The Doyle Report: 3 in 4 MSPs Still Offer Break-Fix Services to Customers, Datto Says
Like a lot of solution providers, IT3Pro offers a mix of technology services, including managed and break-fix services. Among other things, the Plano, Texas, company provides 24×7 network and server monitoring for an ongoing fee, and on-demand desktop, laptop and printer repair for a one-time fee.
Though partners have gradually shifted from break-fix services, three-quarters still offer for-fee break-fix services to their customers who ask for them. This is according to a new survey of some 2,300 MSPs polled by security, backup, and data and recovery specialist Datto.
Datto unveiled its study of the MSP market last week. It provides unique insights on the business of MSPs and the mindsets of their owners. Take the aforementioned finding about those who offer break-fix services. Given that a lot of MSPs are former VARs who have transitioned their operations, it’s not surprising to see so many partners still running their businesses with mixed revenue models. CompTIA’s 2016 Trends in Managed Services study, which is the trade association’s most recent study on MSPs, revealed that partners who offered managed services generate more than 40 percent of their revenue from “non-recurring” activities.
Datto’s newer study obviously sheds light on its own partners. But given that Datto has partners across a wide spectrum of the channel, its study covers a significant cross-section of the market. What jumps out from the new study? Plenty. The report includes insights on everything from who MSPs sell to, to how they conduct business, to what their biggest pain points are. (The study even has insights on how MSPs use social media and what they watch on TV.)
The business and demographical info jumps out most. Take the demographics of the typical MSP. According to the study, the average MSP is male, college-educated, and between the ages of 30 and 59.
“No major surprises there,” Datto says.
But there’s additional info worth taking a look at: More than 40 percent of the MSP channel is under the age of 40. Drill down deeper and you find that more than 10 percent is under 30. That’s good news.
One of the things that Datto looked at was the “business of managed services.” It found that most MSPs offer one-year contacts and serve fewer than 100 clients. While 47 percent of survey respondents said they generate less than $1 million in annual revenue, more than a third amass between $1 million and $5 million in annual sales, while 15 percent generate between $5 million and $50 million in annual revenue.
As for customers, more than half of MSPs target health care. Nearly half, meantime, sell to customers who work in financial services and manufacturing.
When it comes to pain points, the study lists several, including security, talent acquisition and growing pains such as operational efficiency, which is CompTIA’s next major study area. The No. 1 pain point for MSPs is marketing and sales. Partners still use a mix of lead-generation programs, cold calling and other methods to attract new customers.
**Editor’s Note: If you’re interested in learning more on this topic, please consider attending Channel Futures’ upcoming webinar on sales and marketing, “Prospecting for New Customers,” Tuesday, May 8, 2 p.m. ET. Full disclosure: It is underwritten by Datto.**
One last takeaway from the Datto report worth noting: Two of the top three publications MSPs turn to for insights and information on the channel are none other than Channel Futures and Channel Partners. Thanks for reading!