31 Aug Managed IT Service Providers See Growth and Significant Challenges Ahead
IT Managed Service Providers (MSPs) expect significant revenue growth for the next two years, yet face significant challenges from cloud computing, employee retention, and margin erosion. These are some of the findings in a recent CompTIA report. The nonprofit association for the technology industry surveyed 400 MSPs in the United States in March 2016.
Here are some things they learned that are causes for optimism:
- Nearly 90% of MSPs have been offering technology services for two years or more.
- 67% of MSPs consider themselves to be experts in providing IT managed services.
- 30% of companies say that managed services is their largest line of business.
- 50% of MSPs expect high revenue growth over the next two years, with services accounting for 75% or more of total revenue.
Here are some responses that may cause MSP owners to lose sleep:
- Slightly over 50% of respondents are worried about the erosion of profit margins caused by competition and commoditization.
- 62% of MSPs are worried about cloud computing, especially if customers end up working directly with cloud providers.
- 54% of MSPs offer cloud-based solutions and services as strategic offerings.
- 44% of MSPs only support cloud services when requested.
- In the area of employee turnover, over 50% of MSPs say in the past year they’ve lost at least one technical staff member to a customer, perhaps in search of less stress and more stable hours.
CompTIA’s Fifth Annual Trends in Managed Services report is available to CompTIA Premier Members at www.comptia.org .