I wanted to touch on some new data from TechAisle. Quote.
Techaisle data shows that 65% of VARs offer managed services to their customers. Still, only 50%, less than one-third of all VARs, successfully achieve consistent growth and profitability within managed services. The data is similar to 2018. Conversely, 71% of MSPs have succeeded in their managed services business model, and 29% are still striving to achieve profitability and success. Unlike the last several years, MSPs have begun to achieve success in the cloud. 89% of MSPs currently offer cloud, and 72% have achieved cloud success. It is two-thirds of all MSPs, up from less than half in 2018.
This set of numbers aligns with Service Leadership’s numbers I cited on May 4, saying 31% lost money in Q1. 30%. Nearly 1 in three.
Now, let’s acknowledge something. Possible factors for why are differences in business models, marketing strategies, client base, technology stack, skills and expertise, or service offerings. Not all providers are the same. That said, this is a tricky business. Services organizations are less scalable than product ones and generally not as profitable. Remember this when considering the advice of experts and vendors both.