IT Glue Global MSP Benchmark Survey Reveals Compelling Pandemic Impact

The survey shows fear of a second lockdown, revenue and M&A interest slips amid uncertainty heading into H2 2020.

Allison Francis

June 17, 2020

5 Min Read
Young woman looks at word Survey on desktop computer.

IT Glue, a Kaseya company, just released its 2020 Global MSP Benchmark Survey studying trends in the IT industry and among managed service providers.

This is a particularly interesting time to release such a study, given the particularly interesting state of things. The report reflects not only a snapshot of the world immediately prior to the pandemic, but a view into how it has changed in the past couple of months, as it includes data from both IT Glue’s February and May surveys. 

The report is composed of two surveys: one conducted prior to COVID-19 and another during. These two ends of the spectrum offer some intriguing insights into the reasons behind rapid growth in the MSP market, given the uncertain state of things.

The Data

This year’s report contains detailed data from over 1,500 MSP firms of all sizes, spread across more than 32 countries. The findings show the biggest trends impacting MSPs today including:

  • Three in four (74%) MSPs fear another coronavirus lockdown in the fall, which is no surprise considering that half saw their monthly revenue decrease as the result of the first shutdown.

  • The pandemic has marked the most profound shift in M&A sentiment among MSPs. Nearly half (48%) said they were not interested in acquiring or merging with another MSP before the pandemic. But that number has jumped to 63% of MSPs not interested in mergers today. 

  • MSPs with a vertical focus (security, government, etc.) were slightly more likely (79%) to increase revenue than those without (75%). 


IT Glue’s Nadir Merchant

“The pandemic has created an unprecedented landscape for all businesses,” said Nadir Merchant, general manager of IT Glue. “Our initial Global MSP Benchmark survey in February provided an overview of sentiment among MSP professionals, but once the world changed almost overnight, MSPs needed data-driven guidance on how to adapt.”

The new survey highlights both “pre-coronavirus trends that continue to persist today and opportunities for MSPs to grow during and after this pandemic,” he said.

Our Survey Findings

Our Back in April, Channel Partners and Channel Futures launched our own COVID-19 survey, “Channel in Crisis: How Partners are Navigating COVID-19.” The survey looked at the impact of COVID-19 and examines other factors such as:

  • Trends by company size and location, including if business has picked up or slowed down.

  • The status of cloud migrations among customers.

  • The impact of shadow IT.

  • Security

  • Projected revenue streams.

Our survey turned up a few interesting tidbits, including:

  • More than two in five (43%) respondents said that 1-25% of their customers have put managed services work on hold or reduced managed services spend.

  • Almost half (46%) said that 1-25% of their clients have paused or canceled project work.

  • More than half (53%) said that 1-25% of  customers had requested cloud migrations in the beginning weeks of the pandemic.

Thousands of businesses have had to re-evaluate 2020 budget forecasts, and employers have had to make hard decisions about how much of their own workforce they can continue to support at pre-COVID levels.

The range of responses from partners is telling of a world that has shifted to a remote and new norm.

Key Benchmark Survey Takeaways for MSPs

IT Glue’s February survey results highlight three key takeaways for MSPs as they …

… continue to navigate through unpredictable times.

1. A resilient workforce. While the economy is far more uncertain now than before the pandemic, MSPs’ turnover has historically been much less than the national average for IT. According to the Bureau of Labor Statistics, the pre-COVID turnover rate for IT was 43.2%. Respondents to IT Glue’s February 2020 survey, however, saw an average turnover of 14%. This is a good omen for MSPs as talent acquisition. As our sister survey, the Kaseya MSP Benchmark Survey, showed, nearly 70% of respondents said that integration between their core IT applications (RMM, PSA and IT documentation) is critical, which makes the case for investing in a unified solution set a key component to technician user satisfaction, and ultimately technician retention.

2. Strategic customer retention. Although a similar percentage of MSPs reported a high rate of churn this year as in IT Glue’s 2019 survey (~10%), fewer of those respondents suffered revenue declines as a result. This indicates a number of possible scenarios: 1) these MSPs immediately onboarded new customers when others ended their contracts; 2) the cost of acquisition for new clients decreased; 3) MSPs strategically removed customers that weren’t as valuable to begin with.

Regardless, more than one in three (36%) respondents to IT Glue’s May 2020 survey indicated that customer churn is a high concern. This data reinforces the continual imperative for MSPs to demonstrate the value and credibility of the managed services model.

3. Diversified verticals. In 2020, MSPs that focused on a specific industry experienced slightly higher revenue than more general MSPs (79% vs. 75%). MSPs that targeted the following four industries in particular were more likely to report profits of 20% or more: legal (43%), government (40%), finance (39%) and professional services (38%). While specialization can be a boon for MSPs, be wary of placing all your eggs into one basket. MSPs that specialized in retail and hospitality were especially hard hit during the pandemic.

About the Author(s)

Allison Francis

Allison Francis is a writer, public relations and marketing communications professional with experience working with clients in industries such as business technology, telecommunications, health care, education, the trade show and meetings industry, travel/tourism, hospitality, consumer packaged goods and food/beverage. She specializes in working with B2B technology companies involved in hyperconverged infrastructure, managed IT services, business process outsourcing, cloud management and customer experience technologies. Allison holds a bachelor’s degree in public relations and marketing from Drake University. An Iowa native, she resides in Denver, Colorado.

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