From BYOD workplaces and IoT to accelerating applications of AI, machine learning and cloud-based platforms, the technology landscape is changing faster than ever. Growing MSPs recognize that change means opportunity.

Datto Guest Blogger

August 22, 2019

3 Min Read
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The demand for managed service providers (MSPs) to evolve quickly with channel trends and needs continues to increase. From “bring your own device” workplaces and the internet of things, to accelerating applications of artificial intelligence (AI), machine learning and cloud-based platforms, the technology landscape is changing faster than ever.

Growing MSPs recognize that change means opportunity. Datto’s proprietary research combined with analysis of market trends reveal the top five moves of high-growth MSPs.

  1. Adapt to changing client demands: Today’s MSPs’ client relationships are the No.1 growth driver. In our 2018 MSP Metrics that Matter survey, more than 68% of MSPs with rising client renewal rates cite client relationships as the main reason–more than any other factor.

It’s no longer enough to fix what’s broken. MSPs need to be more proactive and:

  • Adopt a more advisory and consultative role

  • Deliver on service-level agreements (SLAs)

  • Maintain high client satisfaction rates

Datto’s research also shows that MSPs have room to grow in these three areas. For example, just 31% of MSP respondents measure client satisfaction regularly, and only 21% report measuring overall SLA performance.

  1. Specialize, but remain aware of universal concerns: As industry-specific technology becomes more prevalent, MSPs need to understand the sectors in which they’re working to properly advise clients of the best options for their businesses. CompTIA’s 2018 “7th State of the Channel” report found that nearly two-thirds of the channel firms began specializing vertically to satisfy client demand and that embracing an industry niche has been a competitive advantage.

At the same time, there are common concerns across industries. When asked to share the top trends impacting client priorities, 47% of MSPs surveyed said data security was a top concern. MSPs must be equipped to provide services and solutions that allow clients to mitigate threats and comply with new data security requirements. They also must be aware of new threats and support clients as they strive to ward off attacks.

  1. Add new revenue streams: As more platforms and devices integrate AI and machine learning, expertise in these technologies is quickly going to become a differentiator when clients are choosing an MSP. The CompTIA report also suggests that working closely with these technologies may lead MSPs to develop their own intellectual property, further differentiating them from the competition.

This is a nascent area for many MSPs. Our research found that most MSPs surveyed have no plans to sell next-generation devices. However, among those that do or plan to start this year, managed power, video monitoring and digital signage were the most popular options. Devices are an enormous area for new revenue.

  1. Focus relentlessly on efficiency: While the importance of relationships is hard to overstate, savvy MSPs also need to devote resources to strengthen operations. Our research shows that one in three growing MSPs said that improving service desk processes, performance and automation efficiency contributed to their increasing client renewal rates, and more than one in four (29%) reported that improving service technician performance contributed to growth.

This data highlights the importance of measuring performance internally and looking for opportunities to improve. Slightly more than one-third (35%) of all MSPs measure billable resource utilization. Adopting more internal efficiency measures and improving processes to avoid downtime can spur both growth and profitability.

  1. Have a plan to scale: As you strengthen relationships and provide more services and products, you need to know how you will manage growth while maintaining relationships. Scaling provides enormous opportunities for inefficiency creep. As growing MSPs add new services, products and people, keeping a focus on waste-free operations is essential to maximize profits. Adopt automation, optimize service technician time and performance, improve help desk performance, and apply best practices around efficiency on a regular basis to stem inefficiency losses as you grow and maximize productivity.

Check out Datto’s latest State of the MSP report for more information on the latest channel trends and data.

Rob Rae is VP of Business Development, Datto.

 This guest blog is part of a Channel Futures sponsorship.

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