services revenue. They said, ‘Actually, we need to …