Some new data from CloudBolt Software, which surveyed MSP customers. According to the survey, 80% of MSP customers are shopping for a new provider. Why unhappy?
- An inability to optimize cloud spending (60%)
- Limited or non-existent multi-cloud options (58%)
- Inability to better enable cloud automation (50%)
- Failure to provide visibility into cloud spending (41%)
- Inability to automatically remediate spending inefficiencies (24%)
But, the respondents also think their MSPs outperform them. 91% believed that their MSPs increased their agility—and 85% felt their MSPs were more successful at digital transformation than they would be alone. 97% of respondents stated that they would be willing to pay more to an MSP that could deliver solutions to these problems.
On the other end of the spectrum, the MSP 501 is out from Channel Futures. Revenue growth rates for 2021 over 2020 for the 501 managed service providers painted a picture of MSP maturity. Total revenue came in at 15%, recurring revenue topped 18%, and profit came in at 15%. That said, the Average revenue per MSP 501: is $42 M (17% growth YoY); the Median: is $5.75 M.
While reviewing sentiment, a survey by SolarWinds looked at the increased adoption of hybrid IT and cited a rising network complexity as a result. 49% of respondents say they lack visibility into most of their organization’s apps and infrastructure. 59% of small businesses surveyed indicated that increased technology requirements from multiple departments were the leading cause of increased complexity. Compare that to 40% of their mid-size and 37% of their enterprise counterparts.
And, US Small business confidence dropped in May. The National Federation of Independent Business (NFIB) said that its Small Business Optimism Index dipped 0.1 point last month to 93.1. The share of owners expecting better business conditions over the next six months hit a record low.
Demand for labor remains high.
Why do we care?
I always like a story, so let’s string it together. Broadly, SMBs are worried, and they need labor help. They recognize the need for their IT provider, think they are better off with them, but also are shopping for a new provider – mainly due to cloud costs. Of course, the providers are making more money – and customers would even pay them more if they delivered on their own cost needs.
The costs angle makes sense – if you’re worried about inflation, you’re concerned about costs. I spoke yesterday about inconsistency. Here’s a bit more of it. The safe path is less the optimistic data and more the concerns from customers… which may be overblown in the data. The key takeaway is focusing on the cost versus the value of the delivered solutions.