SolarWinds Survey Finds Market Strong, Opportunities Growing for MSPs

The market for managed services continues to grow and shows zero signs of slowing down, according to a survey by SolarWinds MSP. In fact, a whopping 97% of respondents claim they offer some form of managed services, an impressive number, and a clear indicator of the transformation the tech channel is undergoing. Further, the report cites that providers are embracing and bolstering their capabilities in such areas as cybersecurity and automation, which is a huge deal.

The IT management software vendor just released the findings in a report titled, “2019 Trends in Managed Services,” in conjunction with  The 2112 Group, which shows the health of managed services and the forces shaping the market across North America and Europe. 

SolarWinds MSP’s John Pagliuca

“It’s safe to say the state of managed services is strong,” said John Pagliuca, president of SolarWinds MSP. “This latest research also underscored the major growth opportunities we’re already looking to help our MSPs leverage, including automation, security, and operations. With our customer success-focused initiatives like MSP Pulse, the MSP Institute and Empower MSP, we’re supporting partners with much more than technology. We’re working to fuel the success of our MSPs in 2020 and beyond. The future looks bright for those who want to expand their comfort zone, and we’re here to help them do just that.”  

Here are some of the key findings of the survey:

MSPs are comfortable with the security basics such as antivirus, backup, and firewalls. In North America, respondents were most comfortable offering and using antivirus (89%), firewalls (83%), data backup and recovery (81%), and endpoint security (75%). In Europe, respondents were most comfortable offering and using antivirus (93%), data backup and recovery (82%), firewalls (82%), and antispam (80%) as solutions. 

Keeping the point above in mind, MSPs still have room for growth in some of the more advanced security solutions and offerings. Respondents were less confident in the more complex controls. European and North American respondents selected the same top three solutions they were least comfortable with: biometrics, cloud access security brokers (CASBs) and digital rights management. On the services end, European respondents were least comfortable with penetration testing (52%), auditing and compliance management (39%), and risk assessments (36%). North American respondents were least comfortable with auditing and compliance management (53%), penetration testing (47%) and security system architecture (39%). 

MSPs are steadily increasing the use of automation to handle day-to-day tasks such as patch management and backup, but don’t feel comfortable with automating the advanced tasks. Automation saves North American MSPs an average of 15.6 full-time employee hours per week and in Europe, an average of 23 full-time employee hours per week. In North America, respondents were least comfortable automating client onboarding (44%) with identity and access management in second place (38%). In Europe, respondents were least comfortable automating SQL query workflows (57%) but shared their discomfort with automating identity and access management with their North American counterparts. 

In the 2018 report, MSPs were losing customers almost as fast as they gained them, but 2019 showed an improvement in customer retention. Two of the top three reasons for losing customers stemmed from the customer rather than the service provider. In North America, respondents pick up an average of four clients every three months while losing one in the same period. In Europe, respondents pick up an average of three clients every two months while losing more than one on average in the same period. Top causes of customer loss included the company either went out of business (26% in North America and 16% in Europe) or were fired by the partner (25% in North America and 16% in Europe). 

Core business operations are still among the biggest growth obstacles for MSPs including lack of resources/time, sales, and marketing. North American MSPs claimed their biggest obstacles toward growth were sales (43%), lack of resources/time (42%) and marketing (26%). European MSPs claimed their biggest obstacles toward growth were lack of resources/time (41%), sales (32%), and security threats (32%).  

“This report gives MSPs an opportunity to see where the IT channel currently stands, where the opportunities are for growth and where they could improve as it pinpoints the crucial trends shaping the managed services market,” says Larry Walsh, CEO of The 2112 Group.