MSP Market Trends and Opportunities: Cloud Services

The data is in and the trend of small to medium-sized businesses (SMBs) migrating to the cloud is here to stay. Energized by remote workforces around the globe, cloud services have never been more important to keeping businesses moving. Despite the challenges 2020 has presented, expert projections and survey results are giving managed service providers (MSPs) something to believe in.

In a discussion between Rick Porter, President of Cinch I.T., and Eric Timmons, Axcient’s Senior Sales Manager, the two evaluated some of the latest market research. Check out the following stats to see why cloud services are all the rage for both MSPs and their clients.

The global CMS market size is projected to grow from $62.4 billion in 2020 to $116.2 billion by 2025, at a Compound Annual Growth Rate (CAGR) of 13.3%.

ReportLinker, a market research solution, compiled their cloud managed services market research in June 2020, after COVID-19 broke out in the U.S. Cited as a major driving force, is companies cutting capital costs and transferring into operational costs. Cloud Managed Services (CMS) enable remote employees and work environments, while allowing IT departments to maintain productivity in business growth.

This remarkable growth opportunity presents an especially exciting moment for MSPs. As more clients migrate to the cloud, elevate their cloud strategy, or reevaluate it as a long-term tool, MSPs need to provide the layered security solutions necessary to keep it safe and accessible. Rick cautions MSPs that don’t have the cloud services clients are seeking, “If your MSP is not providing these solutions, another MSP is.” Without digital transformation enablement, you’re missing out on a strong market, and doing your clients an injustice by putting their data at risk.

72% of solution providers receive <50% of their revenue today from cloud services.

CompTIA recently surveyed solution providers and vendors to see how they are taking advantage of the cloud services market. Results, which will be published soon, revealed a lot of opportunity being left on the table. A large number of MSPs are not providing cloud services, despite being the fastest growing piece of an MSP business.

Rick says, “The one thing that is driving clients to the cloud is 100% client education. Why they should be in the cloud and if they should be in the cloud. Pros and cons to the impact on business.” Additionally, MSPs are there to determine the best cloud solution for their clients. In response to COVID-19, businesses moved quickly with hastily created cloud environments because they had to. Now, Rick says MSPs should be examining those cloud services specific to each client. “Did they move to the right cloud solution during the rapid shift? Or did they just choose the easiest, fastest, or most affordable? Make sure it’s the right solution for your clients.”

MSPs who provide both individualized attention to clients, as well as blanket protections, are best equipped to make the most of the cloud services market. If you did not have the stack to enable remote work before COVID-19, you potentially lost clients. If you still don’t have a remote enabled stack with layered security, you stand to lose clients in the future as they revisit the cloud structure initially set up. Rick says, “Now it’s time to step back and seek out a cloud bundle that has everything they need in one simple project. A bundle of the right solutions increases conversions and helps the client best.”

79% of SMBs are prioritizing digital transformation, with security spend increasing from 8% to 11%.

In research by TechAisle, evaluating the impact of COVID-19 on global SMB IT spend, it was revealed that most are focused on elevating services to meet today’s demands. Migrating from on-prem to protecting the end point in remote environments is a top concern, and huge opportunity for MSPs. In the same study, we see SMBs increasing spend around security, while cloud services spend has not been impacted.

While we can determine that SMBs are in for the digital transformation to cloud services, and they know that includes security, 72% of SMBs are unprepared with cybersecurity and disaster recovery (DR). Rick comments on the availability of resources now, after remote environments have been established. “We’ve seen this trend on hardware. During the transition to work from home, clients spent a ton of money on infrastructure – laptops, cordless keyboards, headsets, mice, and other hardware. Then, once everyone is situated, that drops significantly.” Again, now is the time to reevaluate the initial cloud strategy and with all the hardware in place, there is budget available for cloud services.

Rick says, “MSPs need to be tied in with our clients’ businesses so we know what they need, when they need it.” Have the education materials available to help clients understand the risks of ransomware, phishing attacks, and other cyber crimes that are spiking during COVID. Capitalizing on the cloud services market doesn’t mean you have to sell, sell, sell. Instead, focus on meeting the needs of your clients with simple, secure solutions that provide data protection and access, no matter what.

These statistics and much more was discussed during our Virtual Lunch & Learn, “Value-Based Go-To-Market Strategy: Microsoft 365 Backup.” Join us for the full discussion and get a $25 gift card to UberEats just for attending (our way of saying lunch is on us). Check out our upcoming virtual events, and sign up to attend one today!


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.

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