Where is the managed services provider (MSP) market heading in 2017? Here are 10 MSP industry predictions from ChannelE2E.
10. Managed Services Market Size: Looking beyond 2017, here are two MSP market size forecasts:
- The global market for managed services will grow from $107.17 billion in 2014 to $193.34 billion by 2019, at a Compound Annual Growth Rate (CAGR) of 12.5%, according to Markets and Markets. North America (NA) is expected to be the largest MSP in terms of revenues generated, but Asia-Pacific (APAC) is expected to emerge as a high-growth market, the market researcher said.
- Another forecast says the global managed services market will reach $229.59 billion by 2020. That's a 10.20 percent CAGR from $128.19 billion in 2014, according to Mordor Intelligence.
- We occasionally post additional forecasts in the ChannelE2E FAQ section.
9. MSPs Managing Azure, AWS Go Mainstream: First mover MSP advantage on Microsoft Azure and Amazon Web Services is now over. Hundreds of MSPs now manage and monetize workloads on AWS. In case you missed the first-mover wave, here are 50 MSPs that jumped early into the AWS market. Meanwhile, keep an eye on Microsoft -- which will soon put a much brighter spotlight on Azure-centric MSPs. (Hint, hint.)
8. Multi-Cloud Managed Services: Much in the way that traditional MSPs must manage Windows, Linux and Mac OS devices, a shift toward multi-cloud management (across Azure and AWS) will accelerate. The big question: Will MSPs extend beyond AWS and Azure toward Google Cloud Platform, Oracle Cloud and IBM Cloud? In most cases, most of those opportunities will involve specific opportunities -- such as big data analytics on Google Cloud Platform...
7. Niche Managed Services: Some MSPs will push into DevOps managed services; Docker and container services; and managed services for Hadoop and other big data platforms. However, our enthusiasm for those MSP opportunities has cooled off a bit in recent months. While large corporations have largely outlined DevOps, container and big data strategies, most MSPs have yet to figure what moves -- if any -- to make in those markets.
6. Managed Internet of Things (IoT) Services: The consumer IoT market will continue to struggle. But industrial IoT platforms like GE Predix will pave the way for a new generation of MSPs.
5. Managed Services Tools: Based on customer and partner demands, MSP software vendors will shift their development priorities from "integration" to "simplicity."
- Where We Were: For the past decade or so, MSP-centric software offerings like PSA (professional services automation), RMM (remote monitoring and management), NOC (network operations center), BDR (backup and disaster recovery) and endpoint security celebrated integrations across software platforms.
- Where We're Going: MSPs will demand simplified management tools that deliver faster time to deployment and monetization. Fewer mouse clicks and ease-to-activation will rule the day.
4. Disruptions From Above and Below: At the high end of the MSP software market, watch for players like FinancialForce, ServiceNow, AppDynamics, DataDog and New Relic to catch on in their specific niches. At the low end of the market, players like Atera will gain momentum based on ease of deployment.
3. M&A Tuck-Ins: Instead of pursuing large M&A deals, players like Autotask, ConnectWise, Continuum, Kaseya and SolarWinds MSP will pursue tuck-in deals that allow MSPs to generate more revenues. Kaseya is the most likely company on that list to make a near-term acquisition. Most of the 2017 focus for each of those players, however, will be on execution and geographic expansion.
2. Managed Security, Backup and More: Actually, predictions in those areas are still to come. Check back in the days ahead for details.
1. MSP Valuations: Alas, overall MSP valuations will drop a bit, ChannelE2E predicts. The reason is based purely on demographics. There are too many aspiring sellers. Potential buyers, in turn, are scrutinizing would-be sellers more closely than ever. To track some rough valuation metrics visit the ChannelE2E FAQ section. To track VAR, MSP and CSP mergers and acquisitions visit the ChannelE2E Milestones section daily.