The future of IT — MSP, in-house, or both?

MarketsandMarkets forecasts that the MSP market is “expected to grow from USD 223.0 billion in 2020 to USD 329.1 billion by 2025”. That’s a healthy year-over-year gain for MSPs everywhere. So, what’s driving that growth?

Is in-house IT dying?

The short answer is no. In-house IT resources are here to stay. What we are seeing is a trend towards more strategic partnerships with IT staffing. That means that many companies that have in-house IT staff are realizing that there are projects and services that their IT team isn’t a good fit to manage or doesn’t have expertise in.

This is where MSPs are stepping in to help fill some of the gaps. Migrations to cloud solutions such as Azure and Amazon Cloud have many businesses looking for skillset in cloud computing that they don’t have in-house. Hybrid cloud integrations and cloud infrastructure require a very specific skill set that they may not have. MSPs have the cloud consulting experts they need.

Automation and toolset are other areas where MSPs are helping to complete the solution for in-house IT teams. Many In-house teams don’t have the resources to implement and maintain tools that would ultimately save them time and resources. Many MSPs have started offering a partnership where they offer “done for you” solutions for toolset, patches, and more.

MSPs have had great success filling the gaps that exist in internal IT departments. This type of consulting can be a very lucrative business line for MSPs.

What else is causing the growth of IT?

MSPs are seeing continued growth with enterprise businesses as they seek to cut costs with dwindling budgets. IT helpdesk is an area where many businesses can save a significant amount through outsourcing. This has continued to fuel growth for many MSPs.

There is also a shortage of talented IT professionals. For many small and medium businesses, this makes it difficult to hire help even if they wanted to. There are many other advantages for an SMB to outsource their IT. They get an entire IT department with many resources for a fraction of what they would pay for a single full-time employee. Many small businesses don’t have enough work to keep someone employed full time. The economics of outsourcing in these cases is quite simple.

Specialization

As mentioned, cloud consulting and managed infrastructure have been areas of growth for many MSPs. Security has been another area where there has been a lot of growth. Many MSPs are creating new security offerings and pivoting additional resources to this area of growth. Some are even rebranding as Managed Service Security Providers or MSSP.

Typically, an MSSP offers advanced security offerings as a service to their clients. They may also manage a SOC or security operations center as a service to their clients. The Security Operations Center (SOC) is the hub and command center of cybersecurity operations. According to MSP Alert, SOC is described this way:

“By delivering the SOC “function” as a service, it includes the people, processes, and the SIEM platform necessary to perform the network and endpoint threat monitoring, detection, and recommended response for your customers.”

Key Takeaways

MSPs should be strategic about planning their offerings around areas of market growth. It may pay dividends to explore strategic partnerships with in-house IT departments. Developing specialization in areas such as cloud and security can be great revenue sources for MSPs. Keep marketing to the SMBs that have traditionally been great clients for MSPs. They will continue to be a fantastic source of recurring revenue and growth for the future.