Madison Strategic Sector Premium Fund : SMBs Need MSPs In 2021 More Than Ever

Managed service providers (MSPs) have a massive opportunity in front of them in the coming year: It's expected that global IT spending will reach just under $3.7 trillion in 2021, up 4.3% from 2020, according to Gartner Inc. Within that $3.7 trillion, investment in cloud-based IT infrastructure is set to surge 27.6%, to $64.3 billion in 2021. This isn't really a shock - IT spending has been increasing year-over-year as more businesses rely on technology to do business, particularly cloud-based tools.

Why SMBs Should Rely on MSPs

SMBs outsource a multitude of business responsibilities - they hire lawyers to create their contracts, accountants to handle their finances, so why not an MSP to manage their IT needs? Managed IT services typically provide the technical expertise needed, but at a much lower cost when compared to hiring a full-time IT employee. Contracted IT service providers deliver the same services as in-house IT staff; they recommend, install, and manage all of a business's IT needs. Hiring an MSP to deliver IT needs frees up time, and creates more room to focus on business innovation and growing daily operations for SMBs.

With the recent transition to cloud-based tools and services that came as a result of the shift to remote work due to the global pandemic, MSPs have a greater opportunity to provide ongoing services to support their clients.

What This Means for MSPs

MSPs are IT advisors for the small and medium businesses of the world, and the shift in technology trends brings opportunities for them to show their value to clients and prospects. Here are a few ways to capitalize on small businesses' technology needs.

1. Recurring services. If you're still operating on a primarily break-fix or project-based model, now is a great time to help your clients and prospects see the value of a recurring services model. Establish more reliable sources of income with a recurring services model and better serve your clients and their technology needs. See our tips on making the move from break-fix to MSP in our eBook.
2. Bundle with backup. More data in cloud-based tools means more need for a reliable backup of that data. If you aren't already, offer your clients a bundled service of Microsoft 365 or Google Workspace with cloud-to-cloud backup to ensure their business-critical cloud data is secure. If they don't see the value, show them that Microsoft recommends it in their client agreement and remind them; just because it's in the cloud doesn't mean it's safe from a data loss event.
3. Talk with your clients about the realities of cyber risk. It's not exactly a fun conversation to have, especially when a client or prospects feels they're immune to cyber risks like ransomware, but the conversation is critical. Ransomware and other cyber risks continue to be a reality of our environment and as an MSP, your opportunity lies in helping your clients see these realities and the ways you can work together to combat them, like a business continuity and disaster recovery tool.
4. Partner with vendors that enable you to scale your business. Not all IT vendors are created equally. As an MSP, you will thrive with a vendor that is dedicated to the channel and will not fight you for business and provides you with technology that works. Datto is 100% MSP focused and only serves the channel.

Managed service providers are well-poised to deliver on the needs for IT services in the coming year. Learn more about how Datto can enable your MSP business with great technology and a true partnership, and here's to a successful 2021.