5 Trends That Will Advance – and Challenge – the Channel in 2018

Rob Rae

By Rob Rae, VP, Business Development, Datto

2017 has been a big year for MSPs. Global ransomware attacks of unprecedented magnitude and a record hurricane season tested the channel’s resilience — and our customers’ disaster preparedness. But don’t get comfortable, because the managed-services sector is evolving at an accelerated pace. With an 11 percent CAGR, the global MSP market is projected to hit the $245 billion mark by the end of 2022, according to a report by Market Research Future.

What’s ahead for channel partners in 2018? I’ll dive into some trends here that I believe will advance the future of the channel as we move toward the dawn of a new decade.

1. Maturation of the MSP Model

MSPs are becoming more sophisticated and are increasingly aiming to deliver enterprise-grade solutions that are also simple to use. Some MSPs will grow to become virtual CIOs serving small-to-midsize businesses. More than simply managing an SMB’s day-to-day IT operations, these providers will gain the opportunity to become active members of these customers’ organizations and contribute to their success by recommending the latest advancements in networking, BC/DR and SaaS protection technologies to support, in real-time, business needs and goals. But it’s not just MSPs that are maturing. Recent and sizable consolidation in the channel-focused supplier space, like my company Datto’s acquisition of Autotask last month, further validates the MSP model.

2. MSPs Go Global

The MSP model is validated in North America and Australia, and customers want global reach, as a recent Global Channel survey shows. But while the European market is well beyond the question of “is this a good idea?” the fact is, Europe is traditionally a bit more conservative than its counterparts when it comes to adopting new business models. This, together with region-specific challenges like Brexit, has Europe pacing at about half the adoption and consolidation rate of North America and Australia. However, the conversation is no longer around the value of the MSP model in Europe; instead, it’s focused on creating better efficiencies for MSPs.

Conversely, the Asian market is much quicker at adopting business models and technologies that have a proven track record. There’s rapidly growing interest in the MSP model in the region, and we are going to experience really quick levels of adoption that will make Asia the market with more growth in 2018. Overall, look for supplier partners that will maximize the value you can offer to customers, no matter where they do business.

3. The Ransomware Threat Continues 

Technology is getting more complicated, which is bad news for SMBs relying on in-house IT teams. And cybersecurity leads the way in complexity: According to Datto’s 2017 State of the Channel Ransomware report, 97 percent of global MSPs reported in 2017 that ransomware is becoming more and more frequent, and 99 percent of respondents expect the frequency of attacks to continue to increase over the next two years. Massive, global ransomware outbreaks are going to become …

… monthly events, rather than a quarterly occurrence. This offers MSPs the opportunity to position themselves not only as managers of their customers’ data, but also as its protectors.

4. A Growing Need for SaaS Protection

Use of software as a service by SMBs is bound to keep expanding in 2018. It is often said that “who owns the data (Google Apps, Box) owns the customer.” That’s something MSPs need to pay attention to. As to services built around cloud, protection of data held by SaaS providers is going to be a massive growth opportunity for MSPs as adoption continues and managed service providers move to offer all-encompassing data solutions for their customers.

5. A New Generation of MSPs

MSPs, and the channel overall, have an aging workforce. According to Datto’s 2017 State of the MSP Report, the majority of MSP employees are male, college educated and between the ages of 35-54. Only 23 percent of that workforce is between the ages of 25-34. However, the industry is at a tipping point in which senior leadership is looking for the next generation of leaders within this younger pool. Additionally, many colleges are adding programs in cybersecurity and other IT-related fields that are helping to attract younger generations to the field. A worthy 2018 resolution is to mentor a millennial or to speak to a college class about our business to make sure the MSP model stays strong well into the future.

As vice president of business development, Rob Rae is instrumental in developing Datto’s managed service provider ecosystem and building Datto’s partner led go-to-market strategy. In his role, Rob oversees many different aspects of Datto’s partner programs including community, events, marketing development funds, vendor management and the partner advisory board, all with the goal of helping our partners grow.