Cloud and IT security continue to reshape the MSP business model

Managed service providers continue to push decisively towards cloud, security services and recurring revenue.

Datto Holding Corp.’s annual State of the MSP Global Report. highlights key trends related to the MSP business model. The Norwalk, Connecticut company, which provides cloud-based security software and offerings that MSPs sell to customers, surveyed more than 1,800 MSPs worldwide.

The survey reveals that 97% of MSPs provide cloud-based infrastructure design and management services, a statistic that demonstrates the rapid rise of the cloud among service providers. By comparison, a survey of TechTarget channel partners in 2016 found that just over half of respondents did not offer cloud services.

SMBs, the core of MSPs, seem to play a pivotal role in influencing service providers’ cloud orientations. According to the Datto study, almost all MSP customers – 99% – use the cloud to some degree, with 50% of customers moving more than half of their workloads to the cloud.

Other studies have highlighted the centrality of cloud computing to channel partner business. Retail companies responding to an Accenture survey in April identified Microsoft, Google Cloud and AWS as their top three partners.

The Datto survey, meanwhile, also shows the importance of cybersecurity to the business model of MSPs. Ninety-nine percent of MSPs said they offer managed security services, a tally that compares to 75% in Datto’s 2020 report. In recent years, some MSPs have been hesitant to start a cybersecurity consulting practice, but attacks on SMBs have lured them into the business.

The Datto report also reflects MSPs’ continued focus on recurring revenue. Sixty-seven percent of respondents’ total revenue comes from recurring services. And, unlike previous years, competition has dethroned sales and marketing as the top MSP challenge. Thirty-four percent of MSPs cite competition as their biggest headache, with revenue growth and profitability ranking second and third, respectively.

ConnectWise Launches Reconciliation and MSP Metrics Offerings

ConnectWise has unveiled a cloud-based billing reconciliation feature and a free version of its BrightGauge business intelligence product.

The Tampa, Fla. company, which provides enterprise automation software to MSPs, discussed offerings and shed light on future developments at its virtual IT Nation Explore event, which runs through August 12.

ConnectWise’s reconciliation feature addresses a time-consuming and error-prone cloud billing process, said Sam Demulling, vice president of product management at ConnectWise. The task involves many manual steps and there isn’t much automation available today, he noted.

Many suppliers and distributors provide spreadsheets with data, such as customer name, product number and quantity, Demulling said. MSPs must reconcile this data with the data they maintain in ConnectWise Manage, a professional services automation product. However, ConnectWise Manage Billing Reconciliation provides automatic vendor invoice reconciliation, mapping vendor data to information maintained in ConnectWise.

ConnectWise Manage Billing Reconciliation will be part of Manage 2021.2, which is expected to arrive in August. “It’s not something you have to buy,” Demulling told attendees, referring to the reconciliation feature. “It will just be part of the finance menu.”

Additionally, MSPs will soon have access to BrightGauge Essentials, which ConnectWise describes as a stripped down version of its BI offering. BrightGauge Essentials provides dashboards and reports with financial and operational metrics, the company said. The product’s pre-selected metrics are intended for “partners who are just starting to use data to help run their business,” said Brooke Candelore, product manager at ConnectWise.

ConnectWise is piloting BrightGauge Essentials with a small group of partners, she said. The offer will be free for partners using ConnectWise Manage and will be available in the coming weeks, according to the company.

Jeff Bishop

Other IT Nation Explore developments include:

  • ConnectWise has entered into a technology partnership with SentinelOne, an autonomous cybersecurity platform provider. The company’s SentinelOne Control and Complete offerings will be available as standalone products within ConnectWise’s security suite.
  • Jeff Bishop, chief product officer at ConnectWise, said the company will begin revealing “pieces” of ConnectWise Fusion, a platform that will underpin the company’s 23 products. He said the company will provide additional details about the platform at its IT Nation Connect event, scheduled for November 10-12.
  • ConnectWise plans to integrate additional backup providers into its ConnectWise Recover Complete BDR product. The offer was launched with the integration of Acronis Cyber ​​Protect. Dave LeClair, senior director of product management at ConnectWise, said he expects Veeam, StorageCraft, Axcient and Storage Guardian to be among the vendors integrated into the BDR offering.

Other news

  • Software provider MSP Kaseya got a ransomware decryptor and started working with its customers. A ransomware attack earlier this month compromised dozens of Kaseya’s service provider customers and up to 1,500 MSP customers. The attack raised questions about vendor liability within the MSP community.
  • Accenture continued its wave of acquisitions by buying Workforce Insight, a Denver-based workforce optimization consultancy. Workforce Insight provides human capital management advisory and technology services. The company partners with UKG, Workforce Software and Workday. Its 300 professionals will join Accenture’s Workforce Management practice. Accenture acquisitions fuel the company’s cloud strategy.
  • Upstack, a web-based platform that sells cloud services through commercial agents, has acquired, a consulting firm that advises midsize businesses on data center and colocation services. New York-based Upstack bought several cloud partners in 2021, following a $50 million private equity investment from Berkshire Partners. Cloud service companies have attracted investor money this year.
  • Pax8, a Denver-based cloud distributor, has signed a pact with Qunifi, giving MSPs access to Call2Teams. The Quunifi product connects enterprise phone systems and SIP trunk providers to Microsoft Teams.
  • Corel, an Ottawa-based software provider, has updated its partner program with partner portal access, sales training, deal registration, and pre-sales, technical, and customer support.
  • Addigy, an Apple device management provider, offers Splashtop as a remote support offering included in Addigy subscriptions. The consolidation agreement allows MSPs to use Splashtop remote access from Addigy to manage Apple devices, according to Addigy.

Executive appointments

  • High Wire Networks Inc. has appointed David Hand as vice president of global systems integrators, a move that aligns with the company’s expansion of its technology services channel to support integrators. He was previously global vice president of GSI at Nortel and an executive at CSC (now DXC Technology).

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