Channelnomics Research Report: Optimizing BCDR Can Help MSPs Fight Off Recession
What can MSPs do to survive and thrive?
During MSP Xperience 2022, Larry Walsh, the CEO, Chief Analyst & Founder of Channelnomics, dove into the data from the newly released co-developed survey of 300 MSPs in the Fall of 2022. The survey was designed to gauge the impact of the current economy on business continuity and disaster recovery (BCDR) services and the health of MSP’s business now and in the future. Larry points out that it is important to distinguish between surviving and thriving. It isn’t enough for MSPs to survive. We must think about how we can make a business work even better when facing challenges. Thriving means helping your customers do as well as you are.
“Managed services may not be recession-proof, but they are recession-resilient because when economic pressures occur, your clients will look for ways to move from fixed costs to flexible costs so that you can adapt together.”
– Larry Walsh, Channelnomics
The Data Highlights BCDR Optimization Opportunities
IT businesses are in a predicament these days… Forty-year high inflation, rising interest rates, wage expansion, the tech skills gap, and a potential economic recession all contribute to the cost of doing business. As a 100% MSP-focused solution provider, Axcient is dedicated to helping the channel navigate these uncertain times with targeted innovations and operational strategies for success. In doing so, we rely heavily on MSP insights.
So, we teamed up with Channelnomics, a business strategy and research firm focused on improving the performance of technology companies. We surveyed hundreds of MSPs in late 2022 to get a read on the impact of BCDR services during an economically uncertain climate. The result, Research Report: Optimizing BCDR Can Help MSPs Fight Off Recession and Grow, shows how forward-thinking MSPs are focusing on operational maturity, stack simplicity, and talent retention for recession-proofing. While simultaneously managing the competing priorities involved in finding a high-quality BCDR solution with strong cybersecurity protections, a simple pricing structure, and adequate technician training.
Summary of Key Findings
All 309 survey respondents offer managed services, with 53% partnering with three or more BCDR vendors. Seventy-two percent expect BCDR sales to increase through 2023, and 96% consider BCDR critical to the future of their business. The average survey participant has been in business for 11 to 20 years and generates between $5 million and $10 million in gross revenue. These are some of the key findings that we examine in the full report:
- 45% prefer a consolidated platform for the delivery of managed services.
- 36% say their current stack is just inefficient – and a nearly equal amount say they can’t replace it because they lack a viable option.
- Top identified attributes of BCDR systems for success: Cloud virtualization of backups, Unlimited cloud-based storage, and Quick, easy data recovery.
- Motivations for switching BCDR vendors: Lower labor costs, Better RTO/RPO, Better protection from ransomware, and Broader ecosystem options.
- Economic challenges: Inflation, Clients not renewing contracts, Clients not expanding services, Software licensing and vendor services costs, and Increasing labor costs.
- Economic preservation strategies: Outsourcing services and support, Staff retention and optimizing existing systems, Automate and streamlining processes, Increasing marketing investments, and Downsizing.
- #1 Challenge to overcome: Delivering services on time/meeting SLA requirements (39%).
Takeaway #1: Cost Control > Profit Growth
Interestingly, the survey shows that while increasing labor costs is not a high source of pressure for MSPs, it is a motivation for changing BCDR vendors. When asked what a high source of pressure for MSPs is, most survey respondents chose ease of use. These results suggest that MSPs are missing the correlation between labor costs and ease of use in BCDR solutions – which is foundational to selecting the right BCDR vendor, taking advantage of data security automation, and keeping technicians happy. This is important because the right BCDR solution can lower labor costs by increasing ease of use – without compromising performance or security.
Takeaway #2: Retaining Talent > Hiring New Talent
Why do MSPs want to retain the talent they have? It often comes back to cost-cutting. New employees often demand higher pay and require onboarding training, creating a lull in productivity as they get up to speed. Based on the complexity of an MSPs’ stack, you may need highly trained technicians with higher salary demands in exchange for their expertise. Given these costs, it’s no surprise that survey respondents cited lower labor costs as their motivation for switching BCDR vendors. And, very surprisingly, survey respondents say increasing labor costs are not a high source of pressure – yet ease of use is. So, again, there’s that correlation between costs, labor, and ease of use – but MSPs aren’t taking advantage of that reality with stack standardization.
Takeaway #3: Act Now!
According to many experts, the economic downturn will only worsen. That means that MSPs need to act now to find the efficiency, automation, innovation, and security they need from their stack. While the majority of MSPs want a consolidated platform, they’re continuing to use a stack that they consider to be inefficient. Even worse, they’re willing to accept this inefficiency, believing there isn’t a better option available.
To ride the economic waves of uncertainty without losing clients, technicians, and your business, MSPs will have to do better than settling for inefficient. Luckily, Axcient’s BCDR solutions are tailor-made to fit the needs and wants of MSPs and their SMB clients. With features like AirGap for ransomware protection, AutoVerify for automatic backup integrity verification, Virtual Office for self-managed cloud disaster recovery and disaster recovery testing, plus our proprietary Chain-Free backup technology that delivers unlimited storage and retention – MSPs can quickly, easily, and cost-effectively increase the performance and security of their BCDR services. To see exactly what Axcient is doing for over 3,000 MSPs and counting, schedule a 1:1 demo or start your free 14-day trial now.
Research Report: Optimizing BCDR Can Help MSPs Fight Off Recession and Grow
Download the full report for details on how top-performing MSPs are strategizing success during economic uncertainty. With this depth of insight into the channel and your MSP peers, you can identify new ways to avoid common missteps. Take advantage of these findings as you investigate new BCDR vendors, introduce innovative technologies to attract clients, reinforce security to combat evolving threats, and secure a workforce with skill and ROI. Regardless of what the future holds, planning, preparation, and optimization are critical for thriving. Are you ready?
About the Author: Carissa Johnson // Product Marketing Manager, Axcient
Carissa Kohn-Johnson has a background in behavioral and physical healthcare technology and information technology and currently works as the Product Marketing Manager for Axcient. She has a lot of MSP Channel experience from planning and attending hundreds of conferences and tradeshows, and found her passion in technology, and working with MSPs in particular. She serves on the Information Services Advisory Board for her community and feels most at home with other technology-forward people. Connect with her on LinkedIn – perhaps you can contribute to the Axcient blog?