MSPs have made strides but have a long way to go before they are active providers of more advanced services, recent research from CompTIA finds.
Managed services is now the second most popular business model in the channel today. Three in 10 respondents ranked managed services as their leading source of revenue in the last 12 months. Traditional IT solutions deployed on a project basis still come in first place, at 44%.
Just over two-fifths (43%) say they’ve been an MSP for five years or more. Another 45% say they’ve been an MSP for two to five years. Just under 12% have been in business for less than two years.
Two-thirds of the respondents described their organization as having a high level of MSP expertise. The other 33% say their skills are getting better.
Half of respondents expect managed services to comprise three-quarters of their revenue within two years. Another 45% say they will make up half their revenue in that time.
Improving service utilization rates ranked highest, followed by increasing revenues and protecting the customer base.
Security in the form of firewall management and server management are tied for first place at 74%. Storage (72%) and network management (71%) are also top services provided.
The top new offering MSPs plan to deliver is managed print services (32%), followed by help desk (31%), and virtual desktop and database management, tied at 30%. A full 59% plan to increase the number of services they offer.
Between half and 60% said they are optimally efficient across functions such as technical processes, sales effectiveness, MSP pricing structures and customer retention. On average, roughly four in 10 said they were close to optimal across all functions and a full 76% described themselves as being a well-oiled machine. Respondents were least confident about efficiency in maximizing ROI in new areas, such as cloud computing or developing vertical industry expertise.
Less than a third of MSPs (27%) said buying and implementing commercial professional service automation (PSA) or remote monitoring management (RMM) software is a priority. Primary reasons cited for adopting these tools are managing problem resolution more efficiently, managing customer billing and payments, and managing internal sales and marketing teams. A full 59% of those that have made these investments say it has been worthwhile.
A full 80% of MSPs say they’ve had one or more employees poached by an internal IT organization. Depending on their size, 29% to 41% of MSPs say retaining employees is a major challenge.
Just over a third (36%) say they hire a new technician for every 30 customer seats gained. Another 25% put that number at 20 customer seats.
Adding new customers tops the list, at 62%, followed by expanding the base of services consumed by existing customers (58%), expanding the number of services offered (57%) and improving service utilization rates (56%).
Just over half (54%) say they have made a strategic investment in cloud computing. Another 44% say they will respond tactically to a customer request. A full 62% admit cloud computing is the No. 1 issue keeping them up at night, and more than half are worried about margin erosion.
Just over half (52%) put the cost of acquiring a new customer at somewhere between $1,000 and $2,500 each.
Most MSPs (33% to 49%) engage customers on a monthly basis, depending on their size. Another 20% to 37% say they engage customers weekly.