That’s according to software company N-able’s inaugural MSP Horizons report, which was carried out in partnership with analysts Canalys and examines some of the disrupting trends for 2024 and how MSPs can drive growth moving forward.
The study, which was conducted between October and November 2023 and sought feedback from 354 business-to-business channel partners, unveiled at the Beyond the Horizons event, found that MSPs are on a solid growth trajectory, with 97 per cent of those surveyed citing managed services revenue growth this year.
It also revealed that more than 335,000 global IT channel partners selling managed services reported revenue of $419 billion for the fiscal year 2023.
In terms of challenges, new customer acquisition, budgets and skilled topped the list for respondents.
Despite a decline in channel M&A activity in 2023, 44 per cent of partners said that they may look to acquire a business in the next three years.
As far as opportunities are concerned, more than 80 per cent of respondents cited growth in cybersecurity managed services. And four of the six biggest opportunity areas over the next three years are managed detection and response, network security, endpoint security and vulnerability scanning.
Cloud and endpoint management also featured highly — however, 66 per cent of those surveyed reported they are embracing a hybrid model and that there is still a place for on-premises, with only 7 per cent saying it was “dead”. In addition, the research revealed that while a unified approach to monitoring and management is gaining traction, the traditional remote monitoring and management is still at the core of the MSP model. When it comes to RMM, respondents cited the need for more integrations, such as embedded endpoint detection and response and other security functions, and the ability to operate seamlessly within the RMM.
And despite a constantly changing MSP landscape, more than half of those surveyed said that they are fully embracing the new ecosystem model, taking on more co-managed opportunities, co-partnering, and hybrid approaches.
When it comes to AI, 88 per cent also said that they use it as an embedded feature of their existing toolset and want more embedded AI features. A majority said that they are using it for content generation, but automation across cyber, backup and data analytics is also in high demand.
Canalys’ chief analyst, Jay McBain, said: “MSPs around the world are about the most optimistic of any of the business areas we cover. 65 per cent of respondents are expecting to grow by double digits in 2024, and we predict a compound annual growth rate of 11 per cent up to 2027. The MSP Horizons Report 2024 will help these businesses capitalise on the opportunities in the market and continue to drive growth in the sector to 2027 and beyond.”
N-able president and CEO, John Pagliuca, said, “Today’s MSPs want and need to go further and faster and we have always prided ourselves in helping our partners do just that. This is why we teamed up with Canalys to launch The MSP Horizons Report 2024.
“If you’ve ever attended one of our Empower events you will have heard us talk about ‘the answer being in the room’. We can’t answer all the questions this report raises on our own, but we can start and facilitate those discussions — discussions that we hope will help lead our partners towards true transformation for long-term success.”