North American SMBs: Falling for Managed Services?

Here's an interesting business and technology paradox: AMI Partners, a research firm, says North American SMBs will increase their spending on remote managed services at a compound annual growth rate of 28 percent for the next five years. Sounds awesome. But if things are so good why are some MSP software providers suggesting that portions of the managed services market have somewhat stalled?

Let's start with the apparent good news: North American SMBs will increase their remote managed IT services spending 3.3 times over the next five years, AMI Partners asserts.

According to Anil Miglani, SVP of IT Infrastructure and Managed Services at AMI: “Of the total installed base of 60 million PCs and 8 million servers in North America, only a tiny fraction is currently managed remotely, offering tremendous growth opportunities for managed service providers."

That sounds fantastic. And AMI Partners is right: MSPs are only monitoring a small fraction of SMB systems.

Now the problem: Whether you speak to  Ingram Micro Seismic or N-able or a range of other vendors, those sources say many MSPs haven't figured out how to push beyond their initial SMB customer base.

To accelerate growth many MSP industry players are launching "freemium" initiatives. A few examples:

MSPmentor's key point: Be careful as research firms continue to hype managed services market growth. The best MSPs continue to grow and do well. But many MSPs are victims of circumstances they can't control -- such as being headquartered in Detroit, where IT spending has stalled with the auto industry.

Will the North American managed services market really triple in size over the next five years? If true, that's wonderful news for all of us. But I think most MSPs are cautiously optimistic rather than wildly bullish.

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