Channel Futures Quarterly MSP Survey: Uptick in Recurring Revenue, Strong Cloud Sales
… data analytics (17%); data center (14%); and IaaS, managed email and help desk (all 12%).
“You see vendors for risk management products and services being added first and foremost,” said Ingalls. “Cybersecurity risk is increasing and the market is responding. Hopefully the respondents are picking security partners rather than buying security software, unless they have dedicated (and rare) talent necessary to staff that software.”
“We have seen a recent “relatively high” increase in the publicity of cybersecurity events,” said Ichelson. “This in correlation is driving the reactive response to organizations trying to mitigate their cyber exposure. This is why we are seeing a decline from 2020 where we saw a major increase in work-from-home (WFH) technology. I also see that this plays into the security and BC/DR conversation with a borderless perimeter and more diverse device landscape. We see a direct tie to the exposure organizations face.”
Cloud-Related Sales
We know that Microsoft, Google and AWS had a strong first quarter in terms of cloud-related sales. In mapping this to the channel, it seems that providers had a strong showing as well. When we asked how cloud-related sales in the first quarter compared to the first quarter of 2020, 31% of respondents said sales were up at least 10%. More than one in four (28%) reported no change, which indicates they are holding steady.
There is a portion of providers struggling with cloud sales. Hearkening back to the aforementioned public cloud vendors, the reason could simply be that they are able to offer cheaper solutions. Positioning value and service while competing with these companies is indeed a challenge.
“When we look at the impact of cloud adoption from 2020-2021, we should see an increase across the board. WFH, COVID-19 impact, adoption of cloud technology around collaboration and extending the business out are driving major cloud adoption,” said Ichelson. “No longer can organizations solely rely on an on-premises/legacy approach to technology.”
Security Solution Sales
When we asked how security sales in 2021’s first quarter compared to 2020’s, 14% of respondents reported an increase of more than 20%. Thirteen percent reported an increase of 11%-20%; one in four (28%) said 1%-10%; and a whopping 33% said their sales remain relatively unchanged.
“This is most interesting, as it indicates that not much has changed in the security sales space from a year ago,” said Ingalls. “I wonder if this indicates some stagnation in the distribution of security products or services, lack of innovation and new available products/SKUs, and/or lack of interest from customers. Worst case, it indicates that MSPs are unable to make a compelling case to their clients of the need for enhanced cybersecurity products. And after a year like the one we’ve had (SolarWinds, HALFNIUM, Colonial Pipeline), you’d think a security conversation between MSPs and their clients would be easier than a year ago.”
“While I have not seen a breakout in security-related spending, we are seeing a large expression of pent-up demand for hardware both on premises and for outfitting remote workers,” said Joshua Liberman, president, Net Sciences. “Sadly, this is commensurate with the greatest shortages of equipment our industry has ever known. As much as things are up, it could be twice that if we could get things.”
“With two recent major breaches and countless amounts of smaller breaches, there is a huge adoption of cybersecurity solutions adoption going on,” added Ichelson. “Solutions like training and awareness, endpoint detection and response, managed SOC services and secure access service edge (SASE) are leading the way.”
- Page 1
- Page 2