There is no doubting the fact that the managed service provider market is rich with growth as the demand for such offerings rises at an exponential rate. According to management consulting and research firm, The Everest Group, the MSP market grew in 2014 by 7-10% (US), 13-18% (EMEA) and 33-38% (APAC) (Managed Service Provider (MSP) – Annual Report 2015: Moving Beyond the Horizon) and is now estimated as an $85-90 billion global market. This represents a global growth rate of 11-16% in 2014 alone.
Such findings are impressive and look set to remain so as demand continues to flourish. Significantly, 64% of end-user companies currently outsource at least one operational function to an MSP (CompTIA’s 4th Annual Trends in Managed Services report) which bodes well for 2016 suggesting growth with both new and existing clients.
The future looks rosy for MSP’s but what is driving these trends?
Cyber security
As the threat of cyber crime continues to keep apace with defence systems, cyber security remains a primary driver between the growth of MSP’s and the importance of maintaining a secure online working environment.
Data breaches range from ransom attacks to corporate theft, financial phishing to nuisance hacking but the cost to global businesses is staggering. The impact that cyber attacks can have on an organisation can be devastating both financially and to brand reputation. No company is safe from such a threat with big names such as Sony, Experian and TalkTalk all experiencing very public exposure from their respective breaches.
Many similar breaches never even reach the public domain with companies paying substantial sums of money in ransom fees to prevent their client’s sensitive data from being published. Criminals, having gained access to such information, encrypt the files and demand huge sums of money to release it. Global tech giant, Apple has even fallen victim to this kind of fraud.
This level of threat is motivating businesses to seek external resources to supplement their defence policies. MSP’s are finding they are increasingly being asked to provide security solutions such as firewalls, spam filtering and email scanning. In addition, the ability to have a secure, robust and dynamic way to backup data is increasingly important; without a quality backup procedure in place ransomware attacks are more successful.
Offering bundled cybersecurity services is one way that MSP’s are able to increase their business and secure extra revenue.
Rise in uptake of the cloud
The findings from the CompTIA’s 4th Annual Trends in Managed Services report suggests that almost half of their respondents were using the services of an external source to build their cloud solutions. The main demographic of whom appear to be SME’s who do not have the in-house expertise to securely and afford-ably manage a transition to the cloud.
Since the cloud has gone mainstream and more and more companies acknowledge the flexibility and cost savings associated with this solution uptake is increasing at a rapid rate. This can be seen in the rate of sign-up experienced by Microsoft for its cloud product, Office 365; at present over 50,000 new businesses are registering each month.
As cloud technology continues to prove itself robust and secure whilst delivery commercial benefits of mobility and competitive pricing the rate of sign-up will only grow and this is excellent news for MSP’s.
Challenging IT environments
IT is renowned for the rapid rate at which its technology is developed but current changes in both software and hardware are evolving even more quickly than in previous decades. The range of platforms being used in a workplace, the requirement to access data securely and quickly from even the most remote of locations combined with the usual rate of change means that keeping up with the demands is challenging even for an experienced IT workforce.
Fortunately these challenges are a perfect opportunity for MSP’s to step up to the plate and deliver much needed outsourcing for SME’s in need.