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Biggest MSP Business Model Challenges: Datto Research Says…

Datto recently released the results of their second annual State of the MSP survey, which pinpoints key trends and challenges for today’s managed services providers. The survey asked roughly 2,300 MSPs worldwide about their day-to-day lives and how they approach their businesses.

Challenge 1: Sales and Marketing

According to the survey, marketing and sales currently pose the biggest challenge for many MSPs. Fully 53% of the respondents claim that lead generation, hiring sales talent, cold calling and market differentiation is definitely a weak spot for them.

You know the cliche: Many MSPs get started because the owner is an extremely talented technician. As they build out their team, they hire more technicians, and they don't necessarily worry about marketing -- since word-of-mouth travels quickly.

When an MSP reaches the point they need to bring on sales or marketing staff, it can be difficult for them to find someone who can understand the technical aspects of the company in order to properly brand, advertise and market the company.

On the other hand, the technical staff can lack the sales and marketing skills necessary to effectively sell as well. This leaves the MSP with a sales and marketing challenge that very few have been able to figure out how to overcome.

Challenge 2: Hiring and Training Staff

The MSP market is highly competitive. Finding skilled technicians to hire has become a huge challenge for MSPs. There are too many companies and not enough talent to go around. Indeed, 41% percent of survey respondents say staffing and training is their biggest challenge.

MSPs also typically have a unique way they handle tickets and issues, and many specialize in specific markets. A technician jumping from an MSP that specializes in finance companies could have a big learning curve when trying to support clients in the healthcare industry. Each new hire -- no matter how skilled -- will have to be trained, and that takes time.

Other Findings

Most MSPs are transitioning customers towards automated solutions that minimize potential problems. This methodology allows MSP to snuff out potential issues before they burn a customer, and gives clients a set fee schedule.

The twist: The survey found 75 percent of MSPs still offer break-fix services. I believe that most of those MSPs only offer break-fix services to existing, firmly established customers. Any new clients the MSP signs, I suspect, are agreeing to more modern solution offerings.

Included in the survey was a little bit of fun as well. Datto asked its respondents an extremely important question. Do they prefer Star Wars or Star Trek? 68% are sitting on the right side of history (according to me) and picked the Wars over the Trek.

For more detailed findings from Datto’s 2018 State of the MSP Report, find the report on download the report from Datto’s website.