The managed service provider (MSP) market has been steadily growing over the last several years. According to TechTarget’s annual IT Priorities survey fielded in January, 75% of end users intend to deploy at least one technology through a Managed Service Provider (MSP) in 2020. These deployments include mainstays for MSPs, such as network infrastructure and management (ranking #1) and backup (#4), as well as less obvious projects such as IT strategy/architecture/planning (#3) and machine learning (#9). The advantages of leveraging managed IT services include increased efficiency, reduced complexity, reduced risk, and a proactive rather than reactive internal IT team. What seemed like a good year ahead for MSPs in January became a turning point year in March due to the pandemic.
Market changes fuel MSP growth and value
Already seen as an asset by IT vendors, MSPs have become even more valuable channel partners during the pandemic. The 2112 Group’s COVID-19 Impact on the Channel report noted, “Social distancing and the sudden shift to remote workforces is causing vendors to assign increased value to MSPs, which are purpose-built for current operating conditions.”
The initial work done by MSPs during the early stages of the pandemic helped their customers make major shifts in their businesses at record speeds, including moving employees to work-from-home set ups, shifting from in-person sales to eCommerce, and reducing in-house staff. As companies have come through that initial retooling stage with their businesses intact, MSPs are being considered as more strategic partners by their customers. And as MSPs strengthen customer relationships and increase their influence over IT strategy and investment decisions, they become ever more critical to the success of IT vendors.
Diving into TechTarget’s audience research and purchasing data provides more clarity: From February to May of this year, we saw a 42% increase in audience activity in MSP-related content across the TechTarget network of sites, including SearchITChannel.com. Additionally, the percentage of confirmed technology purchases identified from April to June that were expected to be deployed via an MSP jumped significantly for a variety of technologies, not just those related to the pandemic:
- Conferencing/meeting rooms or Unified communications/UCaaS: up 631%
- DevOps tool chain: up 113%
- IT service management (ITSM): up 101%
- Contact center and customer service: up 76%
- Web security: up 73%
- SD WAN: up 54%
Despite growth, targeting MSPs remains a challenge for IT organizations
While many IT vendors are looking to increase their pool of managed services partners, the IT channel is in a constant state of transition as companies pursue more revenue from subscription-based managed services offerings. This churn makes it extremely challenging to accurately identify potential MSP partners. The first reason for this difficulty: businesses that generate less than 50% of their revenue from managed services may not yet identify themselves as MSPs. As a result, database companies and others that sell MSP contact information may have outdated and incomplete MSP lists. These lists often include companies that don’t even offer IT managed services.
The second challenge for IT vendors arises with how MSPs identify themselves to be most attractive to potential customers. With the increased use of cloud-based applications and services, many MSPs now identify themselves as cloud service providers and cloud solution providers (CSPs). According to TechTarget’s 2020 MSP Pulse Survey results, 54% of respondents transformed or plan to transform from an MSP to a CSP business model, and 38% have or will transform from a reseller/VAR to a CSP business model this year.
As a result of these challenges, most MSP targeting will fail if it doesn’t include the right audience environment, data and, more importantly, a verification process. IT vendors who want accurate and efficient sources for recruiting IT managed service providers will save time, effort, and resources by using verified, opt-in, 1st party intent-driven solutions, such as TechTarget’s Verified MSP Targeting, which gives you exclusive access to an active audience of in-market MSPs and CSPs.
Choose the right partner to help you effectively target MSPs and understand what matters to them
For IT vendors looking to differentiate their MSP partner programs, there are several areas where channel companies need help as they transition to managed and cloud service provider models. According to TechTarget’s 2020 MSP Pulse Survey, MSPs want: improved tech support, high-quality sales leads and help evaluating new services that they can quickly monetize. Unlike the VARs that many IT vendors’ partner programs are designed to support, MSPs appear less interested in sales incentives and contests, MDF, and special financing options.
As the IT channel continues to evolve through and beyond the pandemic, TechTarget will evolve our targeted data-driven solutions and unique mix of business and technical content on SearchITChannel.com to serve MSPs, CSPs and future iterations of channel companies that increasingly serve our audience of end user organizations.
To see the full results of TechTarget’s 2020 MSP Pulse Survey or learn more about our Verified MSP Targeting programs, please contact me here.
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