MSPs’ Strategic Investments in Business Consulting and Planning are Paying Off
In today’s rapidly evolving technology landscape, businesses face the dual challenge of staying ahead of emerging trends and mitigating risks associated with an increasingly complex digital world. To address these challenges, Managed Service Providers (MSPs) are playing a pivotal role.
Recent findings from the TD SYNNEX 2023 MSP Special Report shed light on how MSPs are strategically investing in business consulting and planning, and the impact of these investments on the IT ecosystem. This new special report is a supplement to the TD SYNNEX 2023 Direction of Technology Report and focuses on the survey respondents that identified themselves as MSPs.
Positioning for Growth through Business Consulting and Planning
The TD SYNNEX report reveals that MSPs are making substantial investments in business consulting and planning. In fact, 65% of MSPs surveyed listed business consulting and planning as their top investment priority.
This indicates that MSPs recognize the importance of not only providing technical solutions but also aligning them with their clients’ broader business goals. In a world marked by rapid technological change, MSPs are taking concrete steps to ensure their financial success.
Sergio Farache, Chief Strategy Officer at TD SYNNEX, emphasizes the need for strategic planning and business development within the MSP landscape:
“These results track with how we view the MSP partner journey and growth strategy. The MSPs we work with cite the critical need for strategic planning, business development, alongside training and enablement to leverage the opportunities presented by lucrative high-growth technologies. With the current pace of change across the technology landscape and geopolitical instability, it is clear MSP respondents are focused on pulling the right levers to ensure their financial success. Our MSP Special Report was purpose built for MSPs to provide important insights that help inform and grow their businesses.”
Expanding Solution Offerings for Growth
Besides business consulting and planning, 80% of MSPs consider expanding their solution offerings as crucial for growth. This reflects MSPs’ awareness that diversification of services is essential to meet the ever-evolving demands of their clients.
Simply put, clients are no longer only looking for IT support; they seek partners who can guide them through the digital transformation journey.
MSPs understand that success depends on their ability to adapt to the fast-paced technology landscape, and by expanding their solution offerings, they can stay at the forefront of emerging technologies and offer comprehensive solutions to their clients.
As part of these shift, MSPs have identified key areas that have driven revenue and growth over the past 12 months. Networking and security have been the top revenue drivers, with 28% and 27%, respectively. However, looking ahead, MSPs anticipate the most significant growth in Data Analytics (37%), Artificial Intelligence/Machine Learning (37%), and Augmented Reality/Virtual Reality (31%).
Key Trends Driven by MSPs and Impacting the IT Ecosystem
The TD SYNNEX MSP report, which was conducted in partnership with Canalys, identified three key trends:
- Skills Gap Challenges: MSPs continue to face challenges related to the skills gap, especially when hiring for high-growth technology expertise. Talent recruitment and retainment (46%), ongoing technical education (33%), and keeping up with rapid technological changes (45%) are among their top challenges. MSPs are actively seeking professionals with expertise in Data Analytics (33%), security (26%), networking (24%), and AI/ML (22%), aligning their hiring priorities with the areas they anticipate will drive revenue in the coming years.
- Revenue Growth Expectations: The survey findings indicate that MSP revenue expectations align with wider channel expectations. MSPs are prioritizing growth through a combination of acquisition and organic growth, global expansion, new technology offerings, and new vertical markets.
Three quarters of MSPs ranked as very important or important, growth through acquisition (73%) or organically (77%), while less than half (47%) cited actively seeking a buyer as important. Approximately 70% of respondents say that global expansion (69%) and entry into new vertical markets (66%) are important or very important. This is in addition to the 80% who noted that expanding their solution offerings was important or very important.
And 75% of respondents expect revenue growth in 2023 and beyond. MSPs derive an average of 20% of their revenue from the sale of managed services, compared to 15% in the overall channel. - Regulatory pressures are real, with ESG (Environmental, Social, and Governance) jumping in importance: MSPs are dealing with regulatory pressures, particularly concerning Environmental, Social, and Governance (ESG) standards. Rapid regulatory change (36%) and meeting and documenting ESG standards (34%) are challenges to their business.
Data protection (72%) and cybersecurity (54%) currently top the list of concerns but are expected to be overshadowed by ESG (42%) in two years, compared to data protection (35%) and cybersecurity (38%).
Navigating the Complex IT Ecosystem
The findings of the TD SYNNEX MSP Special Report highlight the dynamic nature MSPs and their role in the IT ecosystem. MSPs are evolving to provide not only technical solutions but also strategic guidance and business alignment. As businesses look to adopt new technologies and adapt to regulatory changes, they rely on MSPs as trusted partners.
“This data underscores the competing needs and priorities for MSP growth, as well as the challenges to that growth, TD SYNNEX’s unrivalled market insights, specialized solutions, deep industry relationships and global reach help MSP leaders cut through complexity, guide to higher growth opportunities and help them flourish today and long into the future,” said Jill Kermes, Corporate Vice President, Global Corporate Communications and Citizenship.
The role of MSPs in the IT ecosystem is continually expanding and evolving. MSPs are not just service providers but strategic partners who help businesses navigate the challenges and opportunities presented by the ever-changing technology landscape.
Through strategic planning, expansion of solution offerings, and adaptability to emerging trends, MSPs are poised to play an even more significant role in shaping the future of IT. As they continue to invest in business consulting, planning, and new technologies, MSPs position themselves as indispensable assets for businesses looking to thrive in the digital age.
Download the MSP Special Report, as well as the full 2023 Direction of Technology report.
