MSP Day: More education needed but the future is bright

It has been a year since the last MSP Day and in that time the channel has seen more firms move to increase their services credentials and boost recurring revenues.

Not only does MSP Day turn the spotlight on the managed services community it also comes with state of the nation research providing an insight into the current state the market.

This year the Evolving Landscape of the MSP Business Report found that managed services was seen by the channel as the most significant revenue opportunity, dwarfing other potential sources of growth. Customers struggling with a lack of in-house skills was now the main catalyst for turning to an MSP for support.

The number of respondents reporting that a third of their revenues came from managed services climbed to 66% this year, compared to 52% in 2018.

Jason Howells, director of EMEA at Barracuda MSP, said that there continued to be a need for education to make sure that MSPs had the skill sets that customers were lacking themselves and that was a baton that had to be picked up by everyone in the industry.

He added that the survey also indicated there were some challenges battling customer misconceptions, whether it be around price or the subscription model, and that also needed to be dealt with.

“Just as it was last year, a basic lack of understanding from customers, resulting in ill-informed expectations, remains the biggest thorn in the sides managed service providers across Europe,” he added “It’s clearly up to us as an industry to do more to inform, educate and reassure those in the dark about our offering.”

Independent IT analyst Clive Longbottom echoed the need for more customer education around the managed service proposition: “The findings show that the MSP market is thriving – albeit still with certain pressures. On the buying side, there is still an abiding problem with misconceptions on what to expect from managed services. The selling side are seemingly ill-prepared to deal with this."

“This is leading to higher rates of customer defection (either to competitors or with services being taken back in house) than should be the case. It’s apparent we’re now moving past the stage of the MSP. Although shrink-wrapped, stand-alone services such as backup and restore are still popular, the savvy MSP is seeing that added value extra services offered to meet customers’ needs in an increasingly complex hybrid cloud world are becoming a necessity," he added.

Howells said that as a result trust was of paramount importance with customer relationships seen as crucial for success. He encouraged MSPs to talk to customers, to give them the right sort of responses to the questions and queries they might have.

Overall though Howells felt that there was momentum in the MSP space and it was heading in a positive direction: "The future is bright and there is still plenty of opportunity out there for everybody".

He added that since the MSP Day last year the number firms growing their portion recurring revenues had increased, which also showed things were heading in the right direction.