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MSPs Anticipate Continued Revenue Growth

MSPs revenue 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% […]

Written By: Michael Vizard

Jan 30, 2017

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MSPs revenue

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 24×7 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.

Michael Vizard

Michael Vizard is a seasoned IT journalist, with nearly 30 years of experience writing and editing about enterprise IT issues. He is a writer for publications including Programmableweb, IT Business Edge, CIOinsight, Channel Insider and UBM Tech. He formerly was editorial director for Ziff-Davis Enterprise, where he launched the company’s custom content division, and has also served as editor in chief for CRN and InfoWorld. He also has held editorial positions at PC Week, Computerworld and Digital Review.

MSPs Anticipate Continued Revenue Growth

Michael Vizard

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