MSP market is strong

The managed service provider (MSP) market is strong and in a position to take advantage of myriad growth opportunities, according to SolarWinds research.

The firm has shared the findings of its 2019 Trends in managed services report, which looks at what is happening in the US and Europe.

The report quoted figures from Mordor Intelligence, which forecast that global managed services spending will climb from $173 billion last year to more than $296 billion by 2023. That translates into an estimated compound annual growth rate of more than over 11 percent, which is higher than pretty much the rest of the IT market.SolarWinds president John Pagliuca said: “Our research has revealed that 97 percent of respondents offer some form of managed services, which is a clear demonstration of the managed services transformation remaking the technology channel. It’s safe to say the state of managed services is strong. This latest research also underscores the major growth opportunities we’re already looking to help our MSPs leverage, including automation, security and operations.”

European MSPs picked up an average of three clients every two months but lost more than one in the same period. The top causes for losing a contract were that the company either went out of business or was fired by the partner.

Although security is clearly one of the top concerns for customers and a major requirement from any MSP, there still appears to be some way for the European channel to go before players become fully confident in supplying certain services.

SolarWinds found that European respondents were least comfortable with providing biometrics, cloud access security brokers and digital rights management. Beyond that, there was also resistance to penetration testing, auditing and compliance management, and risk assessments.

Although there is growth in the market, not everyone felt they were in a position to exploit it, with European partners listing a lack of resources and time, sales and security threats as the biggest obstacles they faced.

The report concluded with a confirmation that managed services remains one of the strongest growing parts of the channel, but cautioned about the need for further evolution.

“Managed services customers will continue to demand more of their partners”, it stated. “The best of the best MSPs will be rewarded for infusing their practices with a greater number of high-touch, high-value services that do more than cover the IT basics. The long-term strategy for successful MSPs must include complex offerings purpose-built to address clients’ business problems and goals, solutions such as IoT [internet of things] infrastructure services, cloud-based big data and business analytics, and business process outsourcing.”