It’s a good time to be an MSP. Markets and Markets predicts the global managed services market will grow to $242 billion by 2021 at a compound annual growth rate of 10.8 percent. MSPs have high expectations for the impact this growth will have on their businesses.
According to CompTIA’s 5th Annual Trends in Managed Services report, half of the service providers surveyed predict that the managed services portion of their business will undergo high growth over the next two years and make up 75 percent or more of their total annual revenue. Another 45 percent of respondents expect to see managed services increase and account for at least half of their total revenue in the same time period.
The CompTIA study also found that managed services is the second most popular business model in the IT channel, second only to IT solutions or projects that include elements of hardware, software, and services. Managed services ranked ahead of other business models such as VAR/reselling, IT support and help desk, and consulting services.
Benefits of transitioning to managed services
As the data stacks up showing the potential of the managed services business model, it’s no surprise that more and more firms are looking to make the transition.
According to the CompTIA study, respondents pointed to a number of drivers motivating them to make the transition to managed services.
1. Improve service utilization rates
2. Increase sales revenue
3. Protect customer base
4. Minimize financial risks
5. Expand wallet share with existing customers
6. Build recurring revenue streams
7. Control all aspects of an offering
8. Get to market quickly
But transitioning to managed services from a different business model can be challenging as firms work to adapt their skillsets, revenue models, customer conversations, and even their sales and marketing strategies. For many service providers that means the transition is still a work in progress.
As the CompTIA report puts it, “While largely touted as a channel panacea to declining hardware sales, a full pivot to managed services remains a target for many channel firms that today remain a mix of older business models and new recurring revenue models.”
Ready to learn more?
Here at Intronis MSP Solutions by Barracuda, we’re committed to helping our Partners make the transition to the MSP model successfully. That’s why we’ll be hosting The Path to Managed Services Success – A Panel Discussion on Wednesday, April 19 at 2 p.m. Eastern Time.
This webinar will feature Neal Bradbury, senior director of business development for Intronis MSP Solutions; Brent Fairbanks, owner of Electronic and Computer Specialties, Inc.; and Corey DeGrandchamp, owner of Computing Technologies. Brent and Corey are both at different stages in the transition to the managed services model, and they’ll share their perspective on the lessons and insights they’ve learned along the way.
Whether you’ve started your transition from a VAR or break-fix model or are just beginning to explore the possibilities, join us for the webinar and gather some valuable advice and actionable ideas that will help you achieve your immediate and long-term goals.