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Barracuda: MSPs under pressure to support AI
Firm’s latest survey of the managed services market revealed the pressures many partners are facing as artificial intelligence continues to dominate customer conversations
The pressure is on the managed service provider (MSP) community to get to grips with artificial intelligence (AI) and help meet customer demand for support with AI.
The key finding from the latest MSP research from Barracuda Networks, The evolving landscape of the MSP business 2024, lifts a lid on the current challenges faced by the channel community.
The positives included the expectation that 45% of revenues would come from recurring revenues, an increase from the 35% last year. On average, most partners are also looking to introduce five new services in 2024, with the most successful concentrating on the security area.
The recurring revenue statistic is an important one, revealing a continued shift away from project work towards more long-term relationships.
There has been a clear engagement with marketplaces, with 88% indicating they are seen as crucial to their organisations and helping them simplify operations.
Almost 80% of those MSPs quizzed said they needed either significant or notable improvements in their knowledge and application of AI products and services. Just shy of 70% are feeling the pressure to offer customers AI insights and technologies.
The theme of some of the earlier Barracuda MSP surveys has been the concern the channel has about competition, and that remains on the list of challenges. Most are expecting growth this year, but more than half expect competition to increase.
Trusted advisor
Given that a significant number of MSP customers are scaling back on their internal IT resources, the challenge to be a trusted advisor is a growing one.
“MSPs need to remain agile to maintain their role as strategic partners to customers,” said Jason Howells, vice-president of MSP international sales at Barracuda. “The challenges they face are not only technological, but also commercial, such as increased competition and new routes to market.
“Further, the impact of the cyber skills shortage is being passed from companies on to MSPs,” he added. “Although providers are well placed to help, the findings show they face their own struggles to recruit and retain staff. The need to adapt to customer demand for AI products and services such as SOCs places additional pressures on MSPs but also offer immense potential.”
Howells said it also made sense for MSPs to work with suppliers that understood their challenges and armed them with the right tools and support.
“Building strong relationships with vendors that can offer this specialist expertise will help providers support customers in this fast-changing environment,” he said.
There is a clear opportunity for those MSPs that have the right levels of service capability, have developed security skills and can support the surge of interest in AI.
“In 2024, MSPs are strategic partners to their clients, helping them to address technology complexities and manage the security challenges of digital transformation,” said Richard Tubb, MSP growth consultant and MSP Day speaker. “The research shows that many MSPs are responding to shifting client needs by actively embracing new opportunities that will benefit clients as well as their own operations and business growth.”
