The managed services provider (MSP) market continues to get more competitive as organizations of every size and stripe look to outside help to support their operations. If you’re an MSP, growth opportunities are more significant than ever, as Gartner predicts that the IT services market will reach $1.8 trillion in 2022. Understanding today’s trends and tomorrow’s demands is crucial if you’re going to capture more of that available market by differentiating your company from your competitors. With that in mind, let’s look at some substantial shifts that will shape the MSP market this year.
1. MSPs Become MSSPs
Traditional MSPs recognize the value they can offer customers—and the money they can make— by expanding their offerings beyond IT services to include cybersecurity management. And it’s a sound growth strategy, with a recent study of more than 5,000 IT professionals finding that 70 percent of those surveyed planning to outsource at least part of their security operations to an MSSP (managed security services provider) or MSP.
That will undoubtedly add to your competition, as other MSPs see the same opportunity. But there’s plenty of available market share for savvy MSPs, as only 17 percent of the 40,000 MSPs operating in North America today are already MSSPs.
Security will also shift to MSPs because ransomware poses a huge threat, with attacks more than doubling in 2021. MSPs that don’t make the move to becoming an MSSP can risk losing customers and even their entire business. MSPs that make the move can leap ahead of the competition and grow their business by helping customers prevent attacks and protect their critical data.
2. Immutability is the New Buzzword
Not every IT worker understands what immutability means. That’s changing fast, and immutability will be on the tip of every IT pro’s tongue as they encounter this buzzword more and more. The reason is simple: Immutable backup data is the best defense against cyber hackers because the backups can’t be altered or deleted. By continuously taking snapshots of your data every 90 seconds, your customers’ data is protected and can be recovered with confidence.
Snapshots give you point-in-time data recovery capabilities, so you can use them to roll back to the latest file that is uncorrupted. And Immutability even safeguards your data against downtime and data loss due to human error, hardware failure, ransomware, or a natural disaster. With immutable backups, you can ensure your customers always have uninterrupted access to services and operations. Immutability has become so prevalent that many countries are mandating immutable backup storage for their government agencies.
3. Getting Cyber Insurance Will Be More Challenging and Costly
Companies have increasingly turned to cyber insurance to protect themselves against the losses and penalties of a data breach or other cyberattack. But cyber insurance is getting harder and harder to get, and premiums are rising by as much as 100 percent. As a result, insurance companies will be limiting the amount of cyber insurance they book—and will also be very selective as to which companies they insure. Some may even exclude ransomware insurance coverage for renewing customers. The result? Companies will need to invest more in cyber prevention and cybersecurity tools and processes to prove they are a worthwhile insurance risk.
While this means MSPs will need to show they are accountable and transparent to insurance providers—or risk losing their insurance—it also is an opportunity to offer higher levels of security for themselves and their customers. That is a true competitive advantage.
4. MSP Consolidation Will Continue
Private equity is one of the driving forces behind the trend toward MSP consolidation. Many MSPs founded over the past two or three decades have been highly successful. Their founders are ready to cash out, and private equity has the money in hand. We’ll also see larger MSPs acquire smaller MSPs to accelerate growth and enter new markets.
MSPs that have transitioned into becoming MSSPs are a more attractive acquisition target. That’s one reason to make the change, But one of the most important reasons is that, while the MSP market is projected to grow by 8 percent this year, the MSSP market will see nearly double that growth rate at 15 percent. That spells opportunity.
Become an Arcserve Partner
If you’re an IT pro at an MSP or MSSP, Arcserve has the world-class data protection and management solutions you need to ensure your customers’ success. Learn more about becoming an Arcserve technology partner today.
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