There were no roller coasters at the Gaylord Palms Resort in Orlando but we still had a good time! The 3-day event featured educational sessions, vendor exhibits and networking opportunities. As a member company of the MSPAlliance, we took advantage of learning from industry leaders and met dozens of the approximately 400 MSP members in attendance.
One presentation we look forward to at each MSPWorld is the Keynote address given by Charles Weaver, CEO of MSPAlliance. His bi-annual update for this event entitled Managed Services & Cloud Computing: State of the Market focused on the overall state of the MSP industry. He cited industry trends, provided observations on current and future opportunities for MSPs, and offered suggestions for capitalizing on them.
Here are D3UC’s key takeaways from Charles’ presentation:
- Top line observations: the MSP industry is healthy!
- MSPAlliance is seeing moderate growth in IT services spending based on good quantifiable data.
- As a percentage of IT services spending, managed services and cloud services are growing at a rapid rate.
- Print, office supply, and non-traditional companies are entering the managed services profession, mostly by acquisition.
- Cloud product offerings still not crystallized.
- 2015 IT spending projections
- North American IT services spending = $981 billion.
- North American managed services spending for 2014 = $154 billion!
- 2.4% growth in 2015.
- Mergers, acquisitions, and valuations
- The roll up of the MSP industry that everyone’s been saying would happen, still hasn’t happened.
- MSP valuations are holding, but lack of credible buyers has prevented valuations from rising.
- MSPs have largely stopped growing via acquisition strategies—this is a good thing—MSP growth should come organically.
- Industry challenges
- Keeping existing business is not enough. We must learn new models for generating new business.
- MSPs struggle with sales and marketing.
- Per device and per user models are leaving MSPs vulnerable to competitive challenges, both from customers and other providers.
- Customers are finding MSPs more easily and are willing to switch providers if they aren’t satisfied.
- Reselling public cloud isn’t enough—MSPs need more cloud strategies than reselling.
- Regulation is here and in many ways.
- Stop chasing ineffective sales and marketing techniques.
- Revisit pricing models—new models like SLA or risk-based pricing should be considered.
- Abandon the reselling mindset because we have come so far.
- Develop cloud strategies with security and data privacy in mind.
- Create effective referral programs—refer business to fellow MSPs.
The MSPAlliance is the world’s largest professional association and accrediting body for the managed services industry. For more information on the MSPAlliance visit www.mspalliance.com. Additional information about the MSPAlliance 2015 State of the Market Report can be found here.