But considering high-profile breaches, why didn’t security sales spike that much?
Back in April, Channel Futures launched a benchmark survey to get a pulse of the top trends and opportunities in the industry during the first quarter of 2021. The MSP space experienced a dramatic shift following the coronavirus pandemic. We wanted to gauge how providers are faring now that the smoke has begun to clear. The survey results gave us good insight into the various aspects of how MSPs function, the challenges they face, and the services they offer. In particular, we noticed several trends around recurring revenue, cloud-related sales and security-related sales.
Coming “out” of the pandemic, it’s clear some MSPs were still able to grow their businesses. This was all despite familiar pitfalls, which include widespread shortage of talent and inefficient remote monitoring and management (RMM) tools. Of course, there’s also the constant threat of increasingly advanced cyberattacks. Looking ahead, given these findings, it appears MSPs are in a unique position to thrive in economic shake-ups, and drive value to customers.
|This marks the launch of Channel Futures’ series of quarterly MSP surveys. Keep your eye on this space for further breakdown of the numbers and what it all means to the greater MSP community.|
Our survey uncovered some of the key trends and impact the tumultuous year that was 2020 brought forth. Here are four of the key research findings gleaned from the survey, along with perspectives from industry experts.
We wanted to know how these smaller, privately held companies in the channel are performing. So we asked folks how recurring revenue in the first quarter of 2021 compared to the year-ago quarter. About one in eight (12%) of respondents said their recurring revenue increased more than 20% in the first quarter — an encouraging nudge upward. About 27% said recurring revenue was up by at least 11%. That shows there’s a good portion of the community having a pretty successful year.
We asked Jason Ingalls, founder & CEO, Ingalls Information Security. for his take on what that means.
“Recalling that the workforce all went to the WFH model in Q1 2020, this makes me wonder if a) Q1 was a great quarter in 2020 in terms of recurring revenue for many MSPs handling remote worker requests from lots of clients, and Q1 2021 has shown improvement over that spike as the economy heated up; or b) Q1 2020 was relatively flat and Q1 2021 mirrored it,” said Ingalls.
“It certainly indicates stability in an otherwise unstable 12-month cycle. And generally, people indicated they were doing better than a year ago,” he added.
“I see a direct correlation here to the reliance of leveraging outside resources to facilitate the changing landscape of technology departments,” said Chris Ichelson, CEO, 360 SOC. “Organizations are leveraging the channel more than ever in search of the guidance to address the “new normal.” I also see the reactive correlation in cybersecurity to the amount of breach media coverage.”
Where MSPs Are Adding Vendors
The sentiment among the MSP professionals we surveyed pointed overwhelmingly to security. When we asked in which sectors MSPs added vendors in the first quarter, more than a quarter (29%) cited backup and disaster recovery (BDR). Managed security also came in at 29%, with cloud storage coming in close behind at 24%. Other notable mentions included …