Rapid DX and record-high threat exposure sees security as greatest revenue opportunity for MSPs
Amid rapid digital transformation and record-high threat exposure, security remains the biggest concern for customers and the greatest revenue opportunity for MSPs, according to a new report from Barracuda.
Barracuda's 2021 Evolving Landscape of the MSP Business report shows that the appetite for managed services is stronger than ever, with many survey respondents identifying managed services as the biggest sales opportunity in the coming year.
To seize this opportunity, MSPs can identify areas in which to focus their growth and expand their offerings. This is particularly key for those that are in the early stages of their journey or those that were forced down a specific route due to the demands of the pandemic.
As part of this annual survey, Barracuda spoke to more than 400 partners from across the globe, with the combined answers indicating similar challenges for MSPs worldwide when it comes to service provisioning and meeting the complex needs of their customers. Data from the study also indicates that security remains the number one concern for customers and the leading driver for seeking out managed services.
According to the report, increasing security concerns and a growing remote workforce are driving the need for third-party service providers. 80% of respondents felt Overall Security was a significant business opportunity, but leading the field was Remote Work, which 90% saw as a lucrative opportunity.
The report found many MSPs are growing their services portfolios. 59% of respondents said they had expanded their services portfolio in the past 12 months.
Security is now the top driver to services. This year security concerns were listed as the main driver behind SMBs adopting managed services, followed by the increasing complexity of IT. In 2020, it was the opposite.
Security services are becoming increasingly important for MSPs, the report says. Five security-based services endpoint security, email security, network security, server security, and endpoint monitoring all made the top five services in 2021. This is one more than in 2020, and four more than in 2019.
The hybrid approach is still popular, but services are accounting for more business growth. 59% of respondents said they expect services to account for 50% or more of their revenues this year, with 39% saying they expect to generate up to 50% of their overall business through services.
Thanks to a rapid rise in digital transformation, remote work adoption, and ransomware attacks all driven by the COVID-19 pandemic and economic disruptions over the past year this report points to security as the safest bet there is for business growth.
Couple this with a lack of skills and resources among end-user customers and the increasing likelihood that the workforce will never return to the old normal, and its clear that MSPs will have a lot of opportunity in 2021 and beyond.
They will also need to be proactive about security. Respondents said proactivity is a key requirement when moving to a security-centric services model, along with ensuring customers are fully protected with the right solutions.
"Since founding the annual Evolving MSP Landscape report, we've seen the MSP market adapt and boast more opportunities than ever, and this year is no different," says Brian Babineau, SVP & general manager, Barracuda MSP.
"The appetite is there, certainly among those that have fallen victim to cybercrime as they've adjusted to remote working, and its now up to MSPs to engage with these customers, offer the skills and knowledge they're lacking, and become a trusted service provider," he says.
"In turn, MSPs need reliable vendors that are able to support and value them, offering them everything they need to create the best possible services for their customers," adds Jason Howells, VP international sales, Barracuda MSP.