MSP Revenues Continue Shift From Product Resale to IT Services

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Take a look at MSP revenues, and the pendulum continues to shift from product reselling and IT consulting toward monthly recurring revenue (MRR) services, according to MSP Day research from Barracuda Networks.

To wit: MSPs expect to generate 63% of their income from services in 2022, up from 53% in 2021, according to the survey of 500 decision makers and knowledge works from MSPs worldwide, Barracuda found.

Moreover, MSPs expect their overall annual revenues to reach $12.12 million on-average in 2022, up from $8.93 million in 2021, Barracuda determined.

Amid that backdrop, MSP business valuations surged to record highs in Q1 of 2022, though they may be cooling off a bit in Q2 of 2022 amid financial pressures on Wall Street, ChannelE2E believes.

Meanwhile, it’s important to note that product reselling and IT consulting are not disappearing from the MSP landscape. Indeed, most MSPs offer consulting services in order to win, maintain and/or upsell managed services business with end-customers.

Translation: “Everything” may be available as a service, but that doesn’t mean everything will be consumed as a service.

Barracuda Networks Ownership, MSP Partner Focus

KKR acquired Barracuda Networks from private equity firm Thoma Bravo in April 2022. Financial terms of the deal were not disclosed.

Under KKR’s ownership, Barracuda Networks continues to focus on MSPs as a core go-to-market channel and sales motion. Key offerings span cloud-based data protection, security software, security operations and RMM (remote monitoring and management) software.

Barracuda generates more than $500 million in annual revenue, KKR indicated in April 2022. That compares to $352.6 million back in 2017, according to historic data from Barracuda. Still, Barracuda’s exact annual revenue and EBITDA profit figures are not currently disclosed.

Barracuda: Security and MSP Software Acquisitions

Key Barracuda acquisitions tracked by MSSP Alert and ChannelE2E have included:

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