5 Reasons for MSPs to Enter the Small Business Market5 Reasons for MSPs to Enter the Small Business Market
The small business market can be a profitable space, especially for managed service providers (MSPs) that offer data backup and disaster recovery (BDR) and business continuity solutions. In fact, data BDR software company Datto recently provided five reasons why MSPs should enter the small business market immediately.
December 4, 2014
Managed service providers (MSPs) may offer data backup and disaster recovery (BDR) and business continuity solutions to enterprises and mid-sized companies, but what about small businesses?
The small business market might not seem worthwhile at first glance, but it can offer plenty of revenue opportunities for MSPs, especially if you take a closer look at this segment’s recent growth.
1. Connect with hundreds, thousands or even millions of prospects
The U.S. Small Business Administration (SBA) recently noted there are 23 million small businesses in America that account for 54 percent of all U.S. sales. SBA researchers also pointed out that the number of U.S. small businesses has increased 49 percent since 1982.
More small businesses have opened their doors over the past few decades, and MSPs that can show these companies the value of various BDR and business continuity solutions could boost their sales and extend their market reach.
2. SMB IT spending could exceed $681 billion by 2018
Small and medium-sized businesses (SMBs) have shown they are willing to spend on IT, and recent data indicated these businesses could devote additional resources to IT over the next few years.
International Data Corp (IDC) earlier this year predicted SMBs would spend more than $681 billion on IT by 2018. Service providers that enter the small business market now could get a jump on the competition and take advantage of the rapidly growing small business segment.
3. Small businesses will spend more on IT than larger companies
In addition to the fact that small businesses are willing to spend on IT, these companies also have shown that they often are willing to devote a larger percentage of their budgets to IT than corporations, enterprises and other larger companies.
Datto pointed out that small businesses on average commit 6.9 percent of their budgets to IT, while larger companies devote approximately 3.2 percent of their budgets to IT. If global IT spending continues to increase, businesses of all sizes could spend more money on IT and look to MSPs for BDR and business continuity solutions too.
4. Small businesses usually are early adopters of cloud-based apps
Small businesses want cloud-based apps, which could make them viable prospects for MSPs.
The most recent Spiceworks “State of SMB IT Report” revealed nearly 69 percent of small businesses are using cloud-based apps today, compared to 54 percent of medium-sized businesses. Service providers that reach out to small businesses could find prospects who are willing to listen, and ultimately, invest in BDR and business continuity solutions.
5. SMBs want business continuity solutions
Datto recently found business continuity solutions are becoming increasingly important to SMBs. The data BDR software company last year reported 56 percent of SMBs said they planned to replace their antiquated backup products with business continuity alternatives by 2018.
MSPs can capitalize on the rising demand for data BDR and business continuity solutions if they explain the benefits of their offerings to SMBs.
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