We’re more than halfway through the year and anecdotal and market data points to 2021 being a strong growth year for MSPs. A recent report on the managed services market from ResearchAndMarkets.com identified some of the trends feeding market growth and outlook.
According to the report, the global managed services market in 2020 was $151.4 billion. It is expected to grow to $460.6 billion 2020-2027—a compound annual growth rate of 17.23 percent.
A key driver is the high cost of downtime and data loss. Some of the other drivers include increasing demand for data centers, security services and IT infrastructure, the report noted.
The COVID-19 pandemic also accelerated a need for more cloud services and solutions as workforces became more distributed.
It’s not hard to pull these strands of drivers together to form a wider picture. The wider adoption of the cloud is coming at the same time as threats are rapidly increasing from malware and ransomware.
This led to demand for expertise in data protection, storage and cloud services. It only makes sense that companies turn to outside help for expertise from managed service providers. Once looked on as resellers, MSPs are increasingly seen as valued advisors.
In a recent article on CRN.com, MPSs attending CRN’s B2B event XChange+ 2021 in San Antonio, offered anecdotal evidence of a booming market for managed services.
“We are running an IT business in the hottest industry at the hottest time,” said Matthew Tucker, the CEO of Pegasus Technologies, a managed service provider (MSP) in Kennett Square, Pa. The article includes Tucker commenting on the reasons for the boom: “The pandemic forced companies to take a hard look at how they work internally,” he said. “All these technologies we had shown clients before, and [with] the efficiencies they could gain, they were forced to quickly adopt with the pandemic.”
Another MSP, John Head of PSC Group LLC, Chicago, told CRN his company also experienced record sales growth. “In the last 18 months we have seen the largest growth in technology sales by far since the dot-com era in the late ‘90s,” he said.