Top 10 Managed Services Provider Trends
Pardon me for dragging a bit today. I have a slight case of writer’s block after producing the MSPmentor 100 report. So instead of sharing “new” managed services content here, I’m offering a top 10 list taken directly from the MSPmentor 100 report. Here are the top 10 financial trends/observations from the MSPmentor 100 report…
MSPmentor 100: Top 10 Financial Trends and Metrics Worth Noting
1. Annual Managed Services Revenues: MSPmentor 100 companies generated a combined $799 million in managed services revenues for 2008, up 46% from 2007. The MSPmentor 100 companies easily outperform the broader managed services market, where spending is growing at a compound annual rate of eight percent, according to Insight Research.
2. Overall Company Growth: As a whole, the MSPmentor 100 companies lifted their top-line revenues (including non-managed services revenues) by 13 percent in 2008 vs. 2007. In other words, the vast majority of their growth involved managed services (as depicted in item 1 above).
3. Company Size: Of the 423 survey participants that generated at least $200,000 in annual managed services revenue:
- 165 had $1 million in annual recurring revenue
- 90 had over $2 million in annual recurring revenue
- 33 had $5 million or more in recurring revenue
4. Devices Managed: As a whole, the MSPmentor 100 companies were under contract to remotely manage 870,531 devices in 2008, up 146 percent from 354,029 devices in 2007.
5. Most Popular Managed Services Offered:
- Remote administration: 95%
- Help desk: 93.6%
- Managed security: 81.8%
- Managed storage: 66%
- Hosted/SaaS email: 57.9%
- Hardware as a service (HaaS): 53.2%
- VoIP/IP telephony: 43.7%
- Hosted/SaaS SharePoint: 29.3%
- Unified communications: 29.1%
- Managed print services: 28.4%
- Hosted/SaaS CRM: 18.4%
- Video surveillance: 17.3%
NOTE: What categories should we add for next year’s list? Let me know (joe [at] ninelivesmediainc.com) or post a comment below.
6. Network Operation Centers: More than 40 percent of participants depend on external network operation centers (NOCs):
- 58% of survey participants companies have their own NOCs
- 13% depend on NOCs from one or more partners
- 29% have their own NOC and depend on partner NOCs
7. Biggest Challenges: Survey Participants are struggling most with the following focus areas (multiple answers permitted):
- Vendor programs and vendor relationships, 48%
- Industry research and trends, 32%
- Sales and marketing efforts, 27%
- Operations such as NOCs and service level agreements, 9.5%
- Other, 8%
8. Looking for Help: Survey participants say they are most likely to outsource:
- their off-hour call centers (46%)
- followed by level-one resolutions/responses (20%)
- patch management and other routines (18%)
- hosting software (12%) to MSP software providers
- A rather large group of respondents (40%) said they would not outsource any portion of their business to an MSP software provider
Note: Multiple answers permitted above, so total exceeds 100%
9. Three’s Company: The typical MSPmentor 100 company uses more than three MSP-related tools (remote monitoring, professional services automation and hosted services, among others).
10. Emerging MSP Opportunities: Nearly 10 percent of survey participants already offer some type of high-end managed videoconferencing solution to their customers. And four percent of survey participants are embracing managed digital signage solutions.
As you review the list above and the complete MSPmentor 100 report, please send us constructive criticism and your thoughts on how we can improve next year’s effort.