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MSP Market Research: SolarWinds, 2112 Group Findings

The overall MSP (managed IT services provider) market remains healthy and growing across North America and Europe, according to research findings from SolarWinds MSP and The 2112 Group.

Moreover, MSPs that successfully navigate key market challenges may further accelerate their businesses in multiple areas, the research suggests.

Key finds from the North America and Europe reports include:

1. Managed Services and IT Services – Ubiquity?: 97% of surveyed partners report some form of revenue-generating IT service offering — though we’re double checking to see if all of those services qualify as managed IT services & recurring revenues. (Thanks to a reader who posed the question to us.)

2. Proper IT Hygiene: For solutions in North America, respondents were most comfortable offering and using antivirus (89%), firewalls (83%), data backup and recovery (81%), and endpoint security (75%). In Europe, respondents were most comfortable offering and using antivirus (93%), data backup and recovery (82%), firewalls (82%), and antispam (80%) as solutions.

3. Blind Spots Are Growth Opportunities: European and North American respondents selected the same top three solutions they were least comfortable with : biometrics, cloud access security brokers (CASBs), and digital rights management.

4. More Blind Spots Are Services Opportunities: On the services end, European respondents were least comfortable with penetration testing (52%), auditing and compliance management (39%), and risk assessments (36%). North American respondents were least comfortable with auditing and compliance management (53%), penetration testing (47%), and security system architecture (39%).

5. Automation ROI: Automation saves North American MSPs an average of 15.6 full-time employee hours per weekand in Europe, an average of 23 full-time employee hours per week.

6. Automation Opportunities: In North America, respondents were least comfortable automating client onboarding (44%) with identity and access management in second place. In Europe, respondents were least comfortable automating SQL query workflows (57%) but shared their discomfort with automating identity and access management with their North American counterparts.

7. MSP Customer Expansion & Retention:

  • In North America, respondents pick up an average of four clients every three months while losing one in the same period.
  • In Europe, respondents pick up an average of three clients every two months while losing more than one on average in the same period.
  • Top causes of customer loss included the company either went out of business (26% in North America and 16% in Europe) or were fired by the partner (25% in North America and 16% in Europe).

8. MSP Business Hurdles:

  • North American MSPs claimed their biggest obstacles toward growth were sales (43%), lack of resources (42%), and marketing (26%).
  • European MSPs claimed their biggest obstacles toward growth were lack of resources (41%), sales (32%), and security threats (32%).

9. MSP Education Tools: To assist MSPs with the opportunities and challenges above, SolarWinds promotes such efforts as the MSP Institute, Empower MSP, and the overall SolarWinds Customer Success Center.

10. Overall SolarWinds MSP Business Growth: The research findings surface roughly one week after SolarWinds announced its latest quarterly financial results. During the earnings call, CEO Kevin Thompson and CFO Barton Kalsu predicted that SolarWinds MSP will continue to grow MSP-focused subscription revenue at 20 percent or greater for the foreseeable future.

MSP Market Growth: Bottom Line

The research findings from The 2112 Group and SolarWinds MSP highlight continued strong performance and opportunities for MSPs in North America and Europe.

Still, ChannelE2E has noticed several emerging challenges in the market — for vendors and MSPs alike. For starters, the core RMM (remote monitoring and management) software market has matured in North America — meaning that most new sales are “rip and replace” engagements rather than organic MSP growth engagements, ChannelE2E believes.

Also, MSPs and their software suppliers remain prime targets for cyberattacks. Although the sector is strengthening its security practices, more steps are needed to ensure the MSP industry retains its credibility and avoids potential compliance regulations from the U.S. government and European Union, multiple pundits have warned.

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