Kaseya's Datto Survey Hints at Promise for Global Managed Service Providers

Unified IT management and security software provider Kaseya just released the annual "Datto Global State of the MSP: Trends and Forecasts for 2024 Report," which sheds light on global managed service providers and their mindset concerning the market.

Increasing competition and concentrating on vendor unification emerged as chief concerns for the nearly 1,600 global managed service providers who responded to the survey. On the growing competition front, the survey's participants said that increasing competition prompted them to prioritize customer experience above all.

"As the industry witnesses an influx of new players and opportunities, global managed service providers are harnessing this dynamism to innovate and grow at an unprecedented pace, with the fiercely competitive landscape driving a shift in priorities to deliver a memorable and positive customer experience, which now stands shoulder-to-shoulder with revenue growth as the top strategic priority," the report's authors state.

And then there's vendor consolidation. Kaseya found that global managed service providers are increasingly hoping to simplify their tech vendor associations in Europe and Asia Pacific. As such, roughly 74% of respondents said "they prefer to use fewer vendors to meet their technology needs," a move the report says is not only about simplification but also a step toward greater operational efficiency, cost savings, and trying to eliminate vendor fatigue.

Underlining Global Managed Service Providers Report

Robert DeVita, CEO and founder of Mejeticks, said his firm continues seeing considerable newly formed MSPs broaden their territories.

Majeticks' Robert DeVita

"We are also seeing some of the larger MSPs broader their distribution strategy by embracing the traditional channel and leverage trusted advisors to gain new business," DeVita told Channel Futures.

He additionally conveyed that 80% of the MSP deals that his firm earns are due to poor customer service or MSPs operating legacy technology to support customers, such as homegrown UCaaS solutions that he says "are not scalable or feature-rich," loaning additional significance to Kaseya's discoveries.

The Forecast for MSP Growth is Healthy, Report Uncovers

Negative economic conditions aren't impacting MSPs, the report found. With the global MSP market being competitive, the survey further found that it has more than "exploded" in recent years, notwithstanding what it calls a "difficult economic climate." It unearthed that MSPs incurred what it calls "major growth" in 2023.

Not only is the outlook for global managed service providers on a worldwide scale "strong," according to Kaseya, but revenue is on the rise too. It found that globally, nearly all MSPs' annual revenue rose by more than 10% year-over-year. That figure was even more significant in Europe, where two-thirds (64%) of MSPs experienced year-over-year revenue growth, 37% of which experienced an increase of more than 10%.

Looking toward that potential for growth in 2024, Kaseya said, that will be within the scope of collaboration and storage, with collaboration software, self-service capabilities, storage design, and implementation rated as "notable growth opportunities for MSPs as we head into 2024."

"At the same time, the survey shows that competition is stiff, as more than one-third (35%) of MSPs globally attribute competition to being the biggest challenge, up from 29% last year," Kaseya highlights.

The firm assures while competition may appear to be an obstacle, MSPs are taking the prospect of competition and using it to drive innovation.

"And they are offering solutions to better meet customer needs, with 91% regarding customer experience as a high or top priority," according to the survey.

All of this appears to align with what we saw last week at the Channel Futures Leadership Summit, where MSPs from across the globe gathered to mark their achievements, many of which celebrated elevated earnings and growth potential.