Have 10 Percent of MSPs Closed Shop?

I need to make sure the following blog entry is in the proper context: Many managed service providers continue to grow and thrive. We'll be sharing some early data points from our ongoing MSPmentor 100 research over the next few days. But this little anecdote is important to note: A few folks allege that 10 percent of MSPs have disappeared or closed up shop in 2009. True?

I first heard that "10 percent" nugget down at the N-able Partner Summit (Oct. 14-16, Arizona). N-able CEO Gavin Garbutt was his usual optimistic self. But for one brief moment at the conference, Garbutt noted that the North American Managed Services market is fundamentally broken -- pointing out that the vast majority of small businesses had yet to benefit from managed services. Eager to overcome that inertia, N-able introduced a "freemium" strategy to help its partners broaden their customer bases.

There was also brief talk at the conference about 10 percent of MSPs disappearing or closing up shop in 2009. No need to press the panic button. There were 350 healthy MSPs at the event. And I suspect many defunct MSPs were resellers that briefly tested SaaS tools but didn't really have a managed services strategy in place.

Still, the chatter was a healthy reminder that a rising tide doesn't lift all boats. As Arlin Sorensen from HTG Peer Groups has mentioned to me a few times, the best VARs and MSPs over the long haul will have two things in common: Great sales and great marketing efforts.

Plenty of aspiring MSPs email me -- asking for guidance on which RMM or PSA tool(s) to use. When I reply back asking about their marketing, sales and business strategies the conversation often goes silent. I think those are the 10 percent of folks capsizing right now.

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