The Kaseya 2024 MSP Benchmark Report, which surveyed 1,000 MSPs globally, shows cybersecurity remains a top area of growth for MSPs as well as a top challenge for their customers. The just released report explores how cybersecurity, AI, and automation are impacting MSPs’ opportunities and workflow, along with work-life balance and hiring trends.
Cybersecurity Good News, Bad News
For 73% of MSP respondents, cybersecurity is a top revenue driver for their business, and 78% consider cybersecurity as a top IT challenge for their customers, an increase from 67% the year prior.
Other challenges SMB customers face, according to respondents, include AI and machine learning, legacy system replacement, and meeting audit and compliance requirements.
“Compliance is only going to drive more [cybersecurity] activity,” says Chris McKie, vice president, product marketing networking, security and risk management solutions, at Kaseya. “The NIST 2 [Cybersecurity] Framework just came out, which adds a whole element of governance to that. … The other part related to that is SOC 2 compliance. We’re seeing more and more organizations requiring their third parties to demonstrate SOC 2 compliance. So, for an MSP, this is a huge opportunity to help their clients be SOC 2 compliant.”
On the upside, a majority of MSPs (64%) say that fewer than 10% of their SMBs customers experienced a cyberattack this year, and 46% say most of their clients turn to them for advice on cybersecurity plans and best practices.
Top Challenges
Thirty-six percent of MSPs identify customer acquisition as their top challenge in 2024, up from 24% in 2023. This aligns with findings from a recent MSP Success reader survey that found customer acquisition is one worry keeping MSPs up at night.
According to the Kaseya report, other challenges include dealing with advanced and sophisticated security threats (19%), hiring (12%), and shrinking IT budgets and spending (9%).
Proactive Business Development
More than half of the respondents (55%) do not have a plan to acquire or sell their MSP this year. Instead, 61% intend to drive growth by providing new services to both new and existing clients.
McKie points to cyber insurance requirements as one driver for new services. “Many cyber insurance policies now require you to have EDR or security awareness training. … For the MSP, that’s an opportunity because before they may have not offered cyber awareness training or EDR or managed SOC. So, we’re seeing growth being driven by the need to have additional services because other forces in the market require it. And again, SOC 2 is another great example of that.” (For more on the SOC 2 opportunity, see “Uncover Lucrative Opportunities With SOC 2 Certification.”)
MSPs are also recognizing the importance of sales and marketing in driving their business expansion strategy, according to the Kaseya report, with about 49% of MSPs considering starting or improving their marketing efforts.
AI A Double-Edged Sword
The report identifies artificial intelligence as both a boon and a bane. One the one hand, 33% of MSPs plan to use it to eliminate tedious tasks and 15% expect it to improve security. On the other hand, 20% expect it to increase security risks.
Automation and Integration Are Key To Solving IT Challenges
The MSP Benchmark Report also found that investing in IT management solutions with built-in automation integration capabilities is a top priority, as 85% of respondents say automation is a must-have, and 67% believe integration between core MSP applications is very important for their work.
Over three quarters (75%) agree that integration between applications is a time-saving measure, and almost an equal amount (70%) believe that integration drives efficiency.
Opportunities Ahead
While the report identifies a variety of ways to improve efficiency and grow business, “obviously cybersecurity is top of the charts,” says McKie. “It’s an area that has its challenges, both in [hiring] people as well as delivering those services, but it also is showing to be a money maker.”
There is an opportunity for MSPs to expand their security stack with services such as pen testing, vulnerability scanning, managed SOC, and more, he says. “Security gets very wide. You can go a mile deep, and you can go a mile wide. And that width is what really gives an MSP or an MSSP greater opportunity because as they add more to their security stack, they add more to their service offerings. So, it’s a win-win situation in that sense.”
Kaseya’s 2024 MSP Benchmark Report was conducted by Strategy Analytics on behalf of Datto. Of the respondents, 51% were MSP executives and 49% were MSP technicians.
For more findings and to see the complete report, go here.
