The 2014 Kaseya MSP Pricing Survey revealed a healthy global MSP market, and gave an insight into a number of the business practices that higher-growth MSPs have in common.
The findings, gathered from owners and operators of nearly 700 MSP firms across more than 30 countries, highlighted how the higher-growth MSPs are pricing higher, how cloud migration and security are the top IT problems and the new opportunities for MSPs to seize in 2015.
CBR sat down with Kaseya’s Spencer Young, VP of EMEA Sales, to discuss the findings, surprises and opportunities from the survey’s findings.
CBR: What would you identify as the key findings from the survey? What surprised you?
SY: There were a couple of areas that were surprising. Firstly, the survey respondents identified the top IT problem for their clients in 2015 to be migration to the public cloud and the support of those types of services (18.5%). The survey tells us that just 53% currently offer that type of service – clearly showing a significant business opportunity for MSPs.
The second most critical problem identified by respondents was heightened security risks (16.7%). Although 76% of respondents provide desktop security services, just 28% offer identity and access management security. This highlights another potential business opportunity for MSPs.
CBR: Why are MSPs not reacting quicker to heightened security risks and offering services such as identity management?
SY: The initial focus has always been desktop security services, but the evolving nature of what we use in our daily lives, in terms of mobile devices, creates new risks. Anything connected to the outside world is at risk. The MSP market is having to evolve around that change in how people work, which is why we are only now seeing identity management come to the floor.
CBR: BYOD is a hot topic in the industry. What do you think are the main barriers to BYOD adoption?
SY: BYOD is very much in the early stages of MSPs taking it to market. We know that half of respondents offer mobile management services today , with at least 21% of them planning to offer those services in the next year – but there are no pricing strategies for how MSPs should price MDM, BYOD or both.
Do you charge end-users per device? Do you charge per user? Pricing is a significant issue andf barrier. We certainly recognise this as a growth opportunity for Kaseya, and our plan is to really disrupt this market early in the new year with a new solution offering.
CBR: The survey highlighted a shift from a cost-based pricing startegy to value-based strategy. Why this change?
SY: The market perception of MSP offerings has been one based on cost-savings, a focus on the savings and not having the headache of managing IT. There wasn’t really blind value understanding of what MSPs were actually offering, and the industry has moved and shifted quite quickly from the early days of break fixed models.
It has been a natural evolution, with the shift driven by the fact that customers are now far more knowledgeable about what they should be looking for from an MSP provider. In turn, MSPs have responded to this by gaining a much deeper understanding of what real quantifiable value is and what their services should deliver.
They are much more consultative in the way they engage, and we see this more with the higher growth MSPs – they are the ones that spent time training their sales teams on how to be consultative, and they have bothered to learn more about specific end-users so they can speak their language and understand what the real value is to that particular end-user.
CBR: The size of the MSP firms surveyed has changed in profile. The 2014 survey saw a huge jump in the number of smaller firms participating in the survey – firms with less than 10 employees rose from 4% in 2013 to 36% in 2014. Why this change in profile?
SY: The profile is interesting. It is largely based on the fact that when you see a growing market like this, people want to get involved in it. You are seeing a massively growing number of start-ups in the MSP space, especially in the UK and Europe.
We have also noticed that companies in the 10-25 employee bracket has grown a little bit as well, but it really is the fact that there are more market entrants now than there probably ever has been.
What that is probably going to drive, in next year’s survey I’m sure, is more consolidation in this space – the larger MSPs are undoubtedly going to become more inquisitive of the smaller ones and you will see a rise in acquisitions.
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