Revenue growth is on the rise for MSPs, but so is competition, according to Kaseya’s third annual Datto Global State of the MSP: Trends and Forecasts for 2024 Report, released today.
Despite a challenging economy, 68% of MSPs in North America experienced a revenue increase, with 38% of that group growing by more than 10%. Of note, 84% expect revenue to increase over the next three years.
At the same time, more than a third (35%) of MSPs globally cite competition as the biggest challenge, up from 29% last year.
In this competitive climate, improving customer experience is a top strategic priority for 47% of respondents, tied with growing revenue. Other strategic priorities are adding new clients, improving technology solutions, improving profitability, building cyber resilience for customers, improving operations, and controlling costs.
New solutions that represent growth opportunities, according to respondents, include collaboration software (23%), storage design and implementation (20%), and self-service capabilities (20%). The top services MSPs expect to add going forward are collaboration software, business intelligence or analytics software/services, incident response and forensics, and threat hunting.
At the same time, the research finds that vendor fatigue is up, with 74% of respondents saying they prefer to use fewer vendors compared with 64% in 2022.
Cybersecurity remains an ongoing challenge, with 28% of respondents pointing to their customers’ lack of concern about cyber risks. The top cyberthreat MSPs cite is computer viruses, followed by phishing, endpoint threats, spyware, and password compromise. North American respondents (54%) say concern about rising cyber risk is the top reason why their clients seek an MSP’s services, followed by the need for more expertise than what they have internally and to help manage hybrid/remote workforces.
Finally, about half of the respondents report that 50% or more of their clients are shifting their workloads to the cloud. MSPs in North America anticipate the most significant shift in cloud migration in the next three years, driven by clients adopting infrastructure as a service (IaaS) and migrating databases and email servers to the cloud. Nearly half of the respondents (47%) predict that 75% to 99% of their client base will move workloads to the cloud in the next three years.
This year’s report surveyed 1,575 MSPs worldwide about what keeps them up at night.
