Keeping a finger on the pulse of the managed service provider (MSP) industry is essential for maintaining your competitive edge when it comes to your sustained profitability and reputation.
Here are the biggest industry trends to pay attention to over the next few years.
1. Market Growth and Consolidation
Experts predict that the global MSP market value will increase at a compound annual growth rate (CAGR) of 23.6% between 2023 and 2030.
Consolidation is quickly becoming a major trend within the market, increasing by 54% in the last quarter of 2023 alone. While mergers and acquisitions (M&A) can be challenging, it does come with some major business benefits:
- Expanded service offerings: Partnering with a company that offers products and services you don't helps you attract more clients and add value for your existing ones. Plus, new service offerings means new opportunities for revenue generation.
- Larger customer base: When your MSP merges with another business, you gain access to a whole new group of clients. This growth can significantly boost revenue and give the new business a competitive edge in the market.
- Economies of scale: Combining companies enables you to leverage your new scale to save money on procurement, employee support, internal technologies and more.
2. Technological Advancements and New Service Opportunities
The breakneck rate at which technology changes is revolutionizing the business world, and that goes for IT companies as well. Leveraging efficiency-boosting tech tools can help your MSP add value to your offerings and improve the customer experience.
Some of the most important technologies for boosting MSP productivity will include:
- Artificial intelligence (AI): Generative AI models like ChatGPT and Google's Gemini can help MSPs streamline workflows and analyze data much faster than a human can, enabling your company to deliver consistently efficient service.
- Machine learning (ML): ML is an AI technology that enables the algorithm to learn from previous experiences, continuously improving results and creating a more effective algorithm.
- Automation: Workflow automation tools enable you to reduce the amount of manual and repetitive tasks your employees have to handle in their day-to-day operations, saving valuable time and freeing them up to take on more troubleshooting and customer-facing tasks.
3. Adapting to the Remote Workforce
According to a recent survey from McKinsey, office attendance is down roughly 30% from pre-pandemic levels. It's clear that most employees prefer flexible work options, like remote or hybrid work, to having to come in each day.
The thing is, remote work can increase companies' risk by opening up more endpoints outside their network — and many of their employees are unfamiliar with cybersecurity best practices. Investing in a strong cybersecurity training platform can help your clients' end users understand the common signs of an attack, helping them more effectively mitigate their risk.
IoT and Distributed Networks
The Internet of Things (IoT) is another major innovation that will revolutionize how the MSP industry operates. It consists of a vast network of internet-connected devices, such as sensors, wearable technology, smart grids and more.
Connecting so many devices opens companies up to greater cybersecurity risks, simply due to the number of new endpoints they're adding to their networks. Your clients can outsource their remote IT needs to your MSP to keep their in-house IT needs low without impacting their scalability.
Preparing for Future Challenges: Tips and Tricks
The future can be intimidating, especially since market projections are just that — projections. Fortunately, you can keep running strong if you know how to get ready for change.
These tips and best practices can help your MSP survive the coming years by taking preparatory actions now.
Incident Response and Disaster Recovery
Did you know it can take companies weeks to months to completely recover from a cybersecurity incident? Without proper preparation and planning, organizations can suffer unpredictable lengths of downtime as they confirm their data and rebuild their defenses.
Because your clients trust you to protect their sensitive data, business continuity preparations are critical:
- Incident response planning: An incident response plan (IRP) outlines the steps you'll follow to neutralize and recover from a cybersecurity incident, including information about who is responsible for each action. You can also provide IRP consulting services to customers to add more value for customers.
- Disaster recovery: Disaster recovery is essential for preserving mission-critical data from erasure in emergencies like natural disasters and data breaches. Offering a disaster recovery service can help your customers get back on their feet right away in the event of an outage or cyberattack.
- Cybersecurity training: Security awareness training is crucial for preventing cybercriminals from exploiting human weaknesses. An engaging, user-friendly training and simulation platform like Phin Security can significantly reduce the risk of an attack by teaching users exactly what to do when they detect a threat.
Cost Management and Service Scalability
As we know, costs have risen steadily over the past few years — and while the future is still unknown, it's always good to prepare for high future operational expenses.
Your MSP provides services that can help your clients grow their businesses without racking up excessive costs. Here's how:
- Reduced labor costs: By outsourcing key IT tasks to your company, your clients can eliminate the need to maintain an in-house IT department, reducing labor costs and boosting profitability.
- Data analytics: Offering advanced analytics and similar AI capabilities gives your clients valuable insights into their IT performance and business processes, enabling them to continuously improve their performance and enhance the customer experience.
- Scalability: Working with an MSP gives clients the resources they need to take on more customers, which helps boost profitability and grow the business. Plus, clients can purchase more services from you to keep their businesses running strong as their needs change.
Stay Calm
It's easy to catastrophize when new technologies like AI and other automated tools come onto the scene. Employees are concerned about their jobs, stakeholders worry about their investments and your business might need to undergo radical changes to keep up with the competition.
Here's the thing, though — the human touch will always be essential for a quality customer experience. Even though AI has many promising applications for simplifying the workflow and boosting efficiency, it's still just a tool for improving your business.
So take a deep breath and prepare your MSP to face the future head on. With the right strategy and tools, you'll be able to stay competitive for many years to come.
Phin Security Can Help Your MSP Face the Future With Confidence
If you're looking for a way to position your MSP for the best possible business outcomes, partnering with Phin Security can help you get there.
Our informative and engaging cybersecurity training platform has multiple levels of lessons and simulations to meet employees at their level of understanding. Plus, advanced user analytics enables supervisors to monitor employee progress in important topics like identifying phishing emails and responding to threats.
Make sure your MSP is ready for the industry's new era. Contact us today to request your free trial.
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