The past year was a time of unprecedented turmoil in both our economies and markets, but the questions for MSPs now are: What is the path forward? What lessons can we learn from the past year? What do MSPs need to focus on for the future?
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To find some of these answers, The Channel Company’s Ed Hannan, senior digital content manager, sat down with Gary Pica, president of TruMethods, LLC, a training, peer and accountability firm for MSPs and cloud providers. Pica was joined by Jeannine Edwards, senior director of channel marketing for StorageCraft, an Arcserve company.
Here are some the highlights from the interview below that focuses on a look back at 2020. You can also check out the full video of the interview: Resiliency and Recovery Report: Double Down on Business Security and Business Continuity.
Q: How did MSP’s survive last year’s pandemic?
Jeannine Edwards: The service provider community did OK. At the end of the day, the end user said, if there’s one thing I have to make sure of, it’s my technology that ensures I’m up and running. It became even more critical for SMBs to rely on their outsourced technology provider to ensure the distributed workforce is well taken care of.
Gary Pica: We have over 160 to170 companies in our peer group. Initially we saw this little dip, but amazingly by the end of the year, we saw all that revenue come back. I think it just tells you that the total addressable market of MSPs is so big and it’s growing so fast that this has tested the resiliency of the marketplace—and it’s positive.
Jeannine Edwards: In our survey of partners looking back at 2020, 66 percent of the MSPs surveyed said they experienced either moderate (5 to 15 percent) growth or hyper/higher growth (more than 15 percent) in 2020 … Even more, 82 percent, said they expect either moderate or hyper growth in 2021. And they know they have to do a few things to the contract to extract more value.
Gary Pica: If you’re an MSP and you’re not charging your customers more per month, more per seat than a year ago, you and your customers are less secure, not because of the tool stack. We’ve seen tool costs go from about 10 percent of seat price to about 25 percent. But a lot of that is security hygiene, it’s governance, it’s people, it’s process, and that costs money. We’re seeing the highest seat prices ever for core offerings—$170 to $185 per seat and they’re getting it all day long now. It’s pretty dramatic, but the market has changed dramatically and MSPs’ responsibilities have changed dramatically.