44 percent of managed service providers (MSPs) around the globe have stated that more than 50 percent of their revenue is currently the result of recurring services. This is the most important outcome of Datto’s latest annual State of the MSP Report conducted by technology market analyst firm Canalys. More than 1,600 of Datto’s MSP partners around the globe participated in this survey.

“The Canalys research also shows that more than 80 percent of channel partners around the world now offer some form of managed service,” said Alastair Edwards, chief analyst, Canalys. “To stay ahead, IT service providers must evolve their businesses, shifting towards more recurring revenue and greater industry specialization. Partnerships with the right technology companies and platform providers will be critical to success.”

SMBs in particular struggle with increasing IT complexity, an explosion in security threats, greater compliance demands, and intensifying skills shortages,” added Alastair Edwards. “More than ever, companies are turning to trusted IT partners to help solve these challenges.”

Healthcare Specialization

Alastair Edwards
“IT service providers must evolve their businesses, shifting towards more recurring revenue and greater industry specialization,” said Alastair Edwards, chief analyst, Canalys.

The survey results would highlight an industry shift from IT service providers solely modeled on ad-hoc services to becoming more strategic advisors to their SMB clients. In addition to taking on a more strategic role and expanding their solutions sets, 56 percent of MSPs specialize in services for a particular industry, with healthcare holding the number one spot for the second year in a row.

To keep pace with the growth in managed services, 71 percent of MSPs plan to hire more employees in the next 12 months. While marketing and sales remain the top challenges, the data would show that MSPs are becoming savvier about this aspect of their business.

“The survey shows what we see every day – it’s a great time to be an MSP. It’s a positively charged environment,” said Rob Rae, vice president of business development, Datto. ”Almost half of surveyed partners have been working in the industry for more than 15 years and nearly 100 percent of them said that right now is the best time to be in their industry. For more than a decade, Datto has been passionate about providing the right technology to MSPs, who support the backbone of the economy through their work with small businesses.”

State of the MSP Report

To read the findings of this State of the MSP Report, access report here.

With global headquarters in Norwalk, Connecticut, Datto has international offices in the United Kingdom, Netherlands, Denmark, Germany, Canada, Australia, China, and Singapore. Datto offers business continuity and disaster recovery (DR), networking, business management, as well as file backup and sync solutions. The company has created an ecosystem of partners that provide Datto solutions to half a million businesses across more than 130 countries.