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By
July 20, 2021

MSP Growth Trends for 2021 and Beyond

The proliferation of cloud technology, sophisticated cyber threats, shortage of specialized talent, shrinking IT budgets, and the need for complex IT operations to drive business growth are causing businesses large and small to outsource1 a wide range of their projects. Small businesses are partnering with Managed Service Providers (MSPs) that offer more sophisticated services than standard help desk support, while large enterprises require MSP partners with specialized expertise that can help augment their in-house operations.


MarketsandMarkets, a market research firm estimates the global managed services market is expected to grow from $US 223.0 billion in 2020 to $US 329.1 billion by 2025. While this is welcome news for MSPs, evolving business needs are changing what and how they must market and sell to stay relevant.


Let’s look into six MSP trends for 2021 and beyond.

 

1. 5G Security-as-a-Service Offerings

5G has been a buzzword for the past few years now; this year, it is all set to go mainstream. There’s no doubt that the efficiency gains offered by 5G will accelerate business and boost consumer satisfaction. 5G will present MSPs with strong opportunities for revenue growth through increased bandwidth and lower latency, which is anticipated to lead to higher customer acquisition and retention. For MSPs, adding cybersecurity as a value-added service to 5G packages is a win-win solution that will protect subscribers and also contribute to the bottom line. Many MSPs are looking to move in this direction, and this trend is expected to grow; delivering a more secure and protected experience for customers, as well offering faster speed, lower latency, better connectivity, and a significantly higher density than the 4G networks.

 

2. XaaS (Everything-as-a-Service)
Businesses understand that in order to meet today’s challenges and achieve future objectives, a digital transformation is essential. However, most lack the financial or human resources to build out their own solution. As a result, MSPs are ideally positioned to support this growing demand.

Everything-as-a-Service enables MSPs to extend services beyond basic malware prevention services, low-margin end-user technical support and SaaS applications to high-margin infrastructure integration, fully managed cloud solutions and 24x7 proactive network monitoring. Selling IT solutions on value rather than on price not only enables MSPs to increase their margin, but also provides them with a competitive differentiator while increasing the stickiness of their services.

 

3. IoT (Internet of Things)

Internet of things (IoT) emerged as a concept about 2 decades ago and is now making headlines around the world. The number of connected devices in 2021 is set to hit 46 billion according to Juniper Research’s latest report.

 

This “Internet of Everything” culture is driving the need for increasingly complex cloud environments. Sophisticated multi-cloud and hybrid-cloud infrastructure needs call for a specialized team knowledgeable in the development, deployment, and management of new IoT infrastructures.

 

Such complex environments require continuous monitoring, maintenance, and management by a technology partner proficient in connected IT environments such as a MSP. The addition of IoT-specific specialization to a MSP’s suite of management services will enable them to grab their share of the growing IoT market.

 
4. MSP Integration and Automation

Mergers and acquisitions (M&A) in the MSP community are mushrooming as many large MSPs seeking geographic or industry expansion acquire smaller providers. Small MSPs with the aim of offering a full suite of managed services are establishing strategic alliances with other MSPs who provide complimentary services or have additional expertise in security or other areas of specialization.

 

Although expansion, service differentiation, and extensive technical expertise can be developed in-house over time, M&A opportunities enable MSPs to scale services more quickly, acquire expertise more cost-effectively, and enter new markets with a competitive edge.

 

An M&A strategy however is only the first step for MSPs who choose this growth path - effective integration and automation of business operations will further promote efficient processes and competitive advantage. Automation and IT integration across all departments greatly improves efficiency, enabling staff to automate day-to-day manual tasks and focus their time and energy on higher value, revenue-generating projects.

 

5. Shortage of Specialized Talent

A lack of in-house IT professionals with sufficient expertise has driven companies to MSPs with specialized talent. The knowledge in security and custom cloud implementations that MSPs possess enable them to provide comprehensive technical know-how to small businesses short on IT staff. It also allows them to extend their specialized expertise to larger enterprises seeking to infuse their in-house IT team with broader knowledge, so that their staff can focus on more strategic projects.

 

6. Transitioning from MSP to MSSP

While the focus on day-to-day operations will remain, organizations also require an MSP to help them manage their security woes. And since cybersecurity is increasingly becoming a core part of everyday operations, MSPs will be looking to deepen their expertise in this area. Owing to their specialized nature, MSSPs2 are able to provide a much higher level of security than MSPs, helping organizations implement complex security procedures. In addition, MSSPs offer 24x7x365 network monitoring to detect and respond to vulnerabilities across the organization’s entire infrastructure well before they can be exploited.

 

How Nexusguard can be your partner in the MSSP transformation process

MSP customers’ business and security needs are constantly evolving, requiring MSPs to transform their Managed Service Provider business model more effectively to meet today’s market trends. A partnership with Nexusguard is the perfect differentiator - through its Transformational Alliance Partner (TAP) program, MSPs can not only tap into the fast-growing DDoS mitigation market to increase revenue, but also elevate their brand position to meet their customers' growing demands for cybersecurity products. 

 

Furthermore, the entire provisioning and onboarding process will be led by Nexusguard’s specialized team, so that MSPs can deliver a suite of fully productized and managed services to their customers in as little as 90 days, hassle-free. 


For more information on becoming a partner of Nexusguard’s TAP100 program, visit https://www.nexusguard.com/tap100.

 
 
1According to Forrester Consulting, which was recently commissioned by Intel to survey IT decision-makers at SMBs on their outsourcing approaches, and Gartner (May 2021).
2MSSP is an acronym for Managed Security Service Provider - a type of IT service provider whose primary focus is cybersecurity.

MSP customers’ business and security needs are constantly evolving, requiring MSPs to transform their Managed Service Provider business model more effectively to meet today’s market trends.