Strategic Managed Service Providers: Supporting Business Planning and IoT Services
Managed service providers (MSPs) have undergone a transformation, expanding their offerings to include services that support strategic and longer-term business planning. These services now include digital transformation consulting, compliance audits, technology roadmaps, and needs assessments. Additionally, MSPs have found new opportunities in providing internet of things (IoT) services, with 50% of MSPs recognizing IoT as a significant revenue opportunity, according to CompTIA.
The benefits of partnering with MSPs go beyond improved security, efficiency, and reduced costs. MSPs offer flexibility and scalability through variable billing, providing additional revenue opportunities for the MSP while offering customers the flexibility to adapt to changing business needs. MSPs also provide access to top technical and industry expertise, investing in technologies and expertise that individual companies, especially smaller ones, may not have access to. Furthermore, MSPs bridge talent gaps by offering access to skills that clients may lack, such as legacy systems expertise. Lastly, MSPs enable faster technology adoption by providing cutting-edge applications even when a company lacks the staff to implement or utilize them.
The current state of the MSP market is promising, with projections indicating significant growth. According to Mordor Research, the managed services market is expected to reach $380 billion by 2028, up from $260 billion in 2023. This growth is driven by increased adoption of the MSP model among small and medium-sized businesses (SMBs) looking to outsource non-core IT systems and functions. The “Evolving Landscape of the MSP Business Report,” commissioned by Barracuda Networks, highlights the increasing complexity of IT and the deployment of internal IT resources to other projects as key drivers for SMB adoption of MSPs.
Vanson Bourne’s research reveals the top 10 services and solutions currently offered by MSPs. These include security operations centers (SOC), cloud-based applications, managed detection and response (MDR), extended detection and response (XDR), backup, business continuity, and disaster recovery, network security, cloud-based infrastructure, business applications, productivity applications, and network monitoring and management. While cloud-based infrastructure offerings have seen a slight decline due to reduced demand for remote and hybrid working support, MSPs still face challenges in navigating these environments at client sites, increased competition in the market, and keeping up with tech trends.
To drive growth, MSPs are focusing on offering new services. The 2023 Global MSP Benchmark Survey Report from Kaseya reveals that 61% of MSPs prioritize offering new services. Many MSPs have already added up to three new services in the past two years, with some adding four or five new services. Furthermore, the IoT market for MSPs is expected to grow by 28% until 2028, according to Mordor Research. Additionally, there is a projected 60% increase in the adoption of AIops among MSPs, as reported by OpsRamp. Analyst Cem Dilmegani from AIMultiple also predicts significant use of generative AI by MSPs in the coming year.
The job opportunities within the MSP industry are diverse, catering to IT professionals with various experience levels and skill sets. MSPs specialize in different industries or technologies, resulting in a wide range of roles such as IT support specialists, service delivery managers, network operations technicians, systems administrators, security analysts, cloud architects, and more. MSPs also hire IT professionals for roles tailored to specific vendor solutions like VMware and Oracle. Working for an MSP offers IT professionals the chance to gain experience across multiple industries and provides more geographic options due to the prevalence of remote staff.
Salaries at MSPs are comparable to those at enterprises, with slight premiums due to competition for skills and business models that accommodate them. MSPs are also heavily investing in artificial intelligence and machine learning to capitalize on the growth potential of their client bases.