MSPs Anticipate Continued Revenue Growth
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MSPs Anticipate Continued Revenue Growth
A new report from Kaseya finds savvy MSPs are generating more revenue by increasing both the number of services they offer and their prices for those services. -
Revenue Generated by Managed Services
• Less than 25% of MSPs: 40%
• 25% to 50% of MSPs: 41%
• 51% to 100% of MSPs: 20% -
MSP Revenues Growing
26% of respondents said their average annual monthly recurring revenue (MRR) grew over the last three years by more than 15%. 18% reported an average three-year MRR between 10% and 15%. -
Types of Clients
For 55% of lower-growth MSPs, the largest percentage of their client base consists of companies with 25 or fewer employees. That compares to only 40% of high-growth MSPs, which are almost 60% more likely to have companies with more than 100 employees as the largest percentage of their client base. -
Pricing Models
64% of MSPs rely on value-based pricing, versus 24% cost-based. Another 12% said they rely on a price-match model to remain competitive. Almost half charge based on a mix of per-device and per-user. The rest focus on either device (34%) or users (18%). -
Number of Tiers of Service
33% offer three or more tiers of service, 25% offer two tiers and 12% offer one tier. Another 30% make their services available à la carte. -
Average Size of Monthly Contract
• Up to $1,000: 23%
• $1,001 to $2,500: 37%
• $2,501 to $5,000: 22% -
Price Increases by Service
High-growth MSPs reported more price increases by service offering in the past 12 months, and they anticipate more price growth by service level in 2017 than their lower-growth peers. -
Past and Future Price Increases
High-growth MSPs reported increased pricing in the past 12 months—almost 50%. They anticipate pricing increases for 20 listed services in 2017. -
Network Operations Center Services
47% of high-growth MSPs offer 24x7 network operations center services. High-growth MSPs are 125% more likely to outsource their NOC services. -
Security Issues
30% of the MSPs identified security as their top concern, but three of the concerns listed are cloud-related. When these are added together, cloud concerns virtually tie with security concerns: 30.79% versus 30.22%, respectively.
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Why Metrics Matter to the Channel When it comes to being a managed service provider, it would appear the rich are more likely to get richer. A new survey of 900 managed service providers (MSPs) conducted by Kaseya, provider of an IT service delivery management platform, finds the percentage of revenue being generated by managed services continues to increase. Very few of the solution providers who took part in the survey are wholly dependent on managed services revenue, but revenue from managed services as a percentage of their overall revenue continues to climb, the study shows. In addition, the more services that managed services solution providers offer, the healthier their business appears to be: Kaseya said MSPs with growth rates of more than 10 percent typically offer a much broader range of services than their counterparts. What’s more, MSPs that concentrate their efforts on the midmarket appear to be significantly better off than those focused on small-business customers. These findings suggest that MSPs that focus on value achieve higher revenues by increasing prices for their services, rather than focusing on lowering prices at the expense of their profits.
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