MSPs continue to show signs of resilience

Datto’s CEO Tim Weller has struck an optimistic tone around the recovery that the managed service provider (MSP) sector is making since the depths of the Covid-19 lockdown.

Speaking to partners at a virtual MSP Day focusing on continuity, Weller provided an update on the current channel landscape.

“Our data suggests the MSP industry is not only still standing, but thriving, and we’re proud to be in this community with all of you,” he said, adding that the channel’s work so far during the pandemic had made a real difference to many customers.

“It’s not been a straight line for any of you – some of your customers may have gone bankrupt, and some of them may still be struggling to pay you. On the flip side, new customer opportunities have also risen as SMEs [small and medium-sized enterprises] scrambled towards remote work online business models.

“The MSP industry has been incredibly resilient, we’ve only seen a small percentage of you even ask us for financial relief, largely where you are serving difficult SME verticals,” he added.

He went on to say that it seems as if the worst point of the crisis might be in the past, with the MSP sector recovering as the months went by.

“We can see from our metrics that the industry’s health has improved dramatically from [hitting] bottom in April. So we all had that shock to the system and rushed to work from home in March, and I think April will prove to be the bottom in hindsight,” he said.

“It’s been hard to predict this crisis, so I won’t predict the future necessarily, but the third quarter will prove to be better for the industry than the second. When we all get the data from our pipeline, it suggests that the industry feels optimistic about the fourth quarter.”

However, he cautioned against viewing the MSP recovery as a unified experience, with differences still strong locally and vertically.

“For every MSP we’ve got that’s called and said they are really struggling, you’ve got somebody on the other line going, ‘I’m having a record year and putting out five times the proposals than I ever did before’, so it’s important to remember we’re talking about the global stage and there’s haves and have nots…but it’s steady as she goes,” he said.

He added that Datto itself was in a solid position and had been able to maintain support for partners right through the coronavirus pandemic: “General crisis management lessons apply and from 1 April we said let’s focus on bottom line, balance sheet strength, and on partners holding hands, helping them.”

For many MSPs, the crisis has given them a chance to demonstrate to customers just what their value is as a trusted adviser, and Weller said that the SME customer base continued to be focused on the idea of using digital transformation to improve their businesses despite Covid-19.

“The long-term MSP opportunity is now better than ever – with SMEs so focused on digital transformation, the complexity and need for tech that comes from that plays right into the hands of the global MSP industry,” he said.