MSP Benchmark Survey Results Provide Roadmap to Growth
public cloud services and 49% for private cloud management. Those managing AWS, Azure, and Google environments for clients generally experienced higher MRR growth than other MSPs.
Managed Services Remain the Biggest Share of Revenue
MSPs have wisely diversified their revenue streams, serving customers in a variety of areas including break-fix, hardware and software resales, and professional services. But managed services continue to top the charts at 30% of overall revenue.
Despite the influx of new items on their menu, the original managed service is still a big part of MSPs’ value proposition. Remote monitoring and management services are still a bread-and-butter offering for MSPs; 61% of respondents cite it as their most important application and 80% offer it.
Across the board, the percentage of MSPs offering many popular services has slightly dipped from 2018 to 2019. For example, help desk/desktop support dipped to 88% from 93% in 2018, and network and connectivity support is offered only by 83% of MSPs compared to 91% the year prior. Yet despite fewer MSPs offering these services, those who still do experienced 18% year-over-year growth in MRR.
Dark Web security monitoring saw the biggest growth in terms of how many MSPs offer it. This more than doubled in 2019, up to 32% from 15% in 2018. Office 365 backup saw the second-biggest leap, as 56% of MSPs now offer it, compared to 48% in 2018.
Ninety-seven percent of MSPs provide backup services for their clients, and onsite-to-cloud backup is the preferred backup choice for MSPs, with 61% employing this method. However, just 33% of MSPs are testing their clients’ recovery capabilities monthly or weekly, meaning many are tempting fate with less frequent checks.
Winning Pricing Strategies
Increasing MRR is the name of the game for MSPs, and those seeing the highest growth are also adopting the smart practice of value-based pricing. MSPs using price matching and cost-based pricing to set their fees are leaving money on the table, working harder for slimmer margins.
As far as how they’re charging customers, it’s a hodgepodge of per-user, per-device, and per-hour fees. When MSPs do opt to charge an hourly rate, the most common range is $100 to $200 per hour.
Looking Ahead
Just as many MSPs will see some of their clients close down, merge or be acquired in the wake of COVID-19, the same fate may befall some MSPs. Economies of scale and a buyer’s market could lead to market consolidation via mergers, sell-offs and “acqui-hires.” MSPs focused on growth and with deeper pockets may view this as a prime buying opportunity.
For MSPs to survive and thrive, an integrated management platform for the various services they provide is clutch. MSP employees are working in a very challenging environment with far more distractions, so relying on fewer user interfaces and dashboards means a shorter learning curve and less chance something falls through the cracks. Eighty-one percent of respondents said this is key to their ability to drive bottom-line profitability, making an investment in a comprehensive management solution a wise solution even during these trying times.
Learn more about the survey results and see how you stack up against respondents.
Jim Lippie is GM & SVP Partner Development, Kaseya.
This guest blog is part of a Channel Futures sponsorship.
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