Cloud Trends

MSP Market Trends and Opportunities: Cloud Services

Planning and preparation are vital for taking advantage of MSP market trends and opportunities. Predictions and data from studies, surveys, and reports give MSPs some clue into what could be coming next. Of course, some things we know to be true without looking at the numbers – ransomware and other cyberattacks are unending, and reliance on cloud services continues. Other factors, like the state of our economy, present new challenges that must be considered as you look forward.

Keep reading to take a deeper look at some of the MSP market trends you know, and some that you may not have worked into next quarter’s plan. Understanding what’s going on in the market is just half the battle; the other half requires applying that information as a strategy for achieving your goals.

After reading this article, MSPs should consider the following…

  • What are we doing as a business with the trending information we have?
  • How are we applying what’s constant in the market to increase our business? Or have we grown numb to the state of the channel?
  • How could possible industry, market, or economic changes impact what we think we know?

SMBs Are Investing Millions in Cloud Services

Ever since the cloud migration began, more and more small to medium-sized businesses (SMBs) have been joining the modernization movement. Luckily, they like it, and budgets are expanding for new cloud services like business continuity, disaster recovery, Microsoft 365 and Google Workspace backup, and remote workforce enablement. This is great news for MSPs. Not only do you have an enormous pool of potential clients who actually want the services you provide, but your current client base is also motivated to continue your business relationship. An abundance of promising leads, plus existing clients, equals business growth.

“As many as 53% of SMBs surveyed in the latest [Flexera 2022 State of the Cloud] report are spending more than $1.2 million annually on the cloud. That’s up from 38% last year. … Given the growing amount that organizations are spending on the cloud, it’s not surprising that managing cloud spend was one of the biggest challenges cited by enterprises and SMBs, only marginally surpassed by security and lack of resources/expertise.”


What’s Driving the Trend?

  • Smaller workforces due to the tech skills gap, fears of recession, and other labor challenges are straining an SMBs ability to hire and maintain a robust workforce.
  • Automated cloud capabilities increase productivity and optimize employee productivity by reducing manual tasks that create regular time burdens for an MSP team.
  • Remote and hybrid work environments that both reduce operational overhead and attract talent.

How Can MSPs Capitalize?

  • Carve out a target vertical or technical specialty to focus your standard service offerings. MSPs that adopt a specialized service strategy – especially within the optimal target verticals for MSPs – are generally more profitable and experience more robust sales growth than the average MSP.
  • Optimize and digitalize sales strategies and hire tech-savvy reps. According to a recent survey, 86% of buyers now prefer to be sold virtually without face-to-face meetings, and more than half of all buyers want to see a product before buying. Of these, only 34% prefer an in-person demo. So set up your sales hires up for success with on-demand demos, marketing campaigns, and sales tracks that directly address SMB concerns: cloud spending, cybersecurity, and resources.
  • Partner with solution providers that reinforce your values. If you tell clients you’re a cost-efficient, security-focused business enabler, your vendors should be too. Leverage the solutions in your stack as a selling point to clients to build their confidence in your ability to protect their business.

>> Download the eBook: How to Choose the Best BCDR Solution for Your MSP. Get your business continuity and disaster recovery (BCDR) buying guide and done-for-you checklist to help you evaluate your current solution or find a new one.

The Managed Services Market is Continuing to Grow

The positive correlation between SMB investment in cloud services and MSP growth makes sense. As more SMBs modernize their infrastructure, they rely on MSPs toInvest in your MSPs tech team help. Basically, it’s an MSPs game out there, but you’ve got to have the right players to win. Achieving and maintaining a competitive edge in the channel is paramount to your success. MSP marketing and sales are more important than ever, but it’s commonly a weak point for MSPs. Fortunately, identifying a weakness gives you somewhere to focus your attention and grow.

“As per the newly published report by Research Dive, the global managed services market is anticipated to grow at a stunning CAGR of 11.1%, thereby garnering a revenue of $4,10,707.9 million in the 2019-2027 timeframe.” … “By deployment type, the cloud sub-segment is expected to grow at the fastest rate with a CAGR of 12.5% in the analysis timeframe.”


What’s Driving the Trend?

  • SMB investment in cloud services, as discussed above, is the main driver for growth in the managed services market.
  • Managed services are affordable and hands-free, making them an attractive option for SMBs that want to forgo the burdens of managing an in-house technical team.
  • Cyberattacks continue to rise in frequency, sophistication, and targeting of SMBs, requiring the comprehensive BCDR solutions and guidance provided by MSPs.

How Can MSPs Capitalize?

  • Standardize your stack while providing comprehensive solutions clients need – too many disparate solutions and your TCO skyrockets – depleting profits, frustrating technicians, and compromising recovery. Simplify data protection with all-in-one, MSP-only solutions that protect clients while supporting MSP growth with ease of management, automation, happy technicians, and significant margins.
  • Invest in marketing and sales with a new perspective. MSPs don’t need to break budgets to get new clients – there are a lot of opportunities to stand out above the crowd with the right messaging. Speak directly to SMB pain points and your MSP’s unique ability to address those issues in content, campaigns, on social media, at events, in testimonials, and during upsells and cross-sells.
  • Partner with vendors who support your marketing and sales strategies. Axcient includes unlimited free access to our Axcient Marketing Portal for all our MSP partners. There, MSPs get already-done brandable assets, customizable email campaigns, social media posts, and detailed marketing analytics to help them improve and drive marketing and sales.

>> Download the MSP Marketing and Sales Guide. Get four ways to grow your business on a budget with our complete guide explicitly designed to help MSPs get more SMB leads and close more deals.

A Global Recession is Likely in 2023

Axcient SolutionsMany economists agree that a recession in 2023 is coming, so what does that mean for MSPs? Fortunately, recessionary times drive SMBs to outsource IT services, meaning MSPs actually have an opportunity for growth. SMBs looking to reduce overhead costs and full-time employee expenses turn to MSPs as a way to lower headcount without compromising critical capabilities and cybersecurity. However, MSPs must prepare their infrastructure to take advantage of the influx of new business. SMBs have a lot of choices in the market; if your MSP cannot meet stringent SLAs or deliver the support expected, you could lose clients.

“As central banks across the world simultaneously hike interest rates in response to inflation, the world may be edging toward a global recession in 2023 and a string of financial crises in emerging market and developing economics that would do them lasting harm, according to a comprehensive new study by the World Bank.”

– The World Bank

What’s Driving the Trend?

  • 40-year high inflation rates have substantially increased the cost of living, forcing employees to seek higher-paying jobs and adding additional operational costs for businesses.
  • Increasing the Federal Reserve interest rate is the government’s tactic for lowering inflation. Still, the rising cost of borrowing money for business expansion reduces the demand for loans and spending – contributing factors to a recession.
  • International conflict stemming from the war in Ukraine is causing supply chain disruptions that are compounded by inflation and interest rates, resulting in the low economic growth necessary for a recession.

How Can MSPs Capitalize?

  • Design your stack for operational maturity so that your MSP can take on a larger client base without driving costs. A standardized stack is efficient for vendor management and helps MSPs avoid the negative consequences of vendor sprawl while delivering the low total cost of ownership required for profit growth.
  • Streamline labor requirements to stabilize operational costs by standardizing modern, automated solutions that satisfy multiple business use cases with just one vendor. It reduces the level of expertise required from techs and lowers labor costs while fueling rapid and reliable recovery.
  • Partner with a stable, MSP-specific vendor who you can rely on during the economic uncertainties ahead. Beware of vendors with audiences outside the channel or who are managing their own mergers and acquisitions. You want to be your vendor’s priority to get the best service, solutions, and updates necessary to help address new business challenges.

>> Download the MSP Whitepaper: Reference Architecture and Its Impact on MSP Maturity, Efficiency, and Profitability. See how top-performing MSPs achieve 2x higher profitability compared to average-performing MSPs using a simple, standardized foundation that supports operational maturity.

How Confident Are You In Your Ability to Ride Market Trends?

As an MSP-only solution provider, Axcient is here for the channel. Stay up on the latest industry news, cybersecurity defenses, and enablement features to keep your MSP on top. Whether you’re a partner or not, Axcient has resources to help. Attend an upcoming event, read the latest blogs, download an eBook, guide, or white paper, or start a free Axcient trial to see how we help MSPs Protect Everything™.


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More Great Stuff From Our Blog:

Check out some other interesting pieces from our blog: Is Microsoft 365 or Google Workspace data the big hole in your business continuity plan as Ransomware attacks spike?, we dove into how chain-based backup works and why chain-free is the way to be, take a comprehensive look at Axcient’s robust, partner-driven dedicated support, marketing materials, and free on-demand training, we talked with Jason Phelps from Huntress Labs about planning for the next ransomware attack, our CEO David Bennett explains why the current cybersecurity landscape means traditional backup is dead, or learn how you can ditch pricey on-site appliances with Local Cache for Direct-to-Cloud BCDR.


About the Author: 
Liz Mellem // Technical Copywriter, Axcient

Liz Mellem has been a freelance copywriter for over three years in the technology, education, and alternative medicine industries. She produces content, sales collateral, and email marketing campaigns that contribute to digital marketing strategies for sales growth and brand awareness. In her free time, Liz enjoys reading, exploring Austin, and Netflix with her cat, Harlem.