Snapshot of a Modern MSP: Is This You?

Datto’s latest Annual State of the MSP report is out, and it turns out that nearly 100% of MSPs are highly optimistic about their industry. A whopping 80% report their revenue is from recurring services, the top four of which are business continuity and disaster recovery (BCDR); networking; productivity software; and help desk.

Cybersecurity, however, is getting more of their focus, particularly in thwarting and recovering from ransomware attacks unleashed on their clients. Ransomware and cybersecurity have soared as a joint MSP concern, from 14% two years ago to 30% today.

By the numbers: MSP personnel demographics. Nearly a third, (31%) of MSPs are between 40 and 49 years old, and slightly over half (51%) have both business and technical responsibilities on the job. Only one-quarter (26%) are focused only on technical duties. The MSP technician averages a decade younger and struggles with vendor and cybersecurity issues. The typical MSP leader struggles more with revenue generation and sales.

As to differences in interests, the MSP technician tends to prefer watching The Orville and Star Wars, whereas the typical leader (executive and C-level management) tend to be fans of Game of Thrones and “anything Marvel.”

The typical MSP business. The managed service provider industry is well-established. Nearly half (47%) of MSPs have been in business for more than 16 years. Only 7% have been in business for just three to five years. Almost all are hiring: Seventy-one percent plan to hire up to five new employees within the year. Europe-based MSPs expect a harder time in hiring the talent they need compared to their global counterparts.

“Continued access to a pool of people with the right skills and experience is the single biggest HR concern for U.K. businesses preparing for Brexit,” according to a SHRM report. SHRM is the Society for Human Resource Management, an organization dedicated to promoting and improving the HR profession.

“Employers are also concerned to know the impact of Brexit on the employment law regime in the U.K. Will they have more or less flexibility in managing people or will things stay the same as now?” the SHRM report continued.

Other than the unique difficulties to hiring talent for MSPs in the U.K., more than one-half (58%) of MSPs located elsewhere expect no more recruiting challenges than last year. In any case, annual revenue expectations are expected to be on the rise, so at least paying for the new help should be less problematic. More than one-quarter (27%) of MSPs report their annual revenue to be between $1 million and $5 million, while another 22% are bringing in more than $5 million.

The modern MSP also is more stable by virtue of spread in their clientele. A solid 41% report having more than 100 clients and nearly 80% expect to add one to 10 new clients within a year. Over half are distinguishing themselves by specializing in a particular industry. The top specialization is health care, at 34%, and the lowest in MSP interest is startups at 10%. Perhaps surprisingly, more MSPs (24%) specialize in serving nonprofits as do in serving manufacturing (23%).

MSPs take on cybersecurity. While cybersecurity is largely seen as the province of managed security service providers (MSSPs), it’s a strong draw for MSPs too. The top three critical security products and services, say the MSPs polled for the Datto report, are antivirus (82%), advanced firewall (74%), and remote monitoring and management (RMM) at 69%. Business continuity and disaster recovery (BCDR), seen as the best strategy for overcoming or thwarting a ransomware attack among other advantages, is also in increasing demand by MSP clients.