MSPs are facing flat growth and fast-changing client needs. Here’s where they stand during COVID-19 pandemic.
MSPs face new challenges and opportunities as the results of the COVID-19 pandemic. That’s according to a survey conducted this month by Datto. The results of the survey were compared to Datto’s 2019 State of the MSP Report published last May, to see what has changed for MSPs since the onset of the pandemic.
The coronavirus pandemic has turned the world upside down. Every industry has seen massive and sudden change from an oil crash to a surge in demand for video conferencing software. MSPs have had to adapt to fast change and increasing market pressures too. While there are several strong challenges, there are also new opportunities.
“The COVID-19 pandemic forced an immediate shift to remote access and work-from-home solutions, and with the initial wave of work-from-home setups complete, MSPs see improvement of those remote access solutions, security, and cloud migrations as the top opportunities through 2020,” said Ryan Detwiller, senior director, customer insights and analytics at Datto, a business continuity and disaster recovery provider.
Below is a comparison of the two Datto surveys’ top findings on MSP challenges and opportunities.
Pre-COVID-19 (2019 State of the MSP Report)
Top 3 challenges: marketing and sales, work/life balance, revenue growth
Opportunities: MSPs report RMM, cloud storage management, productivity software, business continuity and disaster recovery (BCDR), and professional services automation (PSA) among the solutions that positively impacted them the most last year.
Post-COVID-19 (April 2020 survey)
Top 3 challenges: revenue growth, client financials, adjusting to client needs
Opportunities: Cloud and security solutions were already in high demand, but MSPs see that only accelerating during the pandemic. A remote workforce opens new security vulnerabilities for SMBs, and cloud migrations offer an opportunity to improve collaboration and business resiliency across a distributed workforce.
COVID-19 induced stressors on MSPs are primarily financial, according to the Datto survey. Those financial concerns include finding new sources of revenue, ensuring their clients have the ability to pay, receivables, and cash flow.
“Prior to the pandemic, MSPs were predicting an average of 20% annual growth over the next three years; now those have been adjusted downward by an average of 11% for the remainder of 2020, leaving many MSPs at flat or marginal growth,” said Detwiller.
“However, MSPs focused on harder-hit verticals will likely see revenues decline in the short term. The pandemic has also made it challenging to complete on-premises project work and face-to-face sales meetings, making onboarding new clients a challenge,” Detwiller added.
The long-term impact is still difficult to predict given the virus is still surging and government policies are staggered and stumbling. But Datto does see a few early indications beginning to form.
“It may be too early to tell what the long-term shift is: A number of MSPs are waiting to see how the situation unfolds and how current infrastructure and internet services hold up, but they expect SMBs to realize their reliance on their IT provider and disaster recovery plans,” said Detwiller.
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