MSPs expect high growth but they ‘fear’ the cloud

Managed service providers have “expectations of high revenue growth” over the next two years,
but their optimism is countered by “continuing worries” about cloud computing solutions and staff retention.

CompTIA surveyed 400 managed services providers (MSPs) in the US, and we can only presume their revenue confidence matched by the above concerns is similar here in the UK [if not, tell us].

“The level of confidence among MSPs in how they are running their businesses is quite high,” said Carolyn April, senior director, industry analysis, CompTIA. “Two-thirds of the companies we surveyed consider themselves to be skilled experts at managed services.”

Some of this confidence is due to “market maturity”, said CompTIA. Nearly 90 percent of companies have been offering technology services for two years or more.

And three in ten companies say their services business was their leading revenue generator over the past year. Half of all MSPs surveyed expect high revenue growth over the next two years, with services accounting for 75 percent or more of total revenue.

Topping the list of things that keep MSPs awake at night is cloud computing, cited by 62 percent of companies.

Kris Nagamootoo, senior manager at CompTIA, said: “They still haven’t figured out whether the cloud is a good thing or a bad thing, they fear that customers will simply bypass them and look to cloud providers for their basic needs.”

Just 54 percent of MSPs offer cloud-based solutions and services as a strategic part of their business. Another 44 percent only support cloud services when requested by a customer.

Nagamootoo said many companies are “missing out” on big opportunities to be “cloud orchestrators” for their customers.

“Just as they remotely manage on premise devices and applications, they can manage what a customer has in the cloud,” he said. “It’s a natural spot for an MSP.”

MSPs must also act to stem the persistent problem of employee churn. A majority of firms say in the past year they’ve lost at least one staff technician to an end-user organisation’s IT staff.

“Employees who leave are usually seeking more stable hours, better pay or a job that’s more challenging than simply monitoring and waiting for an alarm bell to go off,” April said. “It’s a problem that MSPs will have to address.”

CompTIA’s Fifth Annual Trends in Managed Services report is based on a survey of 400 US MSPs

@AntonySavvas