MSP Survey: Faith in Channel Waning Amid Economic Struggles

Managed service providers' faith in the channel has been on the decline, according to the Q2 Channel Futures Market Outlook MSP survey.

Of the 134 respondents to the quarterly MSP survey, only 58% of respondents said that the channel economy was performing good or excellent. That is a 21% drop compared to Q1 of 2024, where 79% of respondents had a favorable view of the channel.

Source: Channel Futures

Trust in the economy has also continued to wane. Only 35% of respondents said that the current U.S. economy was good or excellent, a 9% drop from Q1 2024.

The response follows a similar question, where 48% of respondents said that the current economy had extremely or somewhat negative effects on their customers. Only 32% of respondents said that the economy had a somewhat or extremely positive impact of their customers.

Source: Channel Futures

That decline in faith has occurred despite increased revenue. 67% of respondents said that their MSP business results had increased in some way year-over-year. Eighteen percent of respondents reported that revenue grew more than 20% for them.

Refined MSP Workforce through Layoffs

Employers in the channel have had to make a number of layoffs to accommodate shrinking revenue. That's also had a number of effects on the companies' bottom line. 30% of respondents said that it provided them with a more skilled IT talent pool. It's also been detrimental, in that 29% said it lowered client confidence and reduced IT vendor support.

Related:MSP Survey: Channel in Better Shape than U.S. Economy

Respondents were also slow to add vendors. Only 49% of respondents said that they added vendors in Q2 2024. 45% of those vendors were AI-centered vendors, following the trend of businesses continuing to expand their interest in AI.