October 31, 2022

Datto Global State of the MSP Report Reveals Biggest Challenges Facing MSPs

Partners are worried about competition, revenue growth, profitability, customer acquisition and hiring; Survey also found break-fix is making a comeback … but with a twist

MIAMI, FL – October 31, 2022Kaseya, the leading global provider of unified IT management and security software for managed service providers (MSPs), small to mid-size business (SMBs) and mid-market enterprises (MMEs), released its Datto Global State of the MSP Report, which surveyed 1,800 MSPs worldwide about what keeps them up at night.

MSPs ranked their biggest challenges as follows:

  • Competition – 29% rated this as their top concern
  • Revenue growth and profitability tied – 28% ranked these as pressing challenges
  • Acquiring new customers and hiring tied – 24% felt these were difficult for them

“For the second year in a row, the Datto Global State of the MSP Report shows that our partners are worried about the competition,” said Fred Voccola, Kaseya CEO. “This comes as no surprise. The pandemic led to an increase in need for IT services and produced savvy customers who like to shop around. MSPs have had to evolve to keep pace with the competition.”

The report also highlights key trends among MSPs. The most surprising finding is that the revenue generated from break-fix is increasing. Internal IT departments are reluctant to work with new vendors, and MSPs often penetrate the market by focusing on fixing a problem for them. For example, they may offer a compliance audit and the results may lead to the MSP helping via a co-managed service. This paves the way for MSPs to establish a relationship and in the future expand their service offerings with the customer.

“This scenario validates something we’re hearing directly from customers on a daily basis. The traditional break-fix model is evolving, and it represents a gateway for MSPs to secure new business,” explained Voccola.

Cloud integration ranked as another top trend as more clients look to the cloud for better storage design and implementation to increase productivity and collaboration. About 95% of MSPs surveyed found cloud solutions as a new market opportunity, although many have resisted moving to the cloud due to compliance, security or budgetary concerns. Yet half of MSP respondents said they expect 75% of workloads to be in the public cloud in three years.

The report also offers data about the top products and services MSPs are currently offering, which were rated as follows:

  • Cloud-based infrastructure design and management (83%)
  • Office productivity software (83%)
  • BCDR (79%)

The top three managed security services currently offered are email security, followed by security framework and compliance auditing, and identity access management. Several areas are expected to grow, with managed detection and response, dark web monitoring, compliance monitoring, and privileged access management taking the leading spots.

When it comes to planned offerings, the report identified the following areas as top-of-mind for MSPs:

  • 30% – managed detection and response
  • 30% – dark web monitoring
  • 29% – web content filtering
  • 29% – compliance monitoring
  • 29% – privileged access management
  • 28% – endpoint detection and response (EDR)
  • 28% – patch management

Click here to download the Datto Global State of the MSP Report.