Examining Datto’s 2018 Global State of the MSP Report


Thought Leadership

Examining Datto’s 2018 Global State of the MSP Report

Teresa Zwierzchowski

In today’s complex digital landscape, businesses need managed service providers (MSPs) more than ever. But what do MSPs require in this marketplace?

Datto, a leading provider of MSP-delivered IT solutions and a tech partner of AppRiver, conducted a survey of 2,300 managed service providers to find out more about their day-to-day lives, from the businesses they run to the challenges they face. The results, published in Datto’s 2018 State of the MSP Report, are enlightening. We’ve highlighted a few of the findings here and added our takeaways:

Finding: 75 percent of MSPs still offer break-fix.

Obviously, managed service providers prefer the security of long-term contracts that not only bring stability to their businesses, but also deliver proactive solutions to their clients. Break-fix is purely reactive and positions MSPs as one-off vendors rather than true IT partners—which is often what clients need to avoid break-fix in the first place. However, turning down business is not easy, hence the result that three-quarters of MSPs are willing to offer break-fix. If you are in this majority, deliver your best possible service on calls and tout your business as a smarter alternative to having a client call you only in the event of emergency.

Finding: MSPs run the range of industries.

The Datto report asked what top industries/specialized services MSPs target. Respondents could pick more than one industry, and the leading choices were:

Healthcare, 53 percent Finance, 49 percent Manufacturing, 48 percent Legal, 45 percent Nonprofits, 44 percent Construction, 39 percent Education, 32 percent Real estate, 30 percent Government, 24 percent Startups, 21 percent

These results confirm that MSPs are needed by a wide variety of businesses. Although focusing on a certain space can be beneficial in building a reputation and a brand, knowledge of many industries also provides opportunities. MSPs skilled in healthcare IT may be in demand, for example, but also focusing on law firms or nonprofits—two industries in which businesses often don’t immediately consider, “Who will make sure our computers work?”—can open additional doors.

Finding: 60 percent of MSPs have 1-100 clients.

The flip side of this result is that only 20 percent of respondents have more than 300 clients, and just 8 percent have more than 500. Plenty of MSPs are catering to small and mid-sized businesses (SMBs)—and many MSPs are SMBs themselves—so you need to stand out by delivering outstanding service.

Finding: 26 percent of global MSPs say ransomware/cybersecurity is a big challenge.

Respondents were asked what their biggest challenges are and could pick more than one answer. Marketing came in first at 53 percent, followed by staffing/training at 41 percent and growing pains at 28 percent. Cybersecurity came in at fourth, but that doesn’t mean it should be underestimated. If, for example, potential clients are being burned by ransomware, you can market your expertise in mitigating such attacks, train staff to handle threats, and build your business to include this focus. Alternatively, marketing, attracting top talent, and expanding your company becomes more difficult if you struggle to protect clients from ransomware and other security dangers that threaten their bottom line.

The report also delved into the pain points some MSPs have with overall cybersecurity, including ransomware:

Lack of cybersecurity awareness Increase in ransomware attacks Justifying the cost of business continuity and disaster recovery (BCDR) Sophisticated phishing scams

The report notes, “For MSPs, [ransomware] can be a massive opportunity to be the hero as long as you pitch it the right way.” Although the survey respondents indicated that marketing is their most pressing challenge, MSPs that can successfully solve multiple pain points will be well-positioned in today’s marketplace.

Finding: 68 percent of respondents prefer Star Wars over Star Trek.

Well, duh! Our only surprise with this is that the number was as low as 68 percent. However, if we ever see Ewoks or Jar Jar Binks again in a Star Wars movie, we can’t promise we won’t reconsider this position …