MSPs are looking at new tech for growth, TD SYNNEX report finds

65 per cent of MSPs surveyed list business consulting and planning as their top investment priority, and 75 per cent of MSPs expect business growth

More than three quarters of MSPs said that expanding their solution offerings was important or very important for growth, a special report by TD SYNNEX's has found.

While 65 per cent of respondents noted business consulting and planning investments were imperative, a full 80 per cent said that expanding their solution offerings was a priority.

"These results track with how we view the MSP partner journey and growth strategy. The MSPs we work with cite the critical need for strategic planning, business development, alongside training and enablement to leverage the opportunities presented by lucrative high-growth technologies," said Sergio Farache, chief strategy officer at TD SYNNEX.

"With the current pace of change across the technology landscape, it is clear MSP respondents are focused on pulling the right levers to ensure their financial success. Our MSP special report was purpose-built for MSPs to provide important insights that help inform and grow their businesses."

Respondents shared that networking (28 per cent) and security (27 per cent) have been top revenue drivers over the past 12 months.

Looking ahead, MSPs expect the top areas for growth will be data analytics (37 per cent), artificial intelligence/machine learning (37 per cent), and augmented reality/virtual reality (31 per cent) as top areas for growth, overtaking both networking (30 per cent) and security (27 per cent).

The MSP data was collected as part of the second-annual Direction of Technology (DoT) report, which surveyed channel partners, including resellers, systems integrators, service providers, and MSPs.

The report identified three key trends, covering the skills gap, revenue expectations and regulatory pressures.

Skills gap remains a challenge, especially for high growth technology expertise

MSPs say that talent recruitment and retainment (46 per cent) and ongoing technical education (33 per cent) are among their top challenges, along with keeping up with the rapid technological change (45 per cent).

Not surprisingly, data analytics (33 per cent), security (26 per cent), networking (24 per cent) and AI/ML (22 per cent) are the top skills they are hiring for, in line with the solutions they anticipate driving the most revenue in the coming years.

MSP revenue expectations are in line with wider channel expectations

Respondents split priorities for growth among acquisition and organic, global expansion, new technology offerings and new vertical markets.

75 per cent of respondents expect revenue growth in 2023 and beyond. On average those self-selecting as an MSP derive 20 per cent of revenue from the sale of managed services, compared to 15 per cent in overall channel.

Three quarters of MSPs ranked as very important or important, growth through acquisition (73 per cent) or organically (77 per cent). Less than half (47 per cent) cited actively seeking a buyer as important.

Approximately 70 per cent of respondents said that global expansion (69 per cent) and entry into new vertical markets (66 per cent) are important or very important.

This is in addition to the 80 per cent who noted that expanding their solution offerings was important or very important.

Regulatory pressures are real, with ESG jumping in importance

Approximately one-third of MSPs say that rapid regulatory change (36 per cent) and meeting and documenting ESG standards (34 per cent) are challenges to their business.

While data protection (72 per cent) and cybersecurity (54 per cent) rank at the top if the list today, in two years' time that changes dramatically with ESG (42 per cent) ranking at the top of the list compared to data protection (35 per cent) and cybersecurity (38 per cent).

"This data underscores the competing needs and priorities for MSP growth, as well as the challenges to that growth, TD SYNNEX's unrivalled market insights, specialised solutions, deep industry relationships and global reach that help MSP leaders cut through complexity, guiding them to higher growth opportunities and helping them flourish today and long into the future," said Jill Kermes, corporate VP of global corporate communications and citizenship.

The survey was conducted from May to July 2023 and captured feedback from more than 550 B2B channel partners from over 60 countries in global regions of North America, Europe, Latin America and the Caribbean (LAC), and Asia Pacific and Japan (APJ). Of those respondents, 227 self-identified MSPs participated in the survey.