MSP501: Early Results Show Gap Divides ‘Haves and Have-Nots’
T.C. Doyle of MSPmentor, and Jim Lippie of Clarity Channel Advisors – Penton’s partner on the this year’s MSP501 list and survey – discussed the highlights during a live broadcast from the Ingram Micro 2016 Cloud Summit in Phoenix.
The results, so far, reveal a stark bifurcation among managed service providers (MSPs), with many experiencing stellar growth and numerous others exhibiting equally dramatic revenue losses.
“We’re seeing the haves and have-nots,” Lippie said. “The stronger companies are getting stronger and the weaker companies are getting weaker.”
He offered the example of one MSP that tallied 24 percent growth year over year, with a strategy centered on robust offerings of cloud services, emphasis on relationships with line of business buyers and an increase in net new customers.
On the other side of the spectrum, Lippie cited a company that relied heavily on hardware sales and other non-recurring revenue. That firm saw revenue fall 22 percent, year over year.
“The time is running out in terms of that business model,” Lippie said, adding later that: “ Companies just need to work harder and faster to make this transition.”
Doyle cautioned against predicting the death of the reseller model too soon, saying the halls at Cloud Summit were filled with examples of firms that were bucking the conventional wisdom and driving revenue in seemingly counterintuitive ways.
The common thread: Most are extremely well run companies, he said.
“Their operational excellence is off the charts,” Doyle said. “They are running these very efficient machines.”
This year’s MSP501 ranking has been revamped to improve the quality and voracity of the results.
Lippie’s firm authored a new algorithm aimed at generating a more precise analysis of which firms are truly excelling. For the first time, that algorithm will be made public after the results are released, providing unprecedented transparency into how MSPs are ranked.
Another first this year is a requirement that revenue figures be verified instead of just self-reported, by either having an accountant sign off, or submitting documentation directly through Clarity Channel Advisors’ Clarity Intelligence Platform.
Financials of individual companies are kept confidential and will not be disclosed.
An initial preview conducted last month found that the annual revenue range for MSPs that submitted as of the first week and a half of March was between $400,000 and $180 million.
That early analysis also found that average recurring revenue was up 8 percent year over year, and that nearly 80 percent of those MSPs added full-time employees in 2015.
There’s still time to fill out the 2016 MSP501 survey submission form and take a crack at being recognized as one of the world’s top managed service providers.
The submission deadline was extended to April 22, with definitive findings scheduled for release in May.
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