8 Key Takeaways from Datto’s State of the MSP Report

For its report of the state of the MSP, Datto surveyed more than 1,800 managed service providers worldwide to deliver insights into their everyday lives, trends in the IT Channel, emerging opportunities and so much more. The result: a wealth of data and insights on topics that range from how MSPs run their businesses, what solutions they plan to offer and what is driving growth in today’s challenging environment.

We conducted our initial state of the MSP research before the COVID-19 pandemic shook the economy worldwide. To better reflect the current mindset of MSPs, we conducted a second, shorter survey to find out if and how MSP priorities have shifted. You will find information from this second round of research peppered throughout the full report, which can be downloaded here.

Below are just a few key highlights from the state of the MSP report (which reflects both the pre- and post-COVID surveys) that we hope you will find valuable.

1. High growth MSPs shared two key attributes and activities: generating a higher portion of revenue from managed services (that is, services that generate a recurring revenue) and setting specific growth goals.
2. 39% of MSPs have been in business for over 16 years. However, there is a solid crop of newcomers, as well. 18% have been in business less than five years. 84% said that now is a good time to be an MSP.
3. 24% of MSPs report their businesses raise between $1M to $2.49M in annual revenue. More than half of MSPs said over 50% of their revenue came from recurring services.
4. On average, MSPs have 122 clients. However, 69% of MSPs have fewer than 100 clients. 50% of MSPs have an average annual contract of less than $15,000 annually, and 89% said that the majority of their clients are micro or small businesses.
5. 22% of MSPs said that during the past three years their total revenue per year grew by up to 5%, and 24% reported growth of up to 10%. 19% of respondents saw growth of up to 20% per year. 12% remained the same, and only 3% saw declining revenues per year.
6. Economic uncertainty was troubling for MSPs in the aftermath of COVID-19. Cybersecurity for clients was another top pain point for MSPs, followed by work/life balance.
7. 61% of MSPs consider antivirus the most critical security solution for SMBs, followed by advanced firewalls and RMM.
8. MSPs believe that COVID-19 will accelerate cloud migration projects for many clients.

MSPs are not just the core of the IT channel and Datto’s business, but essential service providers for millions of small and midsize businesses. We hope that this state of the MSP report sheds light on how MSPs can overcome challenges and grow their businesses in the face of a new SMB landscape. Download and review the full report today.

Rob Rae is Senior Vice President of Business Development.

This guest blog is part of a Channel Futures sponsorship.